AUIDS 276 Lecture Notes - Lecture 9: Market Clearing
29 May 2018
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Course
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Slide 1
To effectively reduce GHG emissions and meet our 2030 goals the federal government must
implement a cap and trade system that all provinces are required to adopt. The cap will set
a limit on the amount of emissions a province is allowed, and the trade market will allow
provinces to buy and sell allowances amongst each other.
Slide 2
According to Environmental and Climate Change Canada, the Canadian federal
governments have committed to reducing GHG emission from the current level of 726
mega tonnes to 525 mega tonnes by 2030, without taking into account the contribution of
land use and forestry sectors. These targets were set in consideration of the different
emission controlling tools that different Canadian provinces use. Contemporarily, Ontario
and Quebec use the cap and trade system, Alberta has the Climate change and Emissions
Management Act, carbon tax and Saskatchewan regulates emission under the Management
and Reduction of Greenhouse Gases Act. All these tools have their own limitations. With the
cap and trade in place our target for 2030 is expected to be 435 mega tonnes.
Slide 3
The federal government will set a cap that best estimates the emissions of that year. The
cap will decline annually to promote the reduction of emissions across Canada. The federal
government will conduct a carbon allowance auction using the uniform-priced-sealed bid,
whereby the provinces announces the amount they are willing to pay for a given quantity
of permits and all winners pay the same market clearing price. The cost of bidding must be
low enough to induce full participation, so that provinces that need the permits the most
have the opportunity to bid for them. To promote fairness and transparency information
regarding auction outcomes should be made available to detect any illicit transactions. All
proceeding acquire from the auction will be invested in green technologies and initiatives.
With all these reasons we believe that the cap and trade will yield the best results to
decrease GHG emissions across Canada.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
To effectively reduce ghg emissions and meet our 2030 goals the federal government must implement a cap and trade system that all provinces are required to adopt. The cap will set a limit on the amount of emissions a province is allowed, and the trade market will allow provinces to buy and sell allowances amongst each other. These targets were set in consideration of the different emission controlling tools that different canadian provinces use. Contemporarily, ontario and quebec use the cap and trade system, alberta has the climate change and emissions. Management act, carbon tax and saskatchewan regulates emission under the management and reduction of greenhouse gases act. With the cap and trade in place our target for 2030 is expected to be 435 mega tonnes. The federal government will set a cap that best estimates the emissions of that year. The cap will decline annually to promote the reduction of emissions across canada.
