Ontario Signs On to Western Climate Initiative Cap-and-Trade Plan

Ontario’s climate plan cleared an important milestone in New York City last week, as Premier Kathleen Wynne officially signed on to the Western Climate Initiative (WCI) cap-and-trade market.

“This linkage announcement provides a concrete example of how motivated governments can work together and accomplish more through partnership than they could apart,” the U.S. Environmental Defense Fund declared in a blog post. “The announcement came after an inspiring Climate Week in New York where states, businesses, and individuals showed that despite Washington, DC going backwards, the U.S. will continue to make progress on our commitment to help avert catastrophic climate change.”

The agreement allows Ontario, Quebec, and California to use carbon allowances from each other’s jurisdictions, or to hold joint carbon auctions, giving all three the added “liquidity” of a larger market and enabling them to share administrative costs, EDF notes.

“A larger market can also provide access to lower-cost reduction opportunities, which lower the overall cost of compliance for the whole market, allowing governments to maintain and strengthen the ambition of their commitments,” the organization states. And “the less tangible benefits of having partners that are equally committed to addressing the challenge of climate change can’t be ignored. California may not have a willing climate partner in Washington, DC, but the state is finding the partners it needs in Quebec and Ontario, and together they can prove that cap-and-trade provides an effective model for international collaboration.”

EDF sees the “carbon club model” as a “powerful potential driver of climate action,” writes Senior Attorney Erica Morehouse, and “several Canadian provinces are actively developing cap-and-trade programs that could link with WCI one day.” California may also soon see itself working with Oregon, Mexico, Colombia, Chile, and Peru, depending on program development that is currently under way.