Canada says plans to set up market for carbon

Wed Jun 10, 2009 2:41pm EDT
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By David Ljunggren

OTTAWA (Reuters) - Canada on Wednesday unveiled plans for a national carbon market that it said would help cut emissions of greenhouse gases by making it more attractive to invest in clean energy projects.

Ottawa said the first major step would be to put a price on carbon, and Environment Minister Jim Prentice said it would be up to markets to set that price.

The announcement is an important step for the minority Conservative government, which opponents regularly accuse of not doing enough to protect the environment.

A key element of the market is a set of rules for carbon offset credits, which will come into force on Jan 1, 2011.

"The offset system will be a key part of our overall commitment. It is intended to generate real reductions on greenhouse emissions," Prentice said in a speech in Ottawa.

Under the rules, companies and individuals would receive the credits for investing in clean energy projects like wind turbines and could sell those credits to enterprises that cannot meet targets for cuts in greenhouse gas emissions.

Planting new forests or capturing methane gas from landfills and turning it into a usable fuel could also be offset projects, Prentice said.

The offset system targets those parts of the economy that will not be covered by planned federal curbs on heavy industrial emitters of greenhouse gases.   Continued...