B.C. Unveils Cap-And-Trade Legislation

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The government of British Columbia recently introduced the Greenhouse Gas Reduction – Cap-and-Trade – Act to provide the framework for participation in the Western Climate Initiative (WCI) cap-and-trade system.

‘The Cap-and-Trade Act will make British Columbia the first Canadian province to introduce legislation authorizing hard caps on greenhouse gas emissions,’ says Environment Minister Barry Penner.

British Columbia is a member of WCI, a multi-jurisdictional partnership launched in February 2007 to address climate change. The partnership, which also includes California, Oregon, Washington, New Mexico, Arizona, Utah, Montana and Manitoba, is working on identifying, evaluating and establishing ways to reduce greenhouse gases, including the development of a cap-and-trade system by August 2008.


Under the act, the British Columbia government will establish the cap for designated large emitters by issuing a limited number of tradable compliance units for given periods of time. Each designated emitter will be required to obtain compliance units equivalent to the amount of regulated greenhouse gas emissions it releases within the specified compliance period.

Compliance units issued by the British Columbia government will be equal to one ton of carbon dioxide or its equivalent.

The act identifies three different kinds of compliance units:
– allowance units that will be issued by the government according to the cap specified in a given compliance period,
– emissions reduction units that offset credits from approved emission reduction or removal projects in British Columbia, and
– recognized compliance units from other cap-and-trade systems.

The act also authorizes the creation of a compliance unit tracking system for the banking, transfer and surrender of compliance units.

In related news, recent amendments to British Columbia's Utilities Commission Act will help the province achieve the goals of the BC Energy Plan, according to Minister of Energy, Mines and Petroleum Resources Richard Neufeld. The amendments align the act with the BC Energy Plan objectives and will encourage public utilities to:
– reduce greenhouse gas emissions,
– pursue energy conservation and efficiency,
– produce and obtain electricity from clean or renewable resources,
– develop energy transmission infrastructure and capacity to meet customer needs, and
– leverage innovative energy technologies.

These objectives will be considered by the British Columbia Utilities Commission (BCUC) when it makes decisions about utility plans, projects and supply contracts, according to Neufeld's office.

The amendments include new provisions for:
– electricity self sufficiency,
– generation of electricity from clean and renewable resources,
– installation of smart meters,
– BC Hydro's standing offer for clean electricity projects of 10 MW or less, and
– a new process for the BCUC to ensure that the province's electricity transmission system remains consistent with North American reliability standards.

Additional amendments create a new process for province-wide transmission planning and development to support economic growth and future electricity needs.

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