Quebec, California to link their cap-and-trade carbon programs

MONTREAL - Quebec remains confident that it and California will link their cap-and-trade carbon programs despite a delayed vote on the issue, sustainable development minister Pierre Arcand said.

?Quebec and the State of California are intensifying their collaboration to have a common first auction in early 2013,? Arcand said Friday.

Earlier in the week, California regulators delayed a vote on rules that would link the state?s cap-and-trade program with Quebec?s and allow companies to trade carbon permits across borders.

The California Air Resources Board put off the vote to request approval from the governor to comply with a new law that requires him to review and accept such an agreement.

Should the programs join, companies could use carbon permits issued as part of Quebec?s cap-and-trade program to comply with California?s greenhouse-gas regulations.

The California board intends to demonstrate that Quebec regulations are at least as strict as those of the state, Arcand said.

California Governor Jerry Brown will have 45 days to submit findings on the proposal to link programs with Quebec.

The air board?s staff has recommended linking programs with Quebec to strengthen the market for carbon permits and drive down emissions by larger volumes.

?I can well understand the challenges facing California lawmakers, and I am confident that the Governor?s report will show that the two regulations have similar requirements,? Arcand said.

?In the meantime, we are actively pursuing our commitment to the implementation of the carbon market through our cooperation with the State of California and other partners in the Western Climate Initiative.?

Regulators in both Quebec and California will issue carbon permits, each allowing for the release of one metric tonne, through a combination of free allocations and auctions. Companies must turn in carbon permits beginning next year to cover their emissions, and those under the shrinking cap can sell or trade their permits.

California is scheduled to hold its first auction of permits on Nov. 14.

Quebec, along with California, which established a carbon program after U.S. legislators declined to develop a federal one, will join more than 30 governments operating emissions-trading programs worldwide next year in 27 European Union member states, Switzerland and New Zealand.

At least eight other jurisdictions, including Mexico and Indonesia, are considering programs.

In Quebec, the program is a major component in the province?s bid to reduce greenhouse gas emissions to 20 per cent below 1990 levels by 2020.

With file from Bloomberg.

lmoore@montrealgazette.com

Twitter: @MooreOnBiz

? Copyright (c) The Montreal Gazette

Source: http://feeds.canada.com/~r/canwest/F6939/~3/PL3tJOAIJiA/story.html

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