The Ontario government recently introduced Bill 185, the
Environmental Protection Amendment Act (Greenhouse Gas
Emissions Trading), 2009. This new legislation proposes
amendments to the Ontario Environmental Protection Act
that would provide the regulatory authority to set up a greenhouse
gas cap-and-trade system in Ontario. The changes would permit the
creation of regulations that would set rules around various aspects
of a cap-and-trade system, such as the granting and/or auctioning
of allowances, linking to other trading systems, credit for early
action, the use of offsets, and verification and reporting
The government also released a discussion paper, Moving
Forward: A Greenhouse Cap-and-Trade System for Ontario, which
outlines the elements of a cap-and-trade system, gives a background
and overview of previous stakeholder comments on each element, and
outlines design issues and policy options for each element.
Government news releases indicate that stakeholder discussions on
the details of a cap-and-trade system will continue over the summer
and fall of 2009. Our information is that, at this point, the
preferred model inside the government resembles the nitrogen oxides
and sulphur dioxides Regulation 194/05, albeit with a possible
auction component as well as provisions for offsets.
The details of the cap-and-trade system that is finally adopted
in Ontario, such as the extent of credit that will be given for
early action and the mechanism chosen to allocate allowances
(whether by auction or gratis), will have broad implications for
This article previously appeared in McCarthy Tétrault
Co-Counsel: Technology Law Quarterly.
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