The Montreal bourse, which runs Canada's market for interest rate, index and equity derivatives, plans to run the Montreal Climate Exchange as a joint venture with the Chicago Climate Exchange.
The two partners announced their plan to launch Canada's first exchange-traded carbon emissions contract in July 2006, and based on previous statements they had hoped to have it up and running before now.
The federal government gave more details about its emissions regulations earlier this week.
"The government of Canada has provided greater regulatory certainty regarding intensity-based emissions reduction targets and the definition of a single compliance standard for tradable credits," Luc Bertrand, president and chief executive of the Montreal Exchange, said in a statement.
"This will enable emitters to more accurately forecast their individual intensity-based reduction targets and exposures."
The exchange said it expects to get approval for the carbon futures contract from Quebec's financial markets regulator "in the near future."
The Montreal Exchange is in the midst of being acquired by Toronto Stock Exchange parent TSX Group
On Thursday, a senior TSX Group executive said the type of carbon emission caps chosen by the federal government may shrink the potential market for trading credits and put the country out of step with other nations.
"Intensity-based" caps limit pollution as a percentage of industrial output, so absolute emissions can rise if a company's output rises.
The federal government's system could have limited compatibility with emissions trading in other jurisdictions, Rik Parkhill, interim co-chief executive of TSX Group, said in a speech in Calgary.
"An intensity-based system in Canada, apart from being potentially incompatible with other, larger and more liquid markets, could be smaller and less efficient for intensity-based trading than for a system based on trading under a strict cap," Parkhill said.
He also said a national market for carbon emissions would be preferable to a patchwork of provincial regimes.
The provinces of British Columbia and Manitoba are working with a coalition of western U.S. states to develop a regional trading market for carbon emission credits. Ontario and Quebec have also expressed interest in the idea. Details of the system are expected to be completed this fall.
"A national market that is compatible over time with the U.S. and Europe will make it easier to facilitate carbon reductions by emitters at competitive transaction costs," Parkhill said.
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