The cap-and-trade system (CATS) is an economic tool implemented by the Québec government to reduce greenhouse gas emissions. Fuels consumed in Québec are subject to the CATS, through energy distributors such as Énergir. The amounts collected are earmarked by the government to finance various initiatives, including the fight against climate change.
The origins of the CATS
The CATS is the result of the Western Climate Initiative (WCI), an agreement Québec signed in 2008 with a few U.S. states and Canadian provinces, that made provisions for the establishment of a price on carbon emissions in the signatory territories.
As part of this initiative, the Québec CATS was implemented in 2013 and was linked to California’s system in 2014. It should be noted that fuel distributors were not subject to the regulation for the first two years. Since 2015, the CATS has expanded its horizons, and fuel distributors are now obligated to cover their emissions by purchasing emission permits.
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