QUÉBEC, June 2, 2016 /CNW Telbec/ - The Auditor General of Québec, Ms. Guylaine Leclerc, makes public the Report of the Sustainable Development Commissioner (spring 2016). Chapter 4 aims to present the fundamentals of the carbon market in Québec and to provide a better understanding of this market's issues.
Various instruments to fight climate change are available to legislators. These instruments may take the form of carbon pricing, particularly through cap-and-trade systems for greenhouse gas (GHG) emission allowances, which provide incentive to reduce GHG emissions because there is a cost associated with them.
The cap-and-trade system is a complex and not widely known operating instrument. The cap-and-trade system requires emitters to obtain allowances for their annual GHG emissions. This system aims to limit allowances to compel emitters to reduce their emissions or compensate them. The cap-and-trade system involves several steps, and its cycle extends over more than a year. Regulations identify emitters that are required to participate, categories of emission allowances as well as terms for issuing and using these allowances. A number of provisions apply depending on the situation.
Issues related to the carbon market require particular attention. Although control measures are planned, the implementation of a carbon market in Québec raises a certain number of issues.
- Government interventions on the carbon market have an impact on the number of allowances available and, consequently, on their cost and on the desired change in behaviour of emitters and consumers. In addition, implementing a common market with other governments has some advantages, but there is also a risk that reductions in GHG emissions will take place outside Québec. Benefits, like improved air quality, may be lessened if these reductions do not materialize in Québec.
- Carbon market regulations are complex and have been amended several times over the years. This could lead to challenges in enforcing regulations and make voluntary participants reluctant to take part in the market.
- A lack of information on the market, the results arising from its implementation or the use of funds collected could adversely affect its social acceptance. Finally, a lack of coordinated, complementary and comprehensive of oversight and audit work could undermine participants' confidence which is necessary for the market's efficiency.
The Highlights are available at www.vgq.qc.ca. The full report is available only in French.
Lucie Roy, Director
SOURCE Vérificateur Général du Québec
For further information: Lucie Roy, Director, Cabinet, communications et affaires stratégiques, Auditor General of Québec, Tel.: 418 691-5915