Québec Introduces Climate Change Bill

On May 12, 2009, the Québec government introduced Bill 42, which provides a framework for a provincial greenhouse gases ("GHG") cap-and-trade system, the details of which are to be fleshed out at a later time by the government in regulations and orders. Key components of Bill 42 include the establishment of a public registry, GHG reduction targets for regulated sectors using 1990 as the baseline and a cap-and-trade system. Emission units would be obtained either by allocation or auction or through a cap-and-trade system with trading expected to be carried out on the Montreal Climate Exchange. Fees collected from emitters would be paid into a fund for climate change initiatives.

If passed, Bill 42 will enable Québec to meet its commitments in the Western Climate Initiative, a group of seven U.S. states and four Canadian provinces (British Columbia, Manitoba, Ontario and Québec) that have agreed to a common GHG emissions reduction target and are committed to a