Ontario adopts cap and trade system to reduce greenhouse gases

TORONTO – Ontario will adopt a cap-and-trade system to reduce greenhouse gas emissions, signing a deal with Quebec, but Premier Kathleen Wynne offered scant details Monday on pricing and the effects on hydro bills and gas prices.

The announcement comes seven years after Ontario first signed onto the Western Climate Initiative with Quebec and California, but specifics will come later, 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,” she said. That will come in the next six months, Wynne said.

Estimates from Quebec and California peg the increased cost on the price of gasoline to be between two and 3.5 cents.

Joined @ecobee & @Glen4ONT introducing cap & trade to protect air we breathe, water we drink & health of our children pic.twitter.com/yFv0Pg81iX

— Kathleen Wynne (@Kathleen_Wynne) April 13, 2015

Under a cap-and-trade system businesses will have a greenhouse gas quota and will be able to sell credits to reward efficiency and innovation, Wynne said. Companies that want to burn more fossil fuels can buy carbon credits from those that burn less than they are allowed. Money raised through the system will be reinvested in green technology and green infrastructure, the premier said.

Right now companies are allowed to spew pollutants into the atmosphere for free, but everyone is paying the costs, Wynne said.

“Call it carbon pricing, cap and trade, a market mechanism or – I believe it’s misleading – but if you must, go ahead and call it a tax,” she said. “Most of us will not be fooled because for most of us the label is not important. What’s important is that we make progress.”

We’ve introduced cap & trade to limit greenhouse gas pollution, protect environment & grow our economy https://t.co/DUQyPUNg2U #ONclimate

— Kathleen Wynne (@Kathleen_Wynne) April 14, 2015

Climate change is already imposing costs on society, damaging crops and increasing insurance claims, Wynne said, warning the costs of not taking action will only get higher.

Related: Shifts in rainfall patterns due to climate change increase agricultural risk: UN report

Wynne heads to Quebec City later Monday to sign a cap-and-trade deal with Premier Philippe Couillard, and they will be joined Tuesday by other premiers and territorial leaders for a climate change summit.

Ontario’s announcement means 75 per cent of Canadians will now live in a province with some form of carbon pricing, Wynne said. British Columbia has a carbon tax that includes a seven-cent-a-litre levy on gasoline.

Alberta’s version of carbon pricing targets large industrial emitters, requiring them to reduce their carbon intensity by 12 per cent relative to their baseline level.

Federal Environment Minister Leona Aglukkaq sent letters to her provincial and territorial counterparts last week, urging them to send more information to bolster reduction targets that Ottawa has so far only estimated based on 2014 information.

At UN climate talks in Lima, Peru in December it was agreed that countries “ready to do so” would formally file pledges on cutting greenhouse gas emissions with the UN by the end of March.

Canada, along with Japan, Australia and China all failed to meet the deadline, although a spokesman for Aglukkaq said it was never a firm date. Critics have complained that Canada is lagging behind other nations in defining targets for reducing greenhouse gas emissions beyond 2020.

Ontario Environment Minister Glen Murray has been critical of Ottawa’s approach, saying Canada needs a federal government that is willing to work with provinces and territories, not simply providing a tally of provincial initiatives.

Ontario’s Premier Wynne announces province-wide cap and trade system. A monumental step for #ClimateAction: http://t.co/1KnGKzQ3rz

— Al Gore (@algore) April 13, 2015

Congratulations to Ontario for cap and trade system to limit greenhouse gas emissions http://t.co/yKPZHWmclu @Kathleen_Wynne @Glen4ONT

— Christiana Figueres (@CFigueres) April 13, 2015