The Climate Report 2017/18 - Page 78



will distribute (for free or by auction).
Emitters have several options for filling that
gap, such as reducing their emissions
further, perhaps as the result of Ontario’s
new Climate Change Action Plan (CCAP), or
buying allowances from California.
If these additional emissions were reflected in
Ontario’s annual GHG totals, reported emissions
would be much higher. There is lots of room to
improve, and many opportunities to do so.
ONTARIO’S CAP AND TRADE PROGRAM
To do its fair share, Ontario is joining a
worldwide movement to put a price on GHG
pollution. Ontario’s new Climate Change
Mitigation and Low-carbon Economy Act, 2016,
created a cap and trade program that covers 82
per cent of Ontario’s direct emissions. The first
compliance period began on January 1, 2017,
and will be linked with California (USA) and
Quebec (Canada) in 2018.
Linking Ontario’s cap and trade program
with California and Quebec will reduce costs
for Ontario GHG emitters, and has other
important benefits. But if Ontario emitters
buy allowances from outside the province,
Ontario emissions may not go down much.
Also, the California cap and trade program
faces legal problems. A timely supply of highquality Ontario offset credits (i.e., voluntary
GHG reductions outside the capped sectors,
which can be purchased by emitters) may be
key to keeping investment and GHG
reductions in Ontario.
In general, the cap and trade program is
reasonable and well-designed, balancing the
urgent need for GHG reductions with the cost to
Ontario citizens and businesses, and the need to
build public and non-partisan support. The types
of changes that will reduce GHG emissions can
also have many benefits for Ontario’s
environment and economy.
In 2020, Ontario’s capped emitters (i.e., those
covered under the cap and trade program) will
have a 24 Mt gap between their projected
business as usual emissions and the allowances
(i.e., permits to pollute) that the government
76
Buying California allowances could send
some emitters’ capital to California for
several years. However, the cap and trade
program, plus the Climate Change Action
Plan, should also reduce Ontario’s multibillion dollar imports of petroleum and
natural gas. The balance could be in
Ontario’s favour.

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