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Energy Plan - Government of Newfoundland and Labrador

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Capturing the Value <strong>of</strong> our Renewable<br />

<strong>Energy</strong><br />

As nations around the globe focus on finding ways to transition their economies<br />

to reduce, <strong>and</strong> ultimately eliminate, greenhouse gas emissions, increased<br />

dem<strong>and</strong> for renewable energy sources will increase the value <strong>of</strong> our portfolio <strong>of</strong><br />

renewable hydro <strong>and</strong> wind generation.<br />

In the long term, we will set a goal <strong>of</strong> greatly reduced GHG emissions. While caps<br />

on emission intensity (where caps are set per unit <strong>of</strong> production), <strong>and</strong> ultimately<br />

fixed emission caps will limit GHG emissions, various mechanisms have been<br />

proposed to help emitters make this transition. These include the purchase or<br />

trading <strong>of</strong> another party’s reductions (<strong>of</strong>fset credits) as well as investment in<br />

projects that can definitively reduce emissions through a technology. We must<br />

take actions that are both environmentally progressive <strong>and</strong> economically prudent<br />

as we take the necessary steps to reduce emissions.<br />

Policy actions that either limit the use <strong>of</strong> GHG emitting fuel sources or favour<br />

investments in renewable projects will facilitate the development <strong>of</strong> our renewable<br />

energy resources.<br />

Carbon Offsets <strong>and</strong> Trading<br />

Controlling emissions <strong>of</strong> harmful substances through issuing allowances, also<br />

called permits or credits, which can be traded among regulated companies, is<br />

an increasingly common approach to reducing emissions in many jurisdictions.<br />

Provided the overall number <strong>of</strong> allowances is limited <strong>and</strong> the regulatory regime is<br />

enforced, a tradable emission allowance scheme should result in the reduction<br />

<strong>of</strong> emissions in the most economic manner. We recognize, however, that this<br />

approach must ensure flexibility for each jurisdiction in the country.<br />

Greenhouse gases (GHGs) play a major role in global climate change regardless<br />

<strong>of</strong> where in the world they are emitted. This makes them excellent c<strong>and</strong>idates<br />

for control through tradable allowances. A GHG emission trading scheme for<br />

Canada has been the subject <strong>of</strong> discussion for almost a decade. In April <strong>of</strong> this<br />

year, the Federal <strong>Government</strong> released a Regulatory Framework for Air Emissions.<br />

Under this Framework, several elements <strong>of</strong> which are still in a consultation phase,<br />

firms will be allowed to meet their emission regulatory requirements through<br />

domestic inter-firm trading <strong>of</strong> emission credits <strong>and</strong> the trading <strong>of</strong> <strong>of</strong>fset credits.<br />

Offset credits are provided for emission reductions that take place outside <strong>of</strong><br />

regulated emitting activities. Industrial emitters would also have access to<br />

qualifying credits from the Kyoto Protocol’s Clean Development Mechanism.<br />

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