The province of Quebec has announced it will start a carbon emissions cap-and-trade system in 2012, days after Canada became the only country to ratify and then withdraw from the Kyoto Protocol.
Starting in January, emitters in Quebec will be able to buy and sell greenhouse gas emission allowances on a local market during an initial trial run that could eventually lead to a continental cap and trade system, said a statement.
The following year caps will be imposed on 75 big industrial polluters in the Canadian province whose annual carbon dioxide emissions exceed 24,999 tons of CO2 equivalent.
And in 2015, fuel distributors and importers who exceed the annual threshold will also be subject to the capping.
"Quebec thus officially steps to the starting line, next to California," Quebec Environment Minister Pierre Arcand said in a statement, pointing to the US state's similar plan for a carbon market.
Both are based on regulations established under the Western Climate Initiative - a collaboration of 11 US states and Canadian provinces to curb emissions of the gases blamed for damaging Earth's fragile climate.
The initiative was launched in 2007 amid frustrations with Ottawa and Washington's inaction on climate change.
However, only California, Quebec and the Canadian provinces of Ontario, British Columbia and Manitoba remain committed to a cap-and-trade system as part of the group's efforts to cut regional CO2 emissions.
The second step in Quebec's program is to reach agreements with those four WCI partners to link their respective cap and trade systems together.
Quebec is Canada's second most populated province with eight million mostly French-speaking residents.
It set an emissions reduction target for itself of 20 per cent by 2020 based on 1990 levels despite Canada's withdrawal this week from the Kyoto Protocol, the only global treaty that sets down targeted curbs in global emissions.
Canada agreed under 1997 protocol to reduce CO2 emissions to 6.0 per cent below 1990 levels by 2012, but its emissions have instead increased sharply.
Pulling out of Kyoto now allows Canada to avoid paying penalties of up to $C14 billion ($A13.7 billion) for missing its targets.
Canadian Environment Minister Peter Kent on Monday also cited major impacts on Canada's economy that will be avoided by withdrawing from the treaty.
Quebec's move was harshly criticised by local businesses but was welcomed by environmentalist activists.
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