The North American Carbon Market
QUÉBEC WILL BE READY TO START ON JANUARY 2012
Montréal, July 6, 2011 – Québec has taken an important step towards establishing a North American carbon market. The Minister of Sustainable Development, Environment and Parks, Pierre Arcand, and the Minister of Economic Development, Innovation and Export Trade, Clément Gignac, today announced publication of a draft regulation on greenhouse gas (GHG) cap-and-trade based on the Western Climate Initiative (WCI) guidelines, for a 60-day public consultation.
“Québec’s leadership, vision and determination show that Federated States can play a fundamental role in fighting climate change. Our greenhouse gas emission reduction objective is one of the most ambitious in North America: reducing emissions by 20% below 1990 levels by 2020,” said Minister Arcand.
“In order to efficiently support the transition to a low-carbon economy, we initiated the first Climate Change Action Plan in 2006, which has been recognized as one of the best in North America. Québec’s environmental and green technologies industries are now blooming. Québec is at the right place at the right time to continue its transition to a green economy by setting up a carbon market. We are now in the process of creating the Québec of the future, for the benefit of today’s and tomorrow’s generations,” the minister concluded.
Once the consultation period has expired, the regulation to be adopted will enable Québec to be ready to set up the carbon market as soon as January 1, 2012. The first year will be transitional and allow emitters and market participants to familiarize themselves with how the system works. They will be able to register as system users, take part in pilot project auctions and exchange (buy and sell) GHG emission allowances through the market. This phase will also enable partners to make any required fine-tuning in order to make a smooth transition to their obligations under the GHG cap-and-trade system that will come into force on January 1, 2013.
In accordance with the operational rules recommended by the WCI, partner states and provinces need first to adopt regulations to implement a GHG cap-and-trade system in their respective jurisdictions. Then, following the signing of recognition agreements, individual WCI partner systems can be linked to create the North American regional carbon market.
Industrial sites that annually emit 25,000 or more tons of equivalent CO2 in greenhouse gas will be subject to the system for capping and reducing their emissions.
“Today, being in charge of the economy also means demonstrating vision to provide our industries with a favourable context in which to carve out a choice place in the markets of tomorrow. By being among the first in North America to participate in the carbon market, our businesses will be in good shape to excel in a carbonless economy. The cap-and-trade system is acknowledged as one of the most efficient and least costly economic tools available to reduce GHG emissions. It will soon become an important instrument in our transition to a green and prosperous economy. For Québec companies that work in the emerging clean technology sector, this system will become synonymous with new business opportunities in a global economy that from now on needs to reconcile wealth creation and sustainable development in order to ensure its long-term survival,” added Minister Gignac.
Some measures are planned to ensure the competitiveness of companies subject to the GHG cap-and-trade system that face foreign competition, such as government assistance in the form of free emission allowances awarded on an annual basis.
The draft regulation on the greenhouse gas cap-and-trade system is available on the Ministère’s web site at: www.mddefp.gouv.qc.ca.
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