Ontario has agreed to sign on to the Western Climate Initiative, a market-based system designed to reduce greenhouse gas emissions.

Premier Dalton McGuinty agreed to the so-called cap-and-trade system on Friday in Quebec City during the provincial leaders meeting.

McGuinty said Ontario is "proud to be welcomed into this important organization of climate-change leaders."

Ontario Environment Minister John Gerretsen called the cap-and-trade system "fair and effective (and) economically and environmentally sound."

The initiative already includes Quebec, Manitoba, British Columbia and seven states in the western U.S.

Ontario and Quebec had earlier signed their own cap-and-trade deal on June 2 during a joint cabinet session.

A cap-and-trade system, to be in place by 2010, will limit industrial emissions and let polluters buy credits from greener companies.

Alberta and Saskatchewan have been critical of the initiative, calling it a cash grab by other provinces.

Ontario's decision to join the initiative is being hailed by at least one environmental group.

Dale Marshall of the David Suzuki Foundation said it's a great thing, and now leaves four provinces representing 80 per cent of Canada's population covered by the same emissions reduction system.

He believes that could be the basis of a blueprint for a continent-wide agreement.