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Quebec, Ontario and California join forces on climate change


September 22, 2017   by Canadian Underwriter


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Quebec Premier Philippe Couillard, Ontario Premier Kathleen Wynne and California Governor Jerry Brown have signed an agreement linking the carbon markets of the two provinces and one state.

Couillard hosted Wynne and Brown in Quebec City on Friday. By signing the agreement to integrate and harmonize emissions cap programs, Ontario will now formally enter the Quebec-California carbon market, effective January 1, 2018, Ontario’s Office of the Premier said in a press release. This will allow all three governments to hold joint auctions of greenhouse gas emission allowances and to harmonize regulations and reporting, “connecting the methods they use to price carbon pollution,” Environment and Climate Change Canada (ECCC) added in a statement on Friday.

The agreement also accelerates progress in the global fight against climate change and demonstrates a shared commitment to achieve the objectives of the Paris Agreement, the release from the provincial government said.

“By linking their respective systems that charge polluters to emit carbon dioxide, Ontario, Quebec, and California stand to reduce their carbon emissions at low cost,” Minister of Environment and Climate Change Canada, Catherine McKenna, said in the statement. “They are demonstrating the advantages of interprovincial and international cooperation in reducing greenhouse gas emissions.”

She added that “providing price incentives to reduce carbon emissions is a proven and effective strategy. It stimulates innovation; it encourages businesses to reduce emissions; and it makes sense for their bottom line. This agreement will help ensure Canadian and American workers and companies participate fully in the emerging clean economy.”

Ontario’s entry into the Western Climate Initiative (WCI) carbon market with Quebec and California will strengthen North America’s largest carbon market, the only one developed and managed by federated entities from two different countries. The WCI covers a population of more than 60 million people and about US$4 trillion in GDP, the Office of the Premier reported.

Together, Ontario, Quebec and California’s collective market is larger than any existing carbon market, except for the European Union. The release added that programs to put a price on carbon are expanding internationally, with several countries, including China, Japan and Mexico indicating their intention to launch carbon markets.

Wynne said that the carbon market-linking agreement will add to the success in reducing greenhouse gas emissions in Ontario, Quebec and California. “We are stronger together, and by linking our three carbon markets, we will achieve even greater reductions at the lowest cost,” she said.

Representatives of the three governments held tri-lateral meetings on the topic last November at the 22nd Conference of the Parties to the United Nations Framework Convention on Climate Change (COP22) in Marrakech, Morocco. Talks focused on how to “support businesses and fuel economic growth within a linked carbon market system,” Ontario’s Ministry of the Environment and Climate Change reported at the time.