Cap and trade is in the new kid in town as far as carbon pricing goes in Canada. In April, just before the Premiers' Climate Summit, Ontario made headlines by announcing it will join Quebec’s cap and trade system, which is linked to cap and trade in California.
So just how does it work? Here's our short primer.
The system was first adopted by Quebec in 2013 (although it’s worth noting the province did impose a tax on gas and diesel fuel back in 2007).
“The benefits of emissions trading, beyond ensuring the climate goal is reached in a measurable manner, is that business has flexible compliance options and ‘carrots’ — incentives for making smart, economic business decisions,” Katie Sullivan, director for North America and Climate Finance at the International Emissions Trading Association, said.
Like Alberta’s carbon levy, Quebec’s system puts a price on emissions above a certain level.