MONTREAL (AFP) — Montreal's stock exchange on Friday officially launched the Montreal Climate Exchange, the country's first carbon trading forum aimed at helping to cut greenhouse gases.
The trading mechanism seeks to get companies which produce more emissions of greenhouse gases to buy what amounts to the rights of others that are less polluting as part of broader efforts to tackle global warming.
Canada had agreed under the international Kyoto Protocol to reduce carbon dioxide (CO2) emissions to 6.0 percent below 1990 levels by 2012, but emissions have instead increased by more than 35 percent.
Last year, the government outlined a new plan to cut greenhouse gas emissions 20 percent, based on 2006 levels, by 2020, saying the targets agreed to by the previous administration were unattainable.
The new Montreal market (MCeX) is a joint venture with the Chicago Climate Exchange, and was hailed as a milestone for the country's financial markets.
"The listing of the MCeX futures contract is a 'first' and it makes Montreal Climate Exchange the first regulated environmental market in Canada," said Luc Bertrand, the exchange president.
"The MCeX market will help Canadian industry discover the true 'price of a tonne of carbon' under the new federal regulatory framework," he added.
Environment Minister John Baird added: "Carbon trading and the establishment of a market price on carbon are key parts of our Turning the Corner plan to cut Canada's greenhouse gases an absolute 20 percent by 2020.
"Clearly, our government's action to fight climate change is working hand in hand with groups like the Montreal Climate Exchange."
A similar exchange already exists in Chicago and Japanese and Chinese authorities are already mulling similar plans.
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