Amendments to the Environment Act introduced today, Sept. 29, will allow Nova Scotia to develop a cap and trade program.
“Nova Scotia is a national leader in fighting climate change,” said Environment Minister Iain Rankin. “Working closely with our stakeholders, our program will set and achieve targets for further greenhouse gas reductions while protecting the pocketbooks of Nova Scotians.”
The amendments will enable government to create regulations to:
— set caps, distribute emission allowances and set penalties
— enable trading of emission allowances
— require companies to monitor and report specific information
— set a provincewide greenhouse gas target for 2030
— create a Green Fund to support climate change initiatives and innovations.
To help promote stability in the market for emissions allowances trading, regulations will allow a small number of allowances to be put in a strategic reserve. These allowances will be sold, if requested. Money collected through sale of allowances or fines will be put in the Green Fund.
The amendments require government to report on progress in achieving targets and use of the Green Fund.
The amendments are flexible for potential future changes. While Nova Scotia only plans to allow trading of emission allowances within the province, a provision is included to allow linking with programs in other places in the future if that is determined to be in the province’s best interest.
Under a cap and trade program, the provincial government sets a limit or cap on the total amount of greenhouse gas emissions allowed in the province and then issues greenhouse gas allowances to regulated companies. If a company emits more than its allowance, it can buy allowances from other companies that have emitted less than their respective caps. Over time, the cap is reduced, leaving fewer allowances and creating an incentive for companies to find ways of cutting their emissions.
Next steps include developing greenhouse gas reporting regulations this fall and consulting with stakeholders on them.