The governments of Canada and British Columbia (BC) will explore creating a new multi-provincial carbon credit system as part of a broader agreement to support new energy and conservation projects.
The agreement announced on 2 July commits the two to start exploring a "national carbon credit framework", which could include credits generated through consumer sustainability choices, such as retrofitting homes with heat pumps and electric vehicles, and nature-based solutions such as wetland restoration.
It also commits the federal government and provincial government to negotiate compensation for BC for fiscal impacts caused by federal changes to the industrial carbon pricing benchmark targeted for 1 December.
Both commitments do not include concrete pricing, credit values, or a framework structure at this stage.
The credit framework would be used to "unlock" new categories of economic value in the low carbon transition such as protected forests, restored watersheds, clean energy systems and nature-based solutions.
"Our government is focused on building the carbon markets that work, not just on paper but in practice," said the office of Canadian environment minister Julie Dabrusin. "British Columbia and Canada will work with other provinces and territories to explore options for developing a National Carbon Credit Framework. We will have more to share in due course."
This compensation agreement closely follows May's agreement between Alberta and the federal government on resetting their reciprocal industrial carbon pricing framework to reach a headline price of C$140/metric tonne ($101.92/t) by 2040 with floor pricing starting in 2030 at C$60/t.
The agreement also outlines a host of initiatives to expand into global markets, including quicker permitting of LNG and critical minerals projects, and signaling expansion of a Vancouver terminal to increase heavy oil exports to new markets.
