Climate change policy: cap-and-trade, part 1
Self-tutoring about Canadian policy towards managing climate change: the tutor mentions cap-and-trade.
The following is according to my understanding.
The cap-and-trade system for CO2 emissions allows a certain rate of CO2 emission per unit of activity as acceptable – that is, free of extra cost. Below that rate, the company gets a credit; above it, the company incurs a fee. Either depends on the difference between the acceptable rate and actual, multiplied by the price of carbon dioxide emission per tonne (95 cdn in 2025). If it’s a credit, the company can sell it to a company that has incurred a fee. If, on the other hand, the company has incurred a fee, it needs to purchase credits equal in value to its fee – in the simplest system. The actual system in place may have other governance policies besides.
Companies can also earn credits by recapturing CO2 from the atmosphere in approved projects. Such companies can then sell their credits to companies that need to buy them to settle fees.
As of now, it seems only Quebec has a cap-and-trade system regarding industrial carbon emissions.
Source:
Jack of Oracle Tutoring by Jack and Diane, Campbell River, BC.
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