III e World Forum of Regions on climate change, Montevideo, April 22nd, 2010

1. Implication of Québec in the development of a North-American carbon market IIIe World Forum of Regions on climate change, Montevideo, April 22nd, 2010 Ms Michele Fournier Senior Policy Advisor Ministry for Sustainable Development, Environment and Parks, Québec

2. Outline • Quebec and Climate Change • Who are we? • Major policies to adress climate change • Carbon Levy • Partnerships towards a North Amercian Carbon Market • Regional Initiatives • International Links • Conclusion: What are the prospects for the future ?

3. Quebec and Climate Change

4. Who are we? • Québec: one of the 10 canadian provinces • Population: 7,5 millions mostly french speaking (about 80%) • Large Territory (1,6 Mkm2) with low population density (4,6 persons/km2) • Cold in winter (-5˚C to -30°C) and temperate in the summer (18˚C to 30˚C) • Legislative powers: energy, natural resources, agriculture, transportation, environment, land use planning, education and health.

5. GHG emission profile • World leader in renewable energy: 95% hydro and wind. • 2008: 82,0 Mt (1% under 1990) 10,6 t CO2/capita • GHG emissions decline by 8% from 2004 to 2008 • Industry: 13% below 1990 (2008) • Major GHG contributor: Transportation 2007

6. Major Policies to Address Climate Change Mitigation and Adaptation Renewable Energy and Energy Efficiency Public Transit 2006

7. 2012 Objective : 6% below 1990 • 16programs : transportation, energy efficiency, buildings, landfill gases, agriculture, industry, biofuels, cities. • Involves the implication of 14 ministries and organisms • 4500 MWof new wind and 4500 MWof new hydro projects for 2015 • Energy Efficiency : 3,6 million PET by 2015 • Regulation: Speed limitation device for trucks, capture and flaring of biogas, tailpipe standard, new building code 2010, cap & trade 2012 • Fiscal measures: hybrid and electrical cars/ liquid natural gas trucks

8. Carbon Levy • 200 M$ per year over 6 years (1,2 MM$ CAN) • Based on the carbon content of fuels. • Rate adjusted annually ($/t CO2e) • Approximately 0,008 $ per litre of gas • Application: • Refiners, importers, distributors, producers. • Natural gas, gas, diesel, propane, fuel oil, coke, coal • Levy deposited in the Green Fund

9. Partnerships towards a North Amercian Carbon Market • The Climate Registry • Regional Greenhouse Gas Initiative (RGGI) • Western Climate Initiative (WCI) • ICAP

10. The Climate Registry • Non Profit Collaboration: States, Provinces, Territories and Native Sovereign Nations • Membres: Industries, Public Organizations and NGO’s • Goal:to develop consistent and transparent standards to calculate, verify and publicly report greenhouse gas emissions into a single registry • 3 major activities • Quantification Protocols • Reporting System - Climate Registry Information System (CRIS) • Support Mandatory Reporting Info: www.theclimateregistry.org

11. Regional Greenhouse Gas Initiativewww.rggi.org • RGGI: 10 North-eastern and Mid-atlantic States • Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York,Vermont, Maryland, Massachusetts and Rhode Island • Canadian observers : Québec, Ontario et 4 maritime provinces • Goal: • 2009-2014: Cap CO2 from Electricity Generation Utilitiess ( 25 MW) to 1990 level • 2015-2018: 2,5 % annual reduction to reach 10 % below 1990 in 2018 • Auction: majority of allowances (7 auctions so far) • Revenues: to invest in clean energy, energy efficiency and clean technologies. • Average Price: 2,80$/ t CO2 éq. (US short tons) ~ 580 M$ US since 2008

12. Western Climate Initiative Four Canadian Provinces 79 % of Canadian Pop. (2008) 73 % of GDP (2007) Partners Arizona British Columbia California Manitoba Montana New Mexico Ontario Oregon Québec Utah Washington Observers Alaska Colorado Kansas Nevada Wyoming Nova Scotia Saskatchewan Nuevo Leon Coahuila Tamaulipas Chihuahua Sonara Baha California

13. WCI overview • 2020 Regional Goal: to reduce GHG emissions by 15% below 2005 level • Regional goal = Weighted Average of Individual Partner Goals • Comprehensive Approach to Address Climate Change • Cap & Trade Program beginning in 2012 • Complementary Policies • 2010: Mandatory reporting – 10,000 tons + • Scope: Electricity/Industry - 2012, Transportation/Buildings -2015 • Dialogue approach between Partners • Concensus Approach between Partners on all essential C&T linking elements • Dialogue approach with Stakeholders

14. International Carbon Action Partnership Goal: “to contribute to the establishment of a well-functioning global cap and trade carbon market” Forum to share: • Best practices • Ensure Compatibility of Designs • Make possible future linking of trading programs

15. Conclusion What are the prospects for the future of regional carbon markets in North American? US and Canada: Uncertainty at the federal level • Uncertainty in the US • Congress: ACES, CEJAPA, Kerry-Lieberman-Graham, etc. • EPA / Murkowski • RGGI / WCI • More certainty in Canada • Regulation - complete stop • Harmonisation with the US

16. Conclusion What are the prospects for the future of regional carbon markets in North American? US and Canada: Uncertainty at the federal level Copenhagen/Cancun: Uncertainty at the international level 2006-2012 Québec’s Climate action plan underway Québec: 2020 Goal of 20% below 1990 2020Climate action plan in development 2010 Provincial Budget

17. Québec 2010 Budget(March 30, 2010) Objective: Building a green economy Industrial sector • New Policy on the development of Electric vehicles • Development of the Electric bus (30 millions $/3 years) • Green Aircraft (80 millions $/4 years) • Biorefining in the pulp and paper industry (30 millions $/ 3 years) • Zero footprint certification (24 millions $/3 years) • Data bank on products’ life cycle (1.5 millions $/3 years)

18. Quebec and Climate Change Thank you/Gracias Obrigada/Merci! Michele Fournier Senior Policy Advisor Ministry for Sustainable Development, Environment and Parks, Québec Michele.fournier@mddep.gouv.qc.ca