The Harper government took the long-awaited step yesterday of detailing its plan to trade pollution permits on the open market.
Environment Minister Jim Prentice released two draft documents laying the ground rules for a federal carbon-offset scheme.
The guidelines set out which offset projects qualify for the federal system, how others can apply for inclusion, the value of each offset credit, how emissions cuts are tracked and verified, and other details of the plan.
"The offset system, like all elements of our climate-change plan, is aimed first and foremost at reducing emissions in Canada," Mr. Prentice said.
"And we will be rigorous in ensuring that credits will only be issued for projects that actually reduce the amount of greenhouse-gas emissions in this country."
The government will place a cap on greenhouse gases and allow firms to buy and sell emissions permits within that cap. Participants who don't meet the emissions targets can buy credits from those with a surplus instead of reducing their emissions.
Mr. Prentice told reporters after a luncheon speech in Ottawa that carbon-offset projects must have started after Jan. 1, 2006, to be eligible for inclusion in the federal trading system.
However, only carbon offsets made after Jan. 1, 2011, will count toward the reduction targets that industry will be required to meet.
Certified projects must be able to prove they're actually cutting carbon emissions.
An offset credit is equivalent to one tonne of carbon dioxide. The Environment Minister said the federal government will not set the price of carbon offsets. Market forces will instead dictate the permits' value.
The federal offset system will "complement" a patchwork of regional carbon markets, Mr. Prentice said, and "not supplant or duplicate them."