Energy Plan - Government of Newfoundland and Labrador

Capturing the Value of our Renewable
Energy
As nations around the globe focus on finding ways to transition their economies
to reduce, and ultimately eliminate, greenhouse gas emissions, increased
demand for renewable energy sources will increase the value of our portfolio of
renewable hydro and wind generation.
In the long term, we will set a goal of greatly reduced GHG emissions. While caps
on emission intensity (where caps are set per unit of production), and ultimately
fixed emission caps will limit GHG emissions, various mechanisms have been
proposed to help emitters make this transition. These include the purchase or
trading of another party’s reductions (offset credits) as well as investment in
projects that can definitively reduce emissions through a technology. We must
take actions that are both environmentally progressive and economically prudent
as we take the necessary steps to reduce emissions.
Policy actions that either limit the use of GHG emitting fuel sources or favour
investments in renewable projects will facilitate the development of our renewable
energy resources.
Carbon Offsets and Trading
Controlling emissions of harmful substances through issuing allowances, also
called permits or credits, which can be traded among regulated companies, is
an increasingly common approach to reducing emissions in many jurisdictions.
Provided the overall number of allowances is limited and the regulatory regime is
enforced, a tradable emission allowance scheme should result in the reduction
of emissions in the most economic manner. We recognize, however, that this
approach must ensure flexibility for each jurisdiction in the country.
Greenhouse gases (GHGs) play a major role in global climate change regardless
of where in the world they are emitted. This makes them excellent candidates
for control through tradable allowances. A GHG emission trading scheme for
Canada has been the subject of discussion for almost a decade. In April of this
year, the Federal Government released a Regulatory Framework for Air Emissions.
Under this Framework, several elements of which are still in a consultation phase,
firms will be allowed to meet their emission regulatory requirements through
domestic inter-firm trading of emission credits and the trading of offset credits.
Offset credits are provided for emission reductions that take place outside of
regulated emitting activities. Industrial emitters would also have access to
qualifying credits from the Kyoto Protocol’s Clean Development Mechanism.
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