The Carbon Market And Carbon Regulation: Ensuring Compliance And Capturing Value

Provincial and state governments have begun to regulate the emissions of greenhouse gases ("GHG"). In particular, Québec and California created Cap-and-trade schemes/systems ("Cap‑and-trade") and harmonized their rules. The Ontario government has announced its plans to join them. Alberta, for its part, has announced a carbon tax and the imposition of emission limits. These are signs that carbon value and carbon risk have been acknowledged in North America. There is also a growing interest from an increasing number of businesses to reduce their carbon footprint in efforts to demonstrate they are good corporate citizens.

The Québec government started regulating GHG emissions Jan. 1, 2013 with the entry into force of the Regulation respecting a cap-and-trade system for greenhouse gas emission allowances¹ (the "Regulation"). This new regulation created Cap-and-trade to enforce and encourage reductions in GHG emissions of large emitters, being those enterprises with