A number of greenhouse gas emissions trading schemes have been implemented or proposed for Canada, the United States and Mexico. Links among those schemes make sense given the close economic ties between the countries. All of the existing and proposed schemes, except Alberta, include provisions for unilateral use of credits and/or allowances from other schemes with quantity and qualitative restrictions. A federal scheme in the United States is likely to replace state schemes, with the possible exception of a few states with more stringent schemes, especially if states are given a role in implementation of the federal scheme. In Canada provinces that want, and are able, to establish that their schemes are equivalent to the federal scheme could continue to operate. Canada will have to modify its proposed scheme to achieve its expressed desire of linking with regulatory-based emissions trading schemes in the United States and Mexico.
Type: Working papers