California, Quebec plan joint emissions allowance sale

13 Jan 2012 14:27 GMT

Portland, 13 January (Argus) — The Canadian province of Quebec will join California in selling emissions allowances at the first Western Climate Initiative (WCI) allowance auction on 15 August. The remaining members of the WCI held a stakeholder meeting in San Francisco yesterday in which they announced their commitment to the program. Quebec and California are the only partners of the initiative that have approved regulations to participate in the WCI's regional, multi-sector cap-and-trade system, which is due to begin in January 2013. The WCI, a partnership of Canadian provinces British Columbia, Manitoba, Ontario and Quebec and the state of California, aims to reduce greenhouse gas (GHG) emissions to 15pc below 2005 levels by 2020 through a carbon trading scheme. Six US states dropped out of the initiative last year to join an offshoot of the regional climate group that does not have a GHG cap-and-trade program. That group, known as North America 2050, aims to reduce GHG emission through carbon sequestration, sustainable biomass and the development of carbon offset projects. The WCI partners plan to release recommendations for a final offset system this month. Tim Lesiuk, chairman of the WCI's offsets subcommittee, said the initiative aims to come up with a common set of offset protocols that can be adopted across different member jurisdictions. Each member has the choice to adopt all or some of the protocols. “We would like to see four to five offset protocols this year,” Lesiuk said. Quebec plans to adopt offset regulation in spring or summer this year, said Robert Noel de Tilly, senior policy advisor in the climate change office for Quebec's ministry of environment. California has adopted four offset protocols, all based largely on voluntary protocols developed by the non-profit Climate Action Reserve. The state has adopted final offset protocols for US forestry and urban forestry projects and projects that destroy ozone depleting substances and capture and destroy livestock methane. Quebec has not released details of how many allowances it plans to sell at WCI's August auction. The province's cap-and-trade regulation directs its environment minister to make public 60 days before an auction the number and vintage of allowances that it will offer. Jean-Yves Benoit, treasurer economist in the climate change office at Quebec's environment ministry, told Argus the number of allowances the province will auction will not be released until this summer. A potential sticking point to Quebec's participation is the requirement that California submit a rulemaking amendment to the state Air Resources Board that would allow Quebec to link with California's cap-and-trade program. This rulemaking has to take place before Quebec can take part in the auction. Michael Gibbs, deputy secretary for climate change at the Air Resources Board, said it will be a “challenge” to complete this rulemaking in time for the August compliance auction. It is unclear when the other Canadian provinces will have regulations in place to participate in cap-and-trade. Lesiuk of British Columbia said the province is finishing a carbon price analysis of cap-and-trade and did not comment further on when it would be ready to trade allowances. Manitoba still does not have regulations in place to participate in the cap-and-trade program, though it is considering legislation, said Neil Cunningham, director of climate change for Manitoba. Plans to link other regional carbon trading schemes, such as the Regional Greenhouse Gas Initiative, with WCI appear to be off the table. Pat Cummins, WCI's project manager with the Western Governors' Association, said a North America 2050 working group that was working on linking emissions trading programs was not active. He also said the group's offset working group, which is focused on the development and implementation of offsets that can be used in emissions trading programs, is looking at voluntary rather than compliance offsets. Send comments to feedback@argusmedia.com