Environment and Climate Change Canada (ECCC) today announced that the Government of Canada is exploring a policy framework to trade internationally transferred mitigation outcomes (ITMOs). ECCC stated that the framework “could allow Canadian companies to participate in international carbon markets catalyzing further investment in climate mitigation activities, including deployment of carbon removal technologies and nature‑based solutions.”
The announcement was made by Minister of the Environment, Climate Change and Nature Julie Dabrusin in Ottawa this morning.
Article 6 and ITMOs. ECCC noted that Article 6 of the Paris Agreement allows countries to choose to cooperate in meeting their national climate targets through measures including international carbon markets and the trading of ITMOs. It stated that ITMOs could mobilize investment in projects generating high-integrity emissions reductions and removals in Canada and abroad and create opportunities for the deployment of Canadian technology and expertise.
ITMO requirements. ECCC further noted that any carbon credit used as an ITMO must meet the requirements of Article 6, including requirements relating to additionality and corresponding adjustments. ECCC stated that it will ensure that any ITMO trading activities are aligned with Article 6 rules and guidance to support environmental integrity and rigorous accounting, including to help ensure that traded emissions reductions and removals are real, additional, verified, and permanent.
Next steps. ECCC said that it will engage with provinces and territories, Indigenous organizations, and other partners in exploring a possible approach to operationalizing ITMOs in the Canadian context. ECCC also stated that development of an ITMO framework complements the more than $13B in international climate finance included in the Spring Economic Update.
For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com or Jonathan McGillivray at jonathan@resilientllp.com.
