Introduction
The Greenhouse Gas Reduction (Cap and Trade) Act was given Royal Assent on May 29, 2008. This Act, which will come into force by regulation of the Lieutenant Governor in Council, will provide the statutory basis for setting up a market-based cap and trade framework to reduce greenhouse gas emissions from large emitters operating in the province.
British Columbia is the first Canadian province to introduce legislation authorizing hard caps on greenhouse gas emissions. The Act will enable B.C. to implement a cap and trade system, but the details of the system will likely be worked out in cooperation with the partners in the Western Climate Initiative (WCI). The WCI is a multi-jurisdictional partnership launched in February 2007 to address climate change.
Cap and trade systems establish an overall cap or limit on emissions, while the “trade” part of the system allows regulated emitters to buy, bank or sell emissions allowances and 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.
This Act along with the ensuing regulations will allow the Ministry to progress toward meeting the government’s commitment to reduce B.C.’s greenhouse gases by at least 33 percent below current levels by 2020.
Regulations
The proposed Reporting Regulation will be the first regulation developed in accordance with authority provided by Greenhouse Gas Reduction (Cap and Trade) Act . The proposed regulation requires facilities and/or entities with emissions in most source categories to submit data on greenhouse gas emissions to the Minister of Environment, which will provide a foundation for the development and implementation of a cap and trade system and other climate policies to reduce greenhouse gases.
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