OTTAWA - The Harper government took the long-awaited step Wednesday of detailing its plan to trade pollution permits on the open market.
Environment Minister Jim Prentice released two draft documents laying the ground rules for a federal carbon-offset scheme.
The guidelines set out which offset projects qualify for the federal system, how others can apply for inclusion, the value of each offset credit, how emissions cuts are tracked and verified, and other nitty-gritty details of the plan.
"The offset system, like all elements of our climate-change plan, is aimed first and foremost at reducing emissions in Canada," Prentice said.
"And we will be rigorous in ensuring that credits will only be issued for projects that actually reduce the amount of greenhouse-gas emissions in this country."
The government will place a cap on greenhouse gases and allow firms to buy and sell emissions permits within that cap. Participants who don't meet the emissions targets can buy credits from those with a surplus instead of reducing their emissions.
The idea is to gradually lower the ceiling to control emissions. The Conservatives pledged to lower greenhouse gases 20 per cent from 2006 levels by 2020.
To do that, they've proposed a tangle of regulatory measures, a cap-and-trade scheme, investments in green-technology funds and credits for companies that reduced their emissions before 2006.
Prentice told reporters after a luncheon speech in Ottawa that carbon-offset projects must have started after Jan. 1, 2006, to be eligible for inclusion in the federal trading system.
However, only carbon offsets made after Jan. 1, 2011, will count toward the reduction targets that industry will be required to meet.
Certified projects must be able to prove they're actually cutting carbon emissions.
An offset credit is equivalent to one tonne of carbon dioxide. The environment minister said the federal government will not set the price of carbon offsets. Market forces will instead dictate the permits' value.
The federal offset system will "complement" a patchwork of regional carbon markets, Prentice said, and "not supplant or duplicate them."
The regional schemes have popped up in the absence of a continental or national carbon market. The most notable is the Western Climate Initiative, a coalition of four Canadian provinces and seven U.S. states that plans a regional market to trade carbon emissions.
The Ontario and Quebec governments also agreed to forge ahead with an interprovincial carbon-trading system.
"We will harmonize and strike equivalency agreements with the provinces, but what I'm describing to you today is the gold standard of offset credits that will apply in Canada," Prentice said.
The public will have 60 days to comment on the draft offset regulations before the Tories publish final regulations this fall.
NDP critic Linda Duncan criticized the government for its "piecemeal" approach to the environment.
"We need to stop piecemeal, issuing out these little pieces," she said. "We need to see the whole framework."
The offset plan is designed for the domestic market, Prentice said, though it could later be expanded south of the border.
The Conservatives pledged in their 2008 election platform to work with the U.S. and Mexico to develop and implement a continent-wide system between 2012 and 2015.
Environmentalists and opposition parties alike have criticized the Conservatives for dragging their feet on climate-change policies.
The Tories have retooled their plan several times under three successive environment ministers.
