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For Immediate Release


April 3, 2008

Ministry of Environment




VICTORIA The government of British Columbia is moving forward in the fight against climate change by introducing the Greenhouse Gas Reduction (Cap and Trade) Act, Environment Minister Barry Penner announced today.


            “The Cap and Trade Act will make British Columbia the first Canadian province to introduce legislation authorizing hard caps on greenhouse gas emissions,” said Penner. “This enabling legislation provides the framework to participate in the Western Climate Initiative cap and trade system currently under development.”


In the spring of 2007, British Columbia joined the Western Climate Initiative (WCI), a multi-jurisdictional partnership launched in February 2007 to address climate change. The partnership, which includes seven U.S. states (California, Oregon, Washington, New Mexico, Arizona, Utah and Montana) and the province of Manitoba, is working on identifying, evaluating and putting in place ways to reduce greenhouse gases, including the development of a cap and trade system by August 2008.


WCI members now number 63 million people, with a collective gross domestic product of $2.9 trillion (CAD). It is anticipated that membership will grow over time with new partners joining from both the U.S. and Canada.


Cap and trade regulatory systems establish an overall cap or limit on emissions, while the “trade” part of the system allows regulated emitters to buy and sell emissions allowances or buy offset units. Those who can reduce emissions more efficiently are able to sell their surplus units to those who find it more challenging to do so. This system transfers emission reduction responsibility and management to emitters, while market forces help determine the distribution of reductions.


            Under the act, the B.C. government will establish the cap for designated large emitters by issuing a limited number of tradable compliance units (emissions allowances) for given periods of time (compliance periods). Each designated emitter will then be required to obtain a number of compliance units equivalent to the amount of regulated greenhouse gas emissions it releases within the specified compliance period. These units must then be surrendered to the government as proof of compliance.


A B.C. compliance unit will be equal to one tonne of carbon dioxide or its equivalent – the same measuring unit in use by existing systems, and expected to be adopted by the regional cap and trade system the WCI is currently developing. The act identifies three different kinds of compliance units:


·        B.C. Allowance Units (issued by the government according to the cap specified in a given compliance period).

·        B.C. Emissions Reduction Units (offset credits from approved emission reduction or removal projects in B.C.).

·        Recognized Compliance Units from other cap and trade systems, such as those established by the WCI.


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


The legislation will also provide for the use of administrative penalties that will be set by regulation, and which will apply as an automatic consequence of non-compliance.


            “A cap and trade system is a very innovative form of regulation,” added Penner. “Rather than government dictating technologies or emission standards, the system sets an overall cap on emissions from regulated sources. The cap ensures that emissions are reduced, but the market determines where those reductions are achieved. This will help reduce greenhouse gas emissions in a more efficient, cost-effective way.”


            For more details on the WCI, please visit 






Kate Thompson

Media Relations

250 953-4577


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