Ministry of Environment

Greenhouse Gas Reduction (Cap and Trade) Act


The Greenhouse Gas Reduction (Cap and Trade) Act was given Royal Assent on May 29, 2008. This Act, which came into force by regulation of the Lieutenant Governor in Council, provides the statutory basis for setting up a market-based cap and trade framework to reduce greenhouse gas emissions from large emitters operating in the province. 

British Columbia is the first Canadian province to introduce legislation authorizing hard caps on greenhouse gas emissions. The Act enables B.C. to implement a cap and trade system, but the details of the system are being worked out in cooperation with the partners in the Western Climate Initiative (WCI). The WCI is a multi-jurisdictional partnership launched in February 2007 to address climate change.

Cap and trade systems establish an overall cap or limit on emissions, while the “trade” part of the system allows regulated emitters to buy, bank or sell emissions allowances and offset units. Those who can reduce emissions more efficiently are able to sell their surplus units to those who find it more challenging to do so. This system transfers emission reduction responsibility and management to emitters, while market forces help determine the distribution of reductions.

This Act along with current and ensuing regulations will allow the Ministry to progress toward meeting the government’s commitment to reduce B.C.’s greenhouse gases by at least 33 percent below current levels by 2020.