The B.C. government is aiming to reduce air pollution with new legislation capping some greenhouse gas emissions, but the opposition says the plan is full of holes.

The new cap-and-trade system is the first of its kind in Canada and part of the Liberal government's plan to cut B.C.'s greenhouse gas emissions by one-third by 2020.

The law will place a cap on emissions of carbon dioxide, one of the main greenhouse gases contributing to climate change. It also allows large polluters to participate in a government-monitored trading system that enables them to offset some of their emissions by trading or buying pollution credits.

Environment Minister Barry Penner said the scheme is designed to spur innovative, low-cost solutions to reduce carbon pollution.

"The greenhouse gas reduction cap-and-trade act will help us achieve those targets by enabling a market-based system to limit greenhouse gas emissions in B.C.," said Penner on Thursday in Victoria.

However, the government has not yet said what the pollution cap will be, how much it will cost to buy pollution credits or what penalties will be imposed on violators.

Businesses will buy way out of compliance: NDP

NDP environment critic Shane Simpson said it appears the law will allow businesses to buy their way out of complying with any caps on polluting emissions.

"There's no commitment to auctioning of credits. It seems they're quite open to allocation. That's not going to be successful. We need to auction those credits if we are to be successful," said Simpson.    

"We have no idea what the thresholds will be, which is the level at which companies will get into the cap-and-trade system," said Simpson.

Penner said it's too early to say whether those credits will be sold, auctioned off or simply allocated.

What Penner has said is each credit will be equal to one tonne of carbon dioxide; each business must have credits equal to the amount of greenhouse gas it emits. They can sell unused credits to other businesses.

The cap-and-trade law also allows the province to participate in the joint Canada-U.S. Western Climate Initiative to fight climate change, which is also planning a cap-and-trade system to reduce greenhouse gases, said Penner

The legislation will also provide for administrative penalties, which will be set in the regulations and will be an automatic consequence of non-compliance.

"Rather than government dictating technologies or emission standards, the system sets an overall cap on emissions from regulated sources," said Penner.

"The cap ensures that emissions are reduced, but the market determines where those reductions are achieved. This will help reduce greenhouse gas emissions in a more efficient, cost-effective way," said Penner.