The Evolution of Canada's Carbon Markets and Their Role in Energy Transition
The tapestry of compliance and voluntary market mechanisms for carbon and other environmental attributes in Canada’s infrastructure capital markets reflects the almost 30-year history of carbon policy development in Canada and around the globe. This history of provincial and federal policy and regulatory changes has left some scars and stranded investments. As a result, energy market professionals and emission offset project developers have had to be resilient in their efforts to scale, integrate, and maximize opportunities for carbon credit products. Recently, we have witnessed increased efforts toward climate-focused investment criteria and technology-bolstered acceleration toward net-zero targets. Carbon credits are one of the key tools that will allow conventional businesses to continue operating as the economy decarbonizes, and they can also facilitate investment in new technologies and practices that will be critical to achieving material economy-wide emissions reductions. Both domestically and internationally, however, there are key barriers that are limiting carbon markets and that highlight the need for more carbon finance investment and policy certainty, as well as standardization and credibility in both compliance and voluntary environmental product markets.
Following the Supreme Court of Canada’s ruling in March 2021 to uphold the constitutionality of the federal government’s Greenhouse Gas Pollution Pricing Act , market expectations were high (and perhaps still are) that the regulatory landscape supporting carbon finance in Canada would finally come into better focus. This article will explore the current snapshot of compliance and voluntary carbon finance tools available in Canada, and will highlight some of the challenges and opportunities in navigating the interplay between these products.
Author(s) retain original copyright in the substantive content of the titled work, subject to the following rights that are granted indefinitely:
- Author(s) grant the Alberta Law Review permission to produce, publish, disseminate, and distribute the titled work in electronic format to online database services, including, but not limited to: LexisNexis, QuickLaw, HeinOnline, and EBSCO;
- Author(s) grant the Alberta Law Review permission to post the titled work on the Alberta Law Review website and/or related websites.
- Author(s) agree that the titled work may be used for educational or instructional purposes and/or in educational or instructional materials. The author(s) acknowledge that the titled work is subject to other such "fair dealing" provisions and applicable legislation.
- Author(s) grant a limited license to those accessing the titled work from an electronic database or an Alberta Law Review website to download the titled work onto their computer and to print a copy for their own personal, non-commercial use, subject to proper attribution.
To use the journal's content elsewhere, permission must be obtained from the author(s) and the Alberta Law Review.