The Nova Scotia government has chosen a non-profit corporation to run the province's cap-and-trade system.

The province has agreed to pay the Western Climate Initiative (WCI) $400,000 this year and about $300,000 per year in annual fees starting next year, when the emission trading program is supposed to be up and running.

Environment Minister Iain Rankin called it a cheaper option than creating an administrative structure from scratch.

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"It's, as you can imagine, quite an endeavour to have all the system's information and analyze it and make sure that it's verified appropriately," he told reporters outside his constituency office in Timberlea, N.S., Monday.

"This is a credible system that's being used with three jurisdictions and we're comfortable using it rather than the alternative, which would be creating a whole IT system internally which would be more costly and wouldn't have the benefit of having a functioning system," said Rankin.

WCI is currently administering the carbon credit trading programs of Quebec, Ontario and Manitoba. California is also part of the system. The corporation was created in 2011 to "provide administrative and technical services to support the implementation of state and provincial greenhouse gas emissions trading programs."

Although member organizations trade among themselves, Nova Scotia credits will only be traded within the province's borders.

Stephen Thomas, energy campaign co-ordinator at the Ecology Action Centre in Halifax, called it a "good first step," although the environmental group would like to see Nova Scotia credits traded like they are within the WCI.

"We think that's critical," he said. "Right now in Nova Scotia we have a carbon pricing system that I don't think really puts a price on carbon.

"We're giving away all our emission credits for free to polluters and we think there's a real opportunity to have those polluters pay for those credits and use that money for the things that we need here in Nova Scotia."

Thomas pointed to Ontario, where last year the province raised more than $2 billion auctioning off carbon credits.

"We can auction here too and use that money for offsetting costs and really supporting folks who are struggling with energy poverty — folks who are struggling to meet their energy bills in Nova Scotia."

Rankin said trading credits outside the province may be a facet of the system later on, but not initially.

"The legislation does allow for linking with other jurisdictions, should that be in the best interests of Nova Scotians, but we are a leader in reducing greenhouse gas emissions, so those emissions will be recognized when we set our caps with the federal government and we're going to make sure that the reductions happen here."

Rankin said the province would be ready to announce emission caps in the "coming months."