Ontario intends to link its cap-and-trade system with the joint California-Quebec market upon launch in 2016 or early 2017, according to Quebec Environment Minister David Heurtel.
The process should take less time than the four-year talks that led to the eventual tie-up of the Quebec and California markets last year, Heurtel told Carbon Pulse in an interview ahead of the Navigating the American Carbon World Conference in Los Angeles on Tuesday.
“Our understanding from Ontario is that they will join the current joint Quebec-California market, they will come in and be the third state to be part of the WCI-managed carbon market. That’s the intent,” he said.
“There are already technical committees set up between the three to work on how Ontario will enter the CO2 market. Hopefully we’ll be able to see results by some time in 2016 or early in 2017.”
Earlier this month, Ontario launched a six-month consultation process seeking views on how it will design the cap-and-trade system. It aims to publish its market design in October.
It was not initially clear whether Canada’s most populous province would first develop a stand-alone market.
Ontario emits 166 million tonnes of CO2 equivalent per year in total, meaning its maximum coverage would only represent around a quarter of the conjoined three-state market.
Installations emitting almost 400 million tonnes a year in California are currently regulated by the WCI-run market compared to around 65 million tonnes in Quebec.
Heurtel predicted the linking could be faster than the four years it took for California and Quebec’s markets to join fully last year.
He said this was because all sides would learn from that initial link and because Ontario was also already familiar with the requirements of that process due to its membership of the WCI since it began in 2006.
“We (Quebec) are looking at this very favourably. What it does is broaden the market to apply over 60 million people from two different countries, providing a very strong signal,” Heurtel added.
By Ben Garside – firstname.lastname@example.org