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The Cap-and-trade program of the The Cap-and-trade program of the Western Climate InitiativeWestern Climate Initiative
ITU SYMPOSIUM ON ICTs THE ENVIRONMENT AND
CLIMATE CHANGE Montréal
29 May 2012
Robert Noël de TillySenior Policy AdvisorMinistry for Sustainable Development, Environment and Parks Government of QuébecCanada
Presentation OutlookPresentation Outlook
1. 1. Quebec’s Climate Change ActionQuebec’s Climate Change Action
2. 2. The Western Climate Initiative Cap-The Western Climate Initiative Cap-and-Trade programand-Trade program
Evolution of GHG emissions in QuebecEvolution of GHG emissions in Quebec
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Evolution of GHG emissions by sectorsEvolution of GHG emissions by sectors
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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
Green Fund Projects
• Energy efficiency• Energy substitution and recuperation• Solar heating• Wind Farms• Cellulosic ethanol• Biogas• Biofuels• Electric cars• Public transportation
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
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
EMISSION TRADING
• TWO MAJOR COMPONENTS
1. Cap : throuh regulation
2. Market : buyers and sellers exchange allowances
• Kyoto Protocol encourages use of emission trading
The Western Climate Initiative
• MAIN OBJECTIVE
Develop a cap-and-trade program to reduce regional GHG emissions
• PARTNERS
California, British Columbia, Ontario, Manitoba, Québec
Program ScopeProgram Scope• 20122012
–First Auction of allowances in November
• From 2013From 2013– Electricity generation– Industrial sector– ThresholdThreshold: : 25,000 tonnes of CO2eq. per year
• From 2015From 2015– fuel distribution (transportation and buildings)– Threshold ; Threshold ; 25,000 tonnes of CO2eq. per year
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The Western Climate Initiative
Annual caps of GHG emission Annual caps of GHG emission allowancesallowances
• The annual caps will be established by decree, in the fall of 2011, for 2013-2020
• Mitigation goal : 20% below 1990 levels by 2020
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The Western Climate Initiative
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Compliance obligationCompliance obligation
Three compliance periods :– First period : 2013 to 2014– Second period : 2015 to 2017 – Third period : 2018 to 2020
Surrender of a number of allowances that Surrender of a number of allowances that equals total verified emissions reported during equals total verified emissions reported during
a compliance perioda compliance period
The Western Climate Initiative
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Compliance obligationCompliance obligation
• On October 1On October 1stst following the end of each compliance period following the end of each compliance period (2015, 2018, (2015, 2018, 2021)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
Flexibility Mechanisms and Flexibility Mechanisms and Other featuresOther features
• Banking is allowed / Borrowing is not allowedBanking is allowed / Borrowing is not allowed
• Contingency/Strategic ReserveContingency/Strategic Reserve
• Early Reduction Allowances (2008-2011)Early Reduction Allowances (2008-2011)
• Electronic transactions / secured registryElectronic transactions / secured registry
• Holding limits / market monitoring to prevent manipulationHolding limits / market monitoring to prevent manipulation
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The Western Climate Initiative
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Offsets creditsOffsets credits
• Priority sectors for the development of protocolsPriority sectors for the development of protocols– Agriculture– Forestry– Waste management
• Other sectors to be announcedOther sectors to be announced
– Offsets credits programOffsets 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
InformationInformationWCIWCI
www.westernclimateinitiative.orgwww.westernclimateinitiative.org
www.wci-inc.org
MDDEPMDDEPRobert Noël de TillyRobert Noël de Tilly
Ministère du Développement durable, de l’Environnement et des Parcs
Québec, Canada
