On May 27, Minister of the Environment John Gerretsen introduced
Bill 185, the Environmental Protection Amendment Act
(Greenhouse Gas Emissions Trading), 2009.
Bill 185 amends the Environmental Protection Act
(EPA) to allow Ontario to implement its own emissions
trading scheme. It is designed to allow the Province to fulfill its
obligations under the Western Climate Initiative (WCI) and its
Memorandum of Understanding with Quebec. The proposals also
anticipate implementation of a cap and trade scheme in the USA and
the emergence of a North America wide scheme. Such a scheme could
be in place as early as 2012.
The Bill re-enacts section 176.1 of the EPA, which
authorizes the making of regulations relating to emissions trading
and other market-based approaches. The Province's current NOx
and SOx trading scheme operates under these provisions. The Bill
clarifies that section 176.1 applies to greenhouse gases
Specifically, the proposed amendments expand and clarify the
current regulation-making powers under section 176.1 to:
establish the scope of a GHG cap-and-trade program;
cover the creation, use, distribution, and trading of
allowances and offsets;
support the distribution of GHG allowances by auction, free of
charge or by other means;
establish monitoring and reporting requirements;
support emission trading across jurisdictions; and
permit the delegation of regulation-making powers to another
person or body.
The MOE has also released a discussion paper, Moving
Forward: A Greenhouse Gas Cap-and- Trade System for Ontario.
That paper will guide consultations over the summer on what
Ontario's cap-and-trade emission trading system should look
like. Both the proposed amendments and the discussion paper have
been posted on the Environmental Registry for a 60- day comment
period, with a deadline of July 26, 2009.
In a cap-and-trade system, governments set and apportion limits
on the total amount of GHGs that can be emitted from regulated
facilities. Facilities can earn credits for reducing their
emissions below these. Facilities that fall short of their targets
can avoid a fine by buying those credits. Other emissions savings
projects (offsets) by non-regulated entities can earn credits to
sell into this market.
Ontario is currently working with Quebec, British Columbia,
Manitoba and seven U.S. states (Arizona, California, Montana, New
Mexico, Oregon, Utah and Washington) to develop a common GHG
trading system, the WCI. In June 2008, the province also signed a
Memorandum of Understanding with Quebec to collaborate on a
regional cap-and-trade system for GHGs. The introduction of the
proposed American Clean Energy and Security Act (the
Waxman-Markey Bill) indicates that the USA could establish its own
national cap and trade program as early as 2012.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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