Recommendations: The federal government has to supervise the creation

Recommendations: The
proposed cap-and-trade program would require all producers and importers of
fossil fuels to have annual permits issued by government matching each year’s
sales. Permits would reflect the tons of carbon released when the fuel is
burned. The total number of permits issued in each year would equal the total
amount of carbon that could be released in that year. The total emission
permitted would decline by a certain percentage each year.

The federal government has to
supervise the creation of a market in which permits are sold and purchased. The
trading option enables firms which emit less than the cap they were allowed
that year to sell their permits to firms that were not able to meet the cap. In
other words, firms whose operations that have low abatement costs are able to
sell unneeded permits to firms whose abatement options are more expensive that
could continue to sell fossil fuels profitably 9. 

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The cap-and-trade program should
be implemented by the federal government with a consultation
to the provincial governments. This requires consideration of specific needs
and situations of each province (their economy, number of allowances, etc.).
The cap-and-trade program should be implemented in such a way that considers
the advantages of all provinces but at the same time creates a level playing
field for firms in all provinces to reduce emissions.

References:

1
 

World Bank
Open Data, https://data.worldbank.org/,
accessed November 2017

2
 

Energy Fact
Book 2016–2017, Natural Resources Canada

3
 

U.S. Global
Change Research Program, National Climate Assessment, draft for public
comment, 2012, http://ncadac.globalchange.gov.
 

4
 

M. Raupach,
“Global Emissions Rising Faster Than Expected,” Commonwealth Scientific and
Industrial Research Organisation, May 2007, www.csiro.au/
en/Organisation-Structure/Divisions/Marine–Atmospheric-Research/GlobalCarbonProject-PNAS.aspx; “Global Emissions Rising Faster than
Worst-Case Scenario, www.washingtonpost.com/blogs/wonkblog/post/global-co2
 

5
 

Kaufman, N.,
Obeiter, M., & Krause, E. (2016). Putting a price on carbon: reducing
emissions. World Resources Institute Issue Brief. January. Washington:
World Resources Institute.
 

6
 

United States Environmental Protection
Agency, Clean Air Markets,  Acid Rain
Program, https://www.epa.gov/airmarkets/acid-rain-program,
accessed November 2017

7
 

United States Environmental Protection
Agency, Clean Air Markets, https://www3.epa.gov/airmarkets/progress/reports/emissions_reductions_so2.html#figure1,
accessed November 2017

8
 

European
Commission, Climate Action, https://ec.europa.eu/clima/policies/ets_en#tab-0-0,
accessed November 2017

9
 

Repetto, R.
(2013). Cap and trade contains global
warming better than a carbon tax. Challenge, 56(5),
31-61.