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January 1, 2013 is a historic day for Quebec – the day we launched our cap-and-trade system.
Quebec is, with California, one of the first two jurisdictions in North America to bring in a cap-and-trade system under the Western Climate Initiative (WCI). The goal: to reduce emissions for certain "big polluters" by 20% by 2020.
As the name suggests, cap-and-trade means putting a cap on the amount of pollution that companies can create. What kinds of companies?
- pulp and paper mills
- refineries
- aluminum smelters
These companies have a choice. They can:
- find ways to reduce their emissions, e.g., a pulp and paper mill could replace heavy fuel with wood-waste biomass
- buy reduction credits on the carbon market
If a company reduces its emissions, it may have credits to spare, in which case, it can sell them on the carbon market.
You can see how this might impact profitability. As an investor, would you rather invest in a clean company that sells credits, or a more polluting comany that must buy credits?
Admittedly, the system isn't perfect. But we support it because:
- It will help Quebec achieve its reduction targets for 2020.
- The sale of credits will generate at least $2.7 billion by 2020. This amount will go towards other efforts to reduce greenhouse gas emissions in Quebec (for example, to fund public transit, energy efficiency programs, or purchase or lease rebates for electric or hybrid vehicles).
- There will be economic benefits for companies that can provide innovative technologies to help companies reduce their emissions.
Bravo, Quebec!
