The Canadian provincial government of Ontario and Quebec have signed an agreement with the Mexican government to jointly promote the expansion of carbon market instruments for greenhouse gas emissions reduction in North America.
Ontario and Quebec will thus allow their companies to purchase Mexican greenhouse-gas-reduction credits to meet GHG emissions cap. The joint initiative aims at building on the existence of cap-and-trade programmes for GHG emissions established by Québec and Ontario through the Western Climate Initiative (WCI); Mexico might join the WCI later.
Mexico has a pilot cap-and-trade scheme including 60 companies and that should be expanded to a national cap-and-trade plan by 2018. In addition, Mexico has already signed an agreement with California (United States) on the same basis as this new agreement.
Québec launched its carbon market in 2013 before linking it to California’s in 2014. Ontario committed to linking its cap and trade program with Québec’s in April 2015. Manitoba announced a new cap and trade program and signed a new memorandum of understanding (MoU) to link it to the WCI in December 2015. Other Canadian provinces have opted for carbon taxes to reduce GHG emissions, such as British Columbia or Alberta. The floor price for WCI credits will be about $20 a tonne in 2020, when the carbon tax in British Columbia and Alberta will be at $30.
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