Ontario cap and trade program design options


Send the Ministry of the Environment and Climate Change a message today on this critical issue by using our easy form below or by emailing your own message directly to melissa. Call for a strong cap and trade program Send the Ministry of the Environment and Climate Change a message today on this critical issue by using our easy form below or by emailing your own message directly to melissa.

We cannot afford to drag our feet any longer on climate action. Science is also recommending more aggressive targets. The carbon cap should be adjusted to reflect this more aggressive target. Set the cap as upstream as possible at the source of extraction or importation of GHG pollution; 2. Broad coverage of all sectors and sources of GHG pollution with full auctioning of pollution permits; 3. An annually decreasing cap to meet targets and a strong floor price with predictable increases; 4.

Price protection for low income individuals and households; 5. Simple, transparent pricing system that does not include pollution offsets, or limits them to a small proportion of pollution reductions and ensures that they meet high standards; 6. Cap and trade revenues should not go into general funds; 7. As mentioned above, early promises to be a busy time for MOECC with the stated intention to introduce new provincial climate change legislation, a five-year action plan and a regulatory proposal based on feedback from the Discussion Paper.

Currently, Canada has a patch-work of climate regulations with Ontario and Quebec participating in their own carbon market with California and BC and, recently, Alberta, preferring the carbon tax route to achieving their emissions reductions targets.

Key market design features In addition to laying out the high-level aspects of the cap-and-trade market, the Discussion Paper proposed a number of more detailed market design features that will be crucial to any future participants in the market. Below are some of the most important proposed features: However, the EITE concern only applies to the industrial sector, so electricity, transportation fuel and natural gas distributors would still have to purchase their allowances beginning in Banking allowances - To further mitigate potential compliance costs of the new regime, MOECC proposes that covered entities will be permitted to bank allowances over time so unused allowances in one compliance period may be used or traded in subsequent periods.

Offsets - MOECC plans to allow the use of offset credits using Ontario-approved offset protocols, which are still under development. MOECC proposes a further ten project types will be subject to a more intensive protocol review process.

Comment period on Discussion Paper now open As mentioned above, early promises to be a busy time for MOECC with the stated intention to introduce new provincial climate change legislation, a five-year action plan and a regulatory proposal based on feedback from the Discussion Paper.

One other area to watch out for is the possibility of border adjustments whereby the federal government could introduce new tariffs or taxes on imports from countries without carbon pricing schemes to help level the playing-field from EITE industries.