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newsrel -- Air Resources Board Announces Release of Draft Regulations for Cap-and-Trade Linkage with Quebec

Posted: 09 May 2012 17:04:30
Proposed linkage is next step toward November carbon allowance
auction; provides California businesses with additional benefits,
more options. 

Release #:12-18

ARB PIO: (916) 322-2990

Dave Clegern
(916 799-7151

Air Resources Board Announces Release of Draft Regulations for
Cap-and-Trade Linkage with Quebec

Proposed linkage is next step toward November carbon allowance
auction; provides California businesses with additional benefits,
more options

SACRAMENTO - The California Air Resources Board today released
proposed regulations to link its cap-and-trade program to
Quebec’s to form a joint carbon market to reduce greenhouse gas
emissions, drive innovation and help move California toward a
clean energy economy.

The release of the proposed regulations signals the start of a
45-day public comment period. The Air Resources Board will
consider the proposed regulations at its regular meeting on June
28, 2012.

“Linking with Quebec is a significant advance in California’s
efforts to fight climate change and steer our economy toward a
clean energy future,” said ARB Chairman Mary D. Nichols. “Linking
provides more options to California businesses and lays the
groundwork for other partners to join with us. This sends a
strong message to two national governments that now is the time
to support innovation, energy efficiency and the development of
clean technologies.”

“Climate change is a global issue that must be addressed by all
levels of government. By being among the first in North America,
with California, to participate in the carbon market, our
businesses will be in good shape to excel in a carbonless
economy,” said Quebec minister for Sustainable Development,
Environment and Parks, Pierre Arcand.

“The cap-and-trade system is acknowledged as one of the most
efficient and least costly economic tools available to reduce
greenhouse gas emissions and is an important instrument in our
transition to a green and prosperous economy. Quebec is
optimistic that its linking with California will be followed by
many other partners. ” he added.

The proposed linkage is another indication of the wide range of
action taking place in the international arena as an increasingly
large number of other states and nations are taking steps to
fight climate change and reduce greenhouse gases. Starting next
year 34 emissions trading programs will serve as the primary
vehicle to drive greenhouse gas reductions in Norway, Iceland,
Switzerland, Australia, New Zealand and 27 European Union
members, along with California and Quebec.  South Korea’s program
will begin in 2015. Just last month Mexico also passed climate
change legislation.

California’s cap-and-trade program, adopted in October, 2010 was
designed to link with other cap-and-trade programs. Over the past
five years California has been working with several states and
Canadian provinces within the Western Climate Initiative on
approaches to linking their emission trading. AB 32 called for
regional associations.  It is expected that in the future other
partners, notably Ontario and British Columbia may join.

Quebec is the first to be proposed for linkage as its own program
is sufficiently advanced and has equally rigorous reductions and
reporting rules as California. Quebec has roughly one-sixth the
amount of greenhouse gas emissions from industrial and other
sources as does California.

The draft linkage regulations provide guidelines to ensure that
California and Quebec carbon allowances are interchangeable at
auction and can be used for compliance purposes in one another’s
programs. The regulations also provide joint, enforceable
standards for development and use of carbon offsets, as well as a
range of steps to ensure the security of the market.

The proposed linkage regulations establish a sound framework for
further investment in clean energy technology, businesses and
jobs. By expanding the size of the carbon market, linking with
Quebec will provide increased liquidity to the carbon market and
provides businesses in California with additional benefits and
more options. More capital in the market helps expand the
investment framework, providing additional support for businesses
to choose investment in clean technologies, helping transform
California’s economy away from its dependence on fossil fuels and
toward a clean energy future.

The first linked auction between California and Quebec is
scheduled for November 14, 2012.

The proposed regulation can be found at:

ARB's mission is to promote and protect public health, welfare,
and ecological resources through effective reduction of air
pollutants while recognizing and considering effects on the
economy. The ARB oversees all air pollution control efforts in
California to attain and maintain health based air quality

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