Natural Resources Canada has identified 14 large industrial emitter companies operating in Manitoba. Of those 14, six are headquartered in the province. These six companies will be competing in the proposed domestic emissions trading marketplace with up to 500 other companies. Understanding how the proposed market will work will help to reduce the competitive disadvantages that being a smaller player in the trading system might create.
Manitoba Hydro is currently active in the Chicago Climate Exchange in an effort to familiarize itself with the current state of the carbon market. These activities have helped Manitoba Hydro and other Canadian companies clearly identify the market conditions required for an effective trading system to exist.
Canadian derivative and commodity exchanges are exploring options for creating carbon trading platforms. They are consulting with business and government stakeholders to identify what services currently exist that would complement and support a domestic trading system.
While understanding the market and operating through a legitimate trading platform are vital in minimizing the risks involved in carbon trading, due diligence must also be exercised throughout the entire transaction. That means the accounting and taxation implications of emissions trading cannot be neglected. This due diligence requirement will provide the foundation for the needed verification of emission reductions. Without legitimate verification, emission reductions will not have any value in the marketplace.
Speakers - Kyoto Mechanisms and the Manitoba Business Sector Seminar (March 2003)
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