The government of British Columbia is
moving forward in the fight against climate change by introducing the Greenhouse Gas
Reduction (Cap and Trade) Act, Environment Minister
Barry Penner announced today.
“The Cap and Trade Act will make
British Columbia the first Canadian province to introduce legislation authorizing hard caps on
greenhouse gas emissions,” said Penner. “This enabling legislation
provides the framework to
participate in the Western Climate Initiative cap and trade system
currently
under
development.”
In the
spring of 2007, British Columbia joined the Western Climate Initiative (WCI), a
multijurisdictional partnership launched in February 2007 to address climate change.
The partnership, which includes seven U.S. states (California, Oregon, Washington, New
Mexico, Arizona, Utah and Montana) and the province of Manitoba, is working on identifying,
evaluating and putting in place ways to reduce greenhouse gases, including the development of a
cap and trade system by August 2008.
WCI
members now number 63 million people, with a collective gross domestic product
of $2.9 trillion (CAD). It
is anticipated that membership will grow over time with new partners joining
from both the U.S. and
Canada.
Cap and trade
regulatory systems establish an overall cap or limit on emissions, while
the “trade” part of the
system allows regulated emitters to buy and sell emissions allowances or buy
offset units. Those who
can reduce emissions more efficiently are able to sell their surplus units to
those who find it more
challenging to do so. This system transfers emission reduction responsibility
and management to
emitters, while market forces help determine the distribution of
reductions.
Under the act,
the B.C. government will establish the cap for designated large emitters
by issuing a limited
number of tradable compliance units (emissions allowances) for given periods of
time (compliance periods).
Each designated emitter will then be required to obtain a number of
compliance units
equivalent to the amount of regulated greenhouse gas emissions it releases
within the specified compliance period. These units must then be surrendered to the
government as proof of compliance.
A B.C. compliance unit will be equal to one tonne of carbon
dioxide or its equivalent – the same measuring unit in use by existing
systems, and expected to be adopted by the regional cap and trade system the WCI is currently
developing. The act identifies three different kinds of compliance
units:
•
B.C. Allowance Units (issued by the
government according to the cap specified in a given compliance period).
• B.C. Emissions Reduction Units (offset
credits from approved emission reduction or removal projects in B.C.).
•
Recognized Compliance Units from
other cap and trade systems, such as those established by the WCI.
The act also authorizes the creation of a
compliance unit tracking system for the banking, transfer and surrender of compliance
units.
The legislation
will also provide for the use of administrative penalties that will be set
by regulation, and which
will apply as an automatic consequence of non-compliance.
“A cap and trade system is a very
innovative form of regulation,” added Penner. “Rather than government dictating technologies or
emission standards, the system sets an overall cap on emissions
from regulated sources. The cap ensures
that emissions are reduced, but the market determines where those reductions are achieved. This will
help reduce greenhouse gas emissions in a more efficient, cost-effective way.”
Media
contact:
Kate Thompson
Media Relations
250 953-4577
