New government may raise Quebec's carbon target

Reuters News
Posted: Sep 07, 2012 3:40 AM
New government may raise Quebec's carbon target

WASHINGTON, Sept 7 (Reuters Point Carbon) - Quebec's new government would not change the province's plans to launch a carbon market that would link to California's next year, but its new leadership may try to raise its target to cut greenhouse gas emissions to 25 percent below 1990 levels by 2020.

The left-leaning, separatist Parti Quebecois (PQ) last week won 54 out of 125 seats in the Canadian province's legislature, giving it a narrow four-seat edge over the incumbent Liberal party and control of a minority government.

While the PQ's leader Pauline Marois will face a tough battle pushing certain agenda items in the new coalition government, such as reversing tuition hikes, she is unlikely to alter the outgoing party's greenhouse gas plans.

Analysts said, however, the PQ may try to raise the province's 2020 greenhouse gas reduction target to 25 percent below 1990 levels.

Under current legislation, Quebec must cut its greenhouse gas emissions by 20 percent below 1990 levels by 2020 to roughly 51 million tons of carbon dioxide equivalent.

"It's quite certain they (PQ) will raise it (the target) to -25 percent. It's in their electoral platform and they are well committed to do it," said Patrick Bonin, climate and energy director for the Quebec Association for the Fight Against Air Pollution.

The PQ party has also said in its platform that it wants to pursue links to other carbon trading schemes, such as California's and Europe's emissions trading system.

"The PQ has generally been strong on the need to deal with climate change and the expectation is that they'll continue to be supportive of Quebec's participation in the Western Climate Initiative (WCI)," said Matt Horne, a climate change analyst at Canadian think tank the Pembina Institute.

In January, Quebec announced it would launch an emissions trading system to help reduce its greenhouse gas output, which would link to the WCI - a North American carbon market, whose main member is the U.S. state of California.

California's governor has not yet officially approved the link with Quebec, and sources this week said he is unlikely to do so until the middle of next year.

The linkage of Quebec's carbon market to California's larger system or other international partners, such as the EU, would "ensure the takeoff of the Montreal carbon exchange," according to the PQ's party platform.

Montreal launched the Montreal Climate Exchange in 2006 and futures contracts for Canadian carbon but the exchange has been dormant due to the federal government's plans to abandon the creation of a domestic cap-and-trade scheme.

According to the Pembina Institute's Horne, the party would be able to implement some climate policy changes despite its weak hold over the party's divided coalition.

"With the legislation for cap-and-trade already fully in place, any changes would be regulatory in nature so they wouldn't need approval of the legislature," he said.

The addition of Quebec would increase the size of the WCI market by over 20 percent, increasing liquidity and giving California and Quebec businesses more opportunities to reduce emissions.

(Reporting by Valerie Volcovici; Additional reporting by Rory Carroll)