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, has 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,” he said.

“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.” Environment Minister Pierre Arcand.

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: href=”http://www.mddep.gouv.qc.ca/”
target=”_blank”>http://www.mddep.gouv.qc.ca/.