Possible Criteria for the Creation of Emissions Reductions Credits Under a Domestic Emissions Trading Credit Program

RELEASED
1999

This is one of a series of papers prepared for the NRTEE that examines design issues common to a variety of potential domestic greenhouse gas emissions trading systems. While emissions trading is widely acknowledged as having tremendous potential to improve the cost effectiveness of actions to reduce greenhouse gas emissions, it is likely that it will only be part of the portfolio of policies governments will ultimately need to adopt to meet climate protection commitments. Other policies are likely necessary to ensure environmental effectiveness, economic efficiency, equity and political feasibility.

This paper examines several different types of policies that could complement the introduction of a domestic greenhouse gas emissions trading system in Canada. It provides a rationale for the use of these types of policies that could be implemented to meet the objectives. While the paper does not make recommendations with regard to which specific policies should be implemented to support a domestic emissions trading system, it does clearly make the case that such policies will be required if a domestic emissions trading program is to be successfully implemented in Canada.