Cap and Trade System Could Tackle the Source of 40% of BC's GHG Pollution
“The potential to reduce emissions using a cap and trade system is huge, but only if the system is designed well. That means setting strong caps and auctioning pollution permits,” says Matt Horne, Acting Director of British Columbia Energy Solutions at the Pembina Institute. “Large industry and aviation together produce about 40% of British Columbia’s greenhouse gas pollution so applying the system to these sectors is essential.”
In November 2007, the British Columbia government legislated aggressive targets to reduce greenhouse gas pollution to at least 33% below the 2007 level by 2020, and to 80% below the 2007 level by 2050.
British Columbia, Manitoba and seven U.S. states have partnered through the Western Climate Initiative (WCI) to design a regional cap and trade system that will help meet these targets. Draft recommendations for this system are being released this month and are available for public feedback.
The Pembina Institute’s report Cap and Trade: Reducing Pollution, Inspiring Innovation outlines four critical elements that need to be included if the cap and trade system is to adequately support British Columbia’s greenhouse gas reduction targets:
- Set strong caps: the cap should be at least 33% below 2007 pollution levels by 2020.
- Include the right sectors: at a minimum, the system should be applied to large industry and aviation.
- Auction off permits: all of the pollution permits should be put up for auction, in keeping with the “polluter pays” principle.
- Maintain the integrity of the system: a limited use of offsets that are proven to reduce emissions should be allowed; price caps that weaken the system should not be used.