September 17, 2015 by Rahul Rana
CaliforniaCarbon.info, September 17, 2015: David Heurtel, the Quebec Minister of Sustainable Development, Environment, and the Fight against Climate Change, will hold a special consultation with the province’s Committee on Transportation and the Environment on a proposed 2030 emission reduction target of approximately 37.5% below 1990 levels, according to a press release made by the Ministry (MDDELCC) earlier today. The dates for the consultation will be made known shortly.
The Canadian province established its cap-and-trade program on January 1, 2013, and linked markets with California a year later. Together, the two jurisdictions have held four quarterly joint-auctions which have cleared a total of 288,504,507 allowances. In 2013, Quebec’s emissions amounted to 51.9 MMtCO2e, 13% of the collective emissions in the joint program. The province’s current target for 2020 is a 20% reduction from 1990 levels, which makes it more ambitious in the first three compliance periods of the Western Climate Initiative (WCI) market (California targets parity with 1990 levels in 2020). However, with California Governor Jerry Brown having issued an executive order for a 40% reduction from 1990 levels by 2030, it appears likely that their respective positions will be reversed.
CaliforniaCarbon.info’s 2030 WCI carbon market forecast estimates that, at current baseline conditions, meeting a target of 37.5% under the 1990 emissions level through the cap-and-trade program would entail a total supply of approximately 363.75 million Quebec allowances between 2020 and 2030, which would leave Quebec entities short by some 142 million allowances in that same period.
Last week, the California Air Resources Board (ARB) announced that it will hold a public workshop to update the AB32 Scoping Plan, which would now reflect the new 2030 target. CaliforniaCarbon.info’s 2030 WCI carbon market forecast estimates that, at this target and assuming baseline conditions, California’s carbon market would be short by some 562 million allowances in 2030, not including compliance instruments that are carried over.
Quebec’s announcement, coupled with ARB’s decision to start discussion on 2030 targets immediately, is the start of a process that could lead to greater mid-term certainties for participants in their joint market.
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