Putting a price on carbon in the economy so that everyone’s decisions take into account greenhouse gas (GHG) emissions and their impacts is an essential measure for meeting the climate change challenge.
In 2013, Québec set up a cap-and-trade system for greenhouse gas emission allowances (C&T system) to fight climate change. Its primary objective is to encourage businesses and citizens to innovate and change their behaviour in order to reduce GHG emissions.
In 2014, Québec linked its system to California’s as part of the Western Climate Initiative, thereby creating the largest carbon market in North America and the first to be designed and managed by sub-national governments in different countries. This market expanded again with the signing of an agreement with Ontario in September 2017, making the link between the Québec, California and Ontario markets official on January 1, 2018. Despite Ontario’s withdrawal when it repealed its cap-and-trade regulation on July 3, 2018, Québec and California are continuing their excellent collaboration and are committed to maintaining and further developing their regional carbon market.
Québec has chosen to pay all proceeds from carbon market auctions into the Green Fund to finance the implementation of the 2013-2020 Climate Change Action Plan (2013-2020 CCAP). Under the Plan, support is provided to companies, municipalities and private citizens for reducing GHG emissions and adapting to the impacts of climate change, as well as for continuing the transition to a robust, innovative and increasingly lower-carbon economy.
The carbon market is intended for the following companies (the emitters):
Requiring these companies to be subject to the C&T system ensures coverage of approximately 80% of GHGs emitted in Québec.
Since 2019, industrial establishments that declare annual emissions of more than 10,000 t CO2 eq. but less than the reporting threshold of 25,000 t CO2 eq. can voluntarily register to the carbon market to become emitters subject to the C&T system.
The carbon market is also accessible to natural and legal persons who wish to participate (the participants) even if they do not have a regulatory obligation to fulfill (investors, brokers, consultants, etc.).
See the list of emitters and participants registered to the carbon market.
The carbon market is therefore a green fiscal tool that simultaneously allows for reducing GHG emissions and developing an entire strategic sector for the Québec economy (clean technology, energy efficiency, transportation electrification, etc.).
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