On February 12, 2015, the Ontario Ministry of the Environment
and Climate Change (MOECC) released Ontario's Climate
Change Discussion Paper: 2015. The Discussion Paper outlines
Ontario's long-term vision for transforming the province into a
low-carbon economy and suggests short-term actions to accelerate
that transformation. Key among these actions is to develop, by the
end of 2015, a plan to price greenhouse gas emissions in the
province. The ultimate purpose of the Discussion Paper is to
generate feedback that will assist the provincial government in
developing a comprehensive strategy (i) to reduce greenhouse gas
emissions in 2020 to 15% below 1990 emission levels, (ii) to
achieve an 80% reduction of 1990 emission levels by 2050, and (iii)
to work toward greenhouse gas emission neutrality by the end of the
Long-Term Goals, Short-Term Actions
Ontario has significantly reduced its greenhouse gas emissions
in recent years, having closed the province's remaining
coal-fired electricity generation units in 2014. Even so, the
Discussion Paper highlights several long-term goals for further
transforming Ontario into a low-carbon economy. These goals include
encouraging sustainable, low-carbon economic growth; promoting
innovation in low-carbon technologies; and designing communities
that are built both to minimize their carbon footprint and to adapt
to a changing climate.
To achieve these long-term goals, the Discussion Paper
recommends four short-term actions:
imposing a price on greenhouse gas emissions, likely by
adopting a cap-and-trade system and/or carbon tax;
improving energy conservation and energy efficiency,
particularly in the transportation, electricity, manufacturing,
agriculture, forestry and waste management sectors;
funding the research and development of low-carbon
promoting climate change resilience, especially the ability of
infrastructure to adapt to extreme weather events.
The Discussion Paper reiterates the government's intention,
expressed publicly earlier this year, to release a plan for pricing
greenhouse gas emissions at some point in 2015. What remains to be
seen is whether Ontario will adopt a cap-and-trade system or a
carbon tax for pricing those emissions or both.
Generally, a cap-and-trade system would limit the emissions of
regulated facilities and allow them to meet their caps by either
reducing their own emissions or by purchasing credits from other
emitters who could achieve the reductions more cost-effectively.
Ontario was previously involved in developing model cap-and-trade
rules for the Western Climate Initiative, whose membership at the
time included several Canadian provinces and U.S. states. Those
model rules formed the basis for the integrated cap-and-trade
systems that are now operational in Quebec and California.
According to the Discussion Paper, ten companies with operations in
Ontario have facilities that are currently regulated under
In contrast, carbon taxes typically impose a fee on each tonne
of a fossil fuel that is either purchased or sold. Those fees can
be imposed on the end-users of the fuels, such as the carbon tax in
effect in British Columbia, or on importers or distributors of the
fuels, such as that in effect in Quebec.
According to the Discussion Paper, Ontario will confirm this
spring whether it intends to implement a cap-and-trade system, a
carbon tax and/or some other mechanism for pricing greenhouse gas
emissions. To inform that decision, the Discussion Paper invites
comments on the following questions:
What carbon pricing market mechanism or mechanisms will best
achieve greenhouse gas reductions in Ontario while encouraging
innovation, productivity and a transition to a low carbon economy?;
For those industries currently facing economic challenges, what
carbon pricing mechanism or mechanisms would be most beneficial?
What considerations should be taken into account when designing
The MOECC is accepting comments on the Discussion Paper until
March 29, 2015. Comments can be submitted online here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Ontario's Ministry of the Environment and Climate Change continues to roll out its Climate Change Action Plan with its proposed GHG guide for projects that are subject to the province's Environmental Assessment Act.
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