Minister of the Environment Jim Prentice speaks with the media after giving a speech about establishing a carbon market to the Economic Club of Canada in Ottawa on Wednesday. (Sean Kilpatrick/Canadian Press)The federal government has issued rules for claiming greenhouse gas reductions or "offsets" that will form the basis for a national carbon market.
Environment Minister Jim Prentice unveiled two key draft documents Wednesday related to the offset system at a speech before the Economic Club of Canada in Ottawa.
The documents set out the rules and requirements for generating offset credits that represent emissions reductions and guidelines for checks to ensure those reductions are real and quantifiable.
They provide important details and certainty about the carbon trading system that the government had proposed earlier as part of its climate change plan, Prentice said.
"Canadians can begin to plan for the future, to proceed with confidence, to proceed with a clear understanding of the rules of the road."
Under the government's climate change plan, rules will limit emissions of greenhouse gases such as carbon dioxide. However, emitters will be able exceed the limits if they purchase offset credits to compensate for their excess emissions.
The federal government's greenhouse gas reduction target is a 20 per cent reduction from 2006 emissions by 2020 and a 60 to 70 per cent reduction by 2050.
Market to set carbon price
The offset system is intended to generate real emission reductions, Prentice said.
"It does so by establishing a price for carbon in Canada вЂ" something that has never before been done in this country," he said. In theory, this would make it profitable to generate offsets.
However, the actual price will be set by those who buy and sell the offset credits in the marketplace, Prentice said.
The new rules describe how projects can qualify to earn offset credits, each representing greenhouse gases equivalent to one tonne of carbon dioxide. Some project examples provided by the government include wind power and the collection and burning of methane from landfills to produce electricity. The verification process is based on international standards.
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