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The Cap-and-trade program of the Western Climate Initiative

The Cap-and-trade program of the Western Climate Initiative. ITU SYMPOSIUM ON ICTs THE ENVIRONMENT AND CLIMATE CHANGE Montréal 29 May 2012. Robert Noël de Tilly Senior Policy Advisor Ministry for Sustainable Development, Environment and Parks Government of Québec Canada.

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The Cap-and-trade program of the Western Climate Initiative

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  1. The Cap-and-trade program of the Western Climate Initiative ITU SYMPOSIUM ON ICTs THE ENVIRONMENT AND CLIMATE CHANGE Montréal 29 May 2012 Robert Noël de Tilly Senior Policy Advisor Ministry for Sustainable Development, Environment and Parks Government of Québec Canada

  2. Presentation Outlook 1. Quebec’s Climate Change Action2. The Western Climate Initiative Cap- and-Trade program

  3. Evolution of GHG emissions in Quebec 3

  4. Evolution of GHG emissions by sectors 4

  5. Quebec Climate Action • Climate Change Action Plan 2006-2012 • Green Fund • Carbon Levy • Total Investment of 975 M$ in 5 years • 2 000 green projects • 500 more under analysis • Climate change Action Plan 2013-2020 in preparation

  6. Green Fund Projects • Energy efficiency • Energy substitution and recuperation • Solar heating • Wind Farms • Cellulosic ethanol • Biogas • Biofuels • Electric cars • Public transportation

  7. Green Projects in Québec • Example of energy substitution project In five years, 19 % reduction in GHG emissions from College and University buildings • Wind farms in operation : - 2000 : 1 farm and 100 MW - 2011 : 11 farms and 1000 MW - 2015 : 30 farms + and 4000 MW

  8. John H. Dales • Economist at University of Toronto • Initiator of « Emissions trading » concept • Author of : Pollution, Property and Prices University of Toronto Press 1968 • Concept applied to Acid rain and Climate Change Programs

  9. EMISSION TRADING • TWO MAJOR COMPONENTS 1. Cap : throuh regulation 2. Market : buyers and sellers exchange allowances • Kyoto Protocol encourages use of emission trading

  10. The Western Climate Initiative • MAIN OBJECTIVE Develop a cap-and-trade program to reduce regional GHG emissions • PARTNERS California, British Columbia, Ontario, Manitoba, Québec

  11. Program Scope The Western Climate Initiative • 2012 • First Auction of allowances in November • From 2013 • Electricity generation • Industrial sector • Threshold: 25,000 tonnes of CO2eq. per year • From 2015 • fuel distribution (transportation and buildings) • Threshold ; 25,000 tonnes of CO2eq. per year 11

  12. Annual caps of GHG emission allowances The annual caps will be established by decree, in the fall of 2011, for 2013-2020 Mitigation goal : 20% below 1990 levels by 2020 The Western Climate Initiative 12

  13. Compliance obligation Three compliance periods : First period : 2013 to 2014 Second period : 2015 to 2017 Third period : 2018 to 2020 The Western Climate Initiative Surrender of a number of allowances that equals total verified emissions reported during a compliance period 13 13

  14. Compliance obligation On October 1st following the end of each compliance period (2015, 2018, 2021) the compliance account must contain a number of allowances that equals the total amount of GHG emissions reported and verified during the compliance period the use of offsets credits is limited to 8 % of compliance obligation penalty of 3 to 1 and financial penalty for non-compliance The Western Climate Initiative 14 14

  15. Flexibility Mechanisms and Other features Banking is allowed / Borrowing is not allowed Contingency/Strategic Reserve Early Reduction Allowances (2008-2011) Electronic transactions / secured registry Holding limits / market monitoring to prevent manipulation The Western Climate Initiative 15

  16. Offsets credits Priority sectors for the development of protocols Agriculture Forestry Waste management Other sectors to be announced Offsets credits program Use : limited to 8 % of the compliance obligation GHG Reductions or sequestration from sectors or activities not covered by the program Within WCI, Canada, United States, Mexico Other countries - to be determined The Western Climate Initiative 16 16

  17. Information WCI www.westernclimateinitiative.org www.wci-inc.org MDDEP Robert Noël de Tilly Ministère du Développement durable, de l’Environnement et des Parcs Québec, Canada robert.noeldetilly@mddep.gouv.qc.ca

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