Emissions Trading (O. Reg. 397/01).

The present Regulation enforces the Environmental Protection Act (R.S.O. 1990, c. E. 19). In particular, the Regulation sets new sector-wide caps on airborne emissions of NOX and SO2 from the electricity sector. The reductions will occur in two steps: the first at the end of 2001, followed by a larger reduction in 2007. Regulation also sets out rules for a system of emissions reduction trading, giving power plants the option either to cut their own emissions directly or to buy emission reduction credits (ERCs) to help meet their new emission limits. The power plants can trade allowances among themselves, but they can also buy ERCs from other uncapped industries or organizations that have demonstrated emission reductions. ERCs are intended to encourage emission reduction projects that might otherwise not be economical. They can also spur technological innovations, which may then be more widely adopted. The text consists of 35 sections.