Friday, 8 July 2011

Carbon Capture and Storage in Canada and Carbon Trading in Quebec

Here are two interesting stories related to carbon finance. These stories will be particularly interesting to BSUS 6600 students. Environment Canada is in the process of putting together new rules that will affect new coal fired power plants.

"The new rules will prohibit construction of new coal-fired power plants unless they incorporate carbon capture and storage (CCS) technology to remove the greenhouse gases and store them underground."

CCS technology is expensive and not that widely used and this may make it more profitable to keep running the old plants and delay construction of new cleaner plants.Currently, the only CCS plants in operation are in Canada (1), US (2), France (1), Algeria (1) Netherlands (1) and Norway (2) (World Coal Association). Across the world, there are slightly over 30 new CCS plants in the planning stages.

Quebec is taking a more market based approach to carbon dioxide emissions by planning to launch a cap-and-trade system in 2013 (see here).

"The program is designed to reduce Quebec's emissions by 20 per cent of 1990 levels by 2020."

I am interested in learning the details of where and how carbon emissions are going to be traded. This sounds like a regional market for carbon and I wonder if these carbon emissions will be allowed to cross-trade in bigger carbon markets like the EU-ETS.

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