The objective of the Ontario government’s plan is to create a market for clean energy solutions. When considered alongside British Columbia’s provincial carbon tax and Alberta’s legislation for companies that emit high levels of pollution, the new decision results in 86 per cent of Canadian GDP being subject to carbon pricing.
Many global institutions propose that putting a levy on carbon pollution though a carbon tax or introducing a regulatory cap-and-trade system is important in order to achieve a workable strategy to tackle climate change. Institutions supporting such measures include the World Bank.
With the system of “cap-and trade“, the “cap” is a legal limit, set by a government, on the quantity of a certain type of pollutant that a region can emit each year). This is a market-based approach that provides economic incentives for achieving reductions in the emissions of pollutants. Within such the schemes, businesses can engage in carbon trading. Here a business having more emissions of carbon is able to purchase the right to emit more and a business having less emission trades the right to emit carbon to other businesses. It is not known if these forms part of the proposed arrangements.
With Ontario, the cap-and-trade system follows on from a phase-out of coal-powered electricity throughout the province, which began in 2014.
Exactly how the system will work is uncertain. Speaking to CBC News, Premier Kathleen Wynne said: “It would be irresponsible of us to speculate on exactly what the costs are going to be when we haven’t worked to design the mechanism yet.”
Nonetheless the move has been welcomed by environmental groups. To assess the reaction from environmentalists Digital Journal spoke with Ian Bruce, science and policy manager for the David Suzuki Foundation. The David Suzuki Foundation undertakes research aimed at providing clean energy solutions within Canada.
Bruce said: “Putting a price on carbon pollution is one of the most powerful government incentives to encourage companies and communities to pollute less.”
Bruce adds: Quebec and Ontario’s collaboration on pricing carbon emissions is a step toward real clean energy choices. We’ve seen evidence from around the world that these incentives work.”
Bruce argues that such measures are not about limiting economic growth. Referencing British Columbia’s carbon tax, which came into force in 2008, Bruce notes that the economy in the area has continued to prosper. At the same time, the use of fossil fuels declined by 19 percent.
