Environment Minister Steven Guilbeault published a discussion paper on Monday that outlined two regulatory options.
The first is a cap-and-trade system that would see a set number of allowances distributed to all oil and gas facilities. Lower-emitting facilities would then be allowed to trade allowances with higher-emitting ones. The total allowances would decline over time in line with the emissions cap for the sector.
The other option would impose a steeper carbon price on the sector to drive down emissions, and require provincial governments with their own carbon pricing systems to make the same changes. “Both options could include some time-limited flexibilities to reflect the timelines of major emission reduction projects,” the government said in a background document to the discussion paper.Article content