Quebec sets targets for greenhouse gas emissions reductions

Amidst growing concerns about the effectiveness and public acceptability of cap-and-trade systems for reducing emissions of greenhouse gases (GHG), the government of the Canadian province of Quebec has moved forward with a climate change action plan that includes such a GHG emissions credit trading system. The new plan sets a goal of reducing GHG emissions in the province by 20% below 1990 levels by the year 2020. Under the plan, the Quebec government will establish an overall GHG emissions limit, issue free emissions credits to about 100 large industrial emitters, and auction off additional credits until the limit is reached. These credits and their derivatives would be traded on the Montreal Carbon Exchange. Quebec's decision to use a cap-and-trade system comes as prices on the European Union Emissions Trading Scheme (ETS) have fallen to their lowest level since the recession-the equivalent of less than $18 U.S. per credit-and as allowance prices in the U.S. Northeast's Regional Greenhouse Gas Initiative (RGGI) fell to $1.89 in RGGI's most recent auction in June.

Source: Climate Change Business Journal