Worldwide efforts are being made to cut greenhouse gas emissions and combat climate change. More and more nations are putting a price price on carbon pollution in an effort to reduce emissions at a cheap cost and promote clean technologies. Presently there are around 68 carbon pricing initiatives worldwide, according to the World Bank.
Canada is focussing on building Carbon Market.
The Paris Agreement, an international pact to limit global warming to far below 2°C over pre-industrial levels, is one of the conditions for Canada’s participation in the carbon market. It is anticipated that it will assist Canada in achieving its goal of lowering GHG emissions by 30% below 2005 levels by 2030.
A Canadian-led project called the Global Carbon Pricing Challenge urges other nations to make pollution pricing a key component of their national climate plans. Now, carbon pricing covers around 20% of the world’s greenhouse gas emissions. The Global Carbon Price Challenge calls on nations to cooperate in order to cover 60% of world emissions by 2030.
The Fuel Charge and the Output-Based Pricing Scheme are the two primary pillars of Canada’s carbon market (OBPS). The provinces and territories mentioned here manufacture, import, or consume fossil fuels like gasoline, diesel, and natural gas. These fuels are subject to the Fuel Charge. Large industrial plants that release more than defined CO2 annually are subject to the OBPS.
The Greenhouse Gas (GHG) Offset Credit System in Canada promotes the implementation of creative initiatives that reduce GHGs in comparison to business-as-usual activities.
By registering and carrying out projects that adhere to the regulations for Canada’s GHG Offset Credit System and a relevant federal GHG offset procedure, compliant projects can obtain federal offset credits under Canada’s GHG Offset Credit System.
Offset credits are measurements of the actual greenhouse gas (GHG) emissions that were reduced or removed from the atmosphere as part of a project.
Facilities covered by the federal Output-Based Pricing System may sell and use offset credits. In addition, third parties seeking to satisfy voluntary climate objectives or pledges may also sell and use offset credits.
The Canadian Federal Carbon Pricing System, often known as the country’s carbon market, is a legally required system created to lower greenhouse gas (GHG) emissions and fight climate change. It was implemented in 2018 and is applicable to the provinces and territories without their own carbon pricing schemes.
A price is put on carbon emissions under the system, which encourages businesses and people to lessen their carbon impact. A minimum carbon pollution price of $65 per tonne of GHG emissions estimated in CO2e in 2023, increasing by $15 annually to $170 per tonne of CO2e in 2030, is required for carbon pollution pricing schemes.
Success of Canadian Carbon market will ensure a greener future for the planet and will be an example for other Nations to launch similar initiative in their jurisdiction.
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