Implication of Québec in the development of a North-American carbon market Ms Michele Fournier Senior Policy Advisor Ministry for Sustainable Development, Environment and Parks, Québec III e World Forum of Regions on climate change, Montevideo, April 22nd, 2010

Outline  Quebec and Climate Change  Who are we?  Major policies to adress climate change  Carbon Levy  Partnerships towards a North Amercian Carbon Market –Regional Initiatives –International Links  Conclusion: What are the prospects for the future ?

Quebec and Climate Change

Who are we?  Québec: one of the 10 canadian provinces  Population: 7,5 millions mostly french speaking (about 80%)  Large Territory (1,6 Mkm 2 ) with low population density (4,6 persons/km 2 )  Cold in winter (-5˚C to -30°C) and temperate in the summer (18˚C to 30˚C)  Legislative powers: energy, natural resources, agriculture, transportation, environment, land use planning, education and health.

GHG emission profile  World leader in renewable energy: 95% hydro and wind.  2008: 82,0 Mt (1% under 1990) 10,6 t CO 2 /capita  GHG emissions decline by 8% from 2004 to 2008  Industry: 13% below 1990 (2008)  Major GHG contributor: Transportation 2007

Major Policies to Address Climate Change Public Transit Mitigation and Adaptation Renewable Energy and Energy Efficiency 2006

2012 Objective : 6% below 1990  16 programs : transportation, energy efficiency, buildings, landfill gases, agriculture, industry, biofuels, cities.  Involves the implication of 14 ministries and organisms  4500 MW of new wind and 4500 MW of new hydro projects for 2015  Energy Efficiency : 3,6 million PET by 2015  Regulation: Speed limitation device for trucks, capture and flaring of biogas, tailpipe standard, new building code 2010, cap & trade 2012  Fiscal measures: hybrid and electrical cars/ liquid natural gas trucks

Carbon Levy  200 M$ per year over 6 years (1,2 MM$ CAN)  Based on the carbon content of fuels.  Rate adjusted annually ($/t CO 2 e)  Approximately 0,008 $ per litre of gas  Application: Refiners, importers, distributors, producers. Natural gas, gas, diesel, propane, fuel oil, coke, coal  Levy deposited in the Green Fund

Partnerships towards a North Amercian Carbon Market  The Climate Registry  Regional Greenhouse Gas Initiative (RGGI)  Western Climate Initiative (WCI)  ICAP

The Climate Registry  Non Profit Collaboration: States, Provinces, Territories and Native Sovereign Nations  Membres: Industries, Public Organizations and NGO’s  Goal: to develop consistent and transparent standards to calculate, verify and publicly report greenhouse gas emissions into a single registry  3 major activities Quantification Protocols Reporting System - Climate Registry Information System (CRIS) Support Mandatory Reporting Info:

Regional Greenhouse Gas Initiative  RGGI: 10 North-eastern and Mid-atlantic States Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York,Vermont, Maryland, Massachusetts and Rhode Island Canadian observers : Québec, Ontario et 4 maritime provinces  Goal: : Cap CO 2 from Electricity Generation Utilitiess (  25 MW) to 1990 level : 2,5 % annual reduction to reach 10 % below 1990 in 2018  Auction: majority of allowances (7 auctions so far)  Revenues: to invest in clean energy, energy efficiency and clean technologies.  Average Price: 2,80$/ t CO 2 éq. (US short tons) ~ 580 M$ US since 2008

Western Climate Initiative PartnersArizona British Columbia CaliforniaManitobaMontana New Mexico OntarioOregonQuébecUtahWashington Four Canadian Provinces 79 % of Canadian Pop. (2008) 73 % of GDP (2007 ) Observers Alaska Colorado Kansas Nevada Wyoming Nova Scotia Saskatchewan Nuevo Leon Coahuila Tamaulipas Chihuahua Sonara Baha California

WCI overview 2020 Regional Goal:2020 Regional Goal: to reduce GHG emissions by 15% below 2005 level –Regional goal = Weighted Average of Individual Partner Goals Comprehensive Approach to Address Climate ChangeComprehensive Approach to Address Climate Change –Cap & Trade Program beginning in 2012 –Complementary Policies 2010: Mandatory reporting – 10,000 tons + ScopeScope: Electricity/Industry , Transportation/Buildings Dialogue approach between PartnersDialogue approach between Partners –Concensus Approach between Partners on all essential C&T linking elements Dialogue approach with StakeholdersDialogue approach with Stakeholders

International Carbon Action Partnership Goal: “to contribute to the establishment of a well-functioning global cap and trade carbon market” Forum to share: Best practices Ensure Compatibility of Designs Make possible future linking of trading programs

Conclusion What are the prospects for the future of regional carbon markets in North American? US and Canada: Uncertainty at the federal level  Uncertainty in the US 3Congress: ACES, CEJAPA, Kerry-Lieberman-Graham, etc. 3EPA / Murkowski 3RGGI / WCI  More certainty in Canada 3Regulation - complete stop 3Harmonisation with the US

Conclusion What are the prospects for the future of regional carbon markets in North American? US and Canada: Uncertainty at the federal level Copenhagen/Cancun: Uncertainty at the international level Québec’s Climate action plan underway Québec: 2020 Goal of 20% below Climate action plan in development 2010 Provincial Budget

Québec 2010 Budget (March 30, 2010) Industrial sector New Policy on the development of Electric vehicles Development of the Electric bus (30 millions $/3 years) Green Aircraft (80 millions $/4 years) Biorefining in the pulp and paper industry (30 millions $/ 3 years) Zero footprint certification (24 millions $/3 years) Data bank on products’ life cycle (1.5 millions $/3 years) Objective: Building a green economy

Quebec and Climate Change Thank you/Gracias Obrigada/Merci! Michele Fournier Senior Policy Advisor Ministry for Sustainable Development, Environment and Parks, Québec