On May 12, 2009, Québec's Minister of Sustainable Development, Environment and Parks introduced a bill (Bill 42) to amend Quebec's Environmental Quality Act and Other Legislative Provisions in Relation to Climate Change to Québec's National Assembly. Bill 42 aims at reducing greenhouse gas (GHG) emissions. Bill 42 proposes a cap-and-trade system which distances itself from the currently proposed Federal system and which is more in line with what the new Obama administration has suggested may be adopted in the United States.
When adopted, Bill 42 will establish:
- the reporting of GHG emissions by certain categories of emitters determined by regulation, so that an inventory of GHG emissions may be taken and updated;
- the ability of the Québec Government to set by order GHG reduction targets using 1990 GHG emissions as the baseline. It is currently expected that reduction targets will be phased in from 2012 to 2015 for certain electricity-producing companies and other major industries that emit more than 25,000 tonnes of GHG a year, and after 2015 for other emitters;
- requirements for certain categories of emitters determined by regulation to cover their GHG emissions with an equivalent number of emission allowances, including emissions units, offset credits, early reduction credits and other specified emission allowances;
- a cap-and-trade system to assist emitters to achieve the GHG reduction targets and to mitigate the cost of reducing or limiting GHG emissions. It is expected that the cap-and-trade system will allow persons and municipalities to trade emission allowances;
- the ability of Québec's Minister of Sustainable Development, Environment and Parks to enter into agreements with foreign governments, international organizations and agencies for the harmonization and integration of cap-and-trade systems;
- that all funds collected by the Government under the legislation will be used to finance GHG reduction, limitation or avoidance measures, the mitigation of the economic and social impact of emission reduction efforts, public awareness campaigns and adaptation to global warming and climate change, or to finance the development of and Québec's participation in related regional and international partnerships.
It is currently expected that Bill 42 will be adopted by the end of June and that the first set of regulations under the legislation will be implemented in Fall 2009. It is also expected that emission credits will be traded on the Montreal Climate Exchange (MCex) that was launched last year.