Cap and Trade System Could Tackle the Source of 40% of British Columbia's Greenhouse Gas Pollution

March 27, 2008

Today, the Pembina Institute released a new report outlining how a cap and trade system, if designed right, could help reduce the pollution that causes global warming from British Columbia's largest emitters.

"The potential to reduce emissions using a cap and trade system is huge, but only if the system is designed well. That means setting strong caps and auctioning pollution permits," says Matt Horne, Acting Director of British Columbia Energy Solutions at the Pembina Institute. "Large industry and aviation together produce about 40% of British Columbia's greenhouse gas pollution so applying the system to these sectors is essential."

In November 2007, the British Columbia government legislated aggressive targets to reduce greenhouse gas pollution to at least 33% below the 2007 level by 2020, and to 80% below the 2007 level by 2050.

British Columbia, Manitoba and seven U.S. states have partnered through the Western Climate Initiative (WCI) to design a regional cap and trade system that will help meet these targets. Draft recommendations for this system are being released this month and are available for public feedback.

The Pembina Institute's report Cap and Trade: Reducing Pollution, Inspiring Innovation outlines four critical elements that need to be included if the cap and trade system is to adequately support British Columbia's greenhouse gas reduction targets:

  • Set strong caps: the cap should be at least 33% below 2007 pollution levels by 2020.

  • Include the right sectors: at a minimum, the system should be applied to large industry and aviation.

  • Auction off permits: all of the pollution permits should be put up for auction, in keeping with the "polluter pays" principle.

  • Maintain the integrity of the system: a limited use of offsets that are proven to reduce emissions should be allowed; price caps that weaken the system should not be used.

"If designed well, a cap and trade system motivates companies to develop innovative ways to reduce emissions, and using a regional approach helps them to stay competitive," says Horne. "However, if the emissions cap is weak or the trading system contains loopholes, British Columbia would miss a major opportunity to reduce its greenhouse gas pollution."

Cap and Trade: Reducing Pollution, Inspiring Innovation can be downloaded at

- 30 -

For more information:
Matt Horne, Acting Director of British Columbia Energy Solutions
Tel: 604-874-8558 ext. 223 or 778 235-1476


Our perspectives to your inbox.

The Pembina Institute endeavors to maintain your privacy and protect the confidentiality of any personal information that you may give us. We do not sell, share, rent or otherwise disseminate personal information. Read our full privacy policy.