The Canadian province of Quebec has recently established a carbon market, and linked it to California’s market, in the hopes of inspiring more regional North American initiatives.
David Heurtel is the Minister of Sustainable Development, Environment and the Fight against Climate Change for Quebec. He is a Liberal member of National Assembly of Quebec for the district of Viau, and an ardent supporter of the region’s carbon market, established in 2013.
Heurtel was interviewed by EURACTIV France’s Editor-in-Chief, Aline Robert.
The world had an image of Canada as the country that slammed the door on the Kyoto Protocol, and now Ban Ki-moon is praising Quebec’s action on the climate. What has happened in the meantime?
What the federal government is doing is very different to what is going on at provincial level. In Canada, the provinces hold most of the power on the issues affecting climate change: transport and energy are provincial competencies; the environment is a shared competency. The big difference is that the provinces are really interested in taking action, so they are driving the development of carbon pricing.
You established a carbon market recently.
Yes, Quebec established its own carbon market in 2013, and linked it to California’s market in 2014. It covers 85% of greenhouse gas emissions and works very well.
We have already held nine carbon credit auctions, which have raised $1 billion. In the last auction, we sold all our credits for a price of $17 per tonne. There is high demand!
Which sectors does it cover?
It covers all sectors on emissions above 25,000 tonnes of CO2 per year, regardless of the activity. We have exactly the same regulatory structure as California.
Do you already see this experiment as a success?
In 2013, the tonnage price was around $10. One of the basic requirements of the carbon market is that prices have to rise. Without this, the objective will never be achieved and the private sector will not put clean technologies in place.
Our objective for 2020 is to raise $3 billion. This money is to be entirely reinvested in Quebec’s Green Climate Fund, which is dedicated above all to the electrification of transport, energy efficiency and renewable energies.
Is the carbon market an effective solution?
I think it is. To start with, the market really does help bring down emissions. We have committed to cutting our emissions by 37.5% between 1990 and 2030, and this is an efficient way of doing so. It is also a driver of clean investment. We are creating a whole new clean technology sector with the money raised. We have a base-line price of $16 and a price ceiling of $60.
Are the people of Quebec involved in the fight against climate change?
It was thanks to the people that Quebec moved so quickly to establish its carbon market. The Quebecois population is very much engaged in the fight against climate change, even if it comes at a cost. The amount we invest is far lower than the cost of the possible effects of climate change.
In Quebec, most of the population lives near the Saint Lawrence River. In some areas, the river banks are eroded by a metre every year, with dire consequences for nearby infrastructure. Agriculture and health are also major worries for the locals, on top of flooding.
You have directly linked Quebec’s carbon market to the Californian market. Would it not be more logical to join forces with the other Canadian provinces?
Ontario will join us soon, as will Manitoba. Our carbon market will soon cover 50% of the Canadian economy and 60% of the country’s population.
If we factor in the carbon tax in Alberta and British Colombia, we see that 90% of the Canadian population pays a price for their carbon emissions… so we can no longer talk of Canada as a poor performer on climate change.
Countries have committees to reducing their emissions as part of their voluntary national contributions (INDCs) to the COP21. How can carbon markets contribute to this?
This is talked about a lot here at the COP. It will force the federal state to approach us, to work together to reach the objective of the Canadian INDC, which is to reduce our emissions by 14% compared to 1990 levels. We are prepared to work towards this, but we have no details on how this objective will be met.
Do you think that the carbon market is a universal solution for cutting CO2 emissions?
To be able to put a price on carbon, first of all, you need emissions! Some developing countries don’t have enough. For expanding economies, it is a way to finance clean growth. We have a responsibility towards developing countries, and we will allocate $25 million from Quebec’s Green Climate Fund to support them.
Can we think about linking up the world’s carbon markets?
I think this is where we are heading in the long term. The Chinese came to Quebec a few weeks ago to study our market. And several American states have expressed an interest, including New York, Vermont, Oregon and Washington. Mexico has also signed an agreement in principle to join our alliance. There seems to be a real convergence emerging, so why not work with China?
And what about Europe?
We are in discussions with our European partners in the Climate Group’s States and Regions Alliance. Many regions are really interested in putting a price on carbon. Particularly Scotland, Wales, the Rhône-Alpes region of France, and Baden Württemberg and Westphalia in Germany. For now we are just talking about the subject. Of course this is not a competency they control, but we can think about common base-line prices, for example.
You don’t use carbon offsetting systems at all, like the Clean Development Mechanism. Why is this?
If we do any offsetting, it will be domestically, within Canada. Our main concern is the boreal forest. That is the forest belt around the Arctic, which is suffering from climate change. We are working on carbon capture in forest species, in order to increase the carbon absorption capacity of this immense forest.
Have you offset your journey to Paris?
Yes, for the whole delegation. That represents close to 72 tonnes of CO2, and we have used the Forêt d’Ardenne Foundation. These are young people that plant trees and protect the climate, but in Quebec. It is a symbolic gesture.