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Making Montreal home to Canada’s carbon market is not just about buying and selling carbon credits, says Leon Bitton, vice-president research and development of the Montreal Exchange.
It’s about transforming the shade of the Quebec and Canadian economies from carbon-intensive to green, generating new economic activity and creating new jobs.
“We’re seeing that climate change is a driving force,” said Bitton, the chief promoter of the Montreal Climate Exchange.
But the absence of a regulatory framework, to set limits on the greenhouse gas emissions responsible for climate change, is holding up the process.
Bitton calls Quebec’s Bill 42, adopted in June to set limits by 2012, “very positive news.”
Quebec Environment Minister Line Beauchamp explained Bill 42 was in line with the Western Climate Initiative, a grouping of four provinces and seven U. S. states, in its push to force the federal governments of Canada and the United States to take the agenda set by the Kyoto accord seriously.
But provincial efforts are not enough, Bitton said. A federally sanctioned regulatory framework is needed.
Canada must also co-ordinate efforts with the United States and be part of a global carbon market.
Bitton noted the Montreal Climate Exchange was established last year to trade futures contracts on carbon reductions after Ottawa announced a 2010 timetable for greenhouse gas regulations.
The election last fall delayed the process, Bitton said, but now federal Environment Minister Jim Prentice has proposed a carbon offset system.
The Prentice proposal will establish tradable credits and encourage greenhouse gas reductions in forestry and agriculture, proposing carbon credits for methane capture, the planting of new forests and agricultural soil management.
An international group of economists, including Mc-Gill University’s Christopher Green, would scrap carbon markets in favour of a carbon tax to finance research and development into low-carbon and no-carbon alternatives.
They note that since the 1997 Kyoto accord, globally, greenhouse gas emissions have risen. And Canada, rather than cutting its emissions six per cent below the 1990 level, as agreed at Kyoto, has increased greenhouse gas emissions by about 34 per cent.
Canada’s inaction in reducing greenhouse gases led the National Round Table on the Environment and the Economy, an advisory body to the federal government, to conclude that by 2020, when the Harper government wants greenhouse gas emissions 20 per cent lower than in 2006, the price of a tonne of carbon dioxide will be $100.
McGill’s Green says a carbon market at those prices would be unsustainable.
While declining to comment directly on the round table’s projected carbon prices, and insisting the market will decide, Bitton admitted that Canada’s foot-dragging will push up the carbon price.
But he sees a silver lining to the high carbon price, saying the price will prompt emitters to consider new technology to reduce greenhouse gas emissions.
“It is becoming inevitable,” Bitton said.
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