The Doug Ford government in Ontario is introducing a carbon tax on large emitters that exceed a yet-to-be-established provincial standard, after launching a lawsuit against the federal floor price on carbon and deliberately gutting the province’s most affordable pathways to a sustainable economy.
Under a plan that is open for consultation until March 28, the province’s proposed “compliance units” will cost C$20 per tonne this year, rising to $50 per tonne by 2022, the Toronto Star reports. That’s a progression drawn from a pan-Canadian climate plan that Ford and his ministers used as a day-to-day foil in last year’s provincial election, and have happily scorned at every opportunity since.
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“This proposal raises an important question: Why is Ontario fighting a price on carbon one day, and proposing one the next?” said Sarah Buchanan, clean economy program manager at Environmental Defence. “What Ontario really needs is a system that is consistent and effective at reducing emissions, not months of posturing, legal battles, and uncertainty around which rules to follow.”
“The big question is why Ford is wasting tax dollars fighting the federal climate plan one day, and proposing a price on pollution for large emitters the next?” agreed provincial Green Party leader Mike Schreiner. “Could it be the Ford government is just covering its back because it knows it will lose the legal challenge against national climate action?”
The provincial announcement Tuesday “said payments collected from large emitters through the program would be placed in a fund that could be used by industry to support greenhouse gas reduction projects,” the Star states. “Ford has repeatedly said a carbon price would hurt the economy and generated controversy last month when he suggested the federal carbon tax would cause a recession. Opponents and economists called his claim baseless.” (Polling since showed the public wasn’t fooled, either.)
“The government can rail against carbon taxes and say how evil they are, but this is basically what they’re doing here,” trying to pre-empt federal action by imposing a minimum carbon price on industry, said Greenpeace Canada Senior Energy Strategist Keith Stewart. “They’re saying polluters are going to have to pay for a small portion of their emissions. They can get that money back to invest in greenhouse gas reductions measures, just like the federal program.”
Ford and his officials “know they’re going to lose” in their attempt to fight the federal plan in court, Stewart added, “so they’re basically bringing in their own version of the federal price to avoid having systems coming and going.”
The provincial release says the plan aims to “provide flexibility for Ontario circumstances as an alternative” to the federal floor price on carbon, National Observer reports.
On Twitter, environmental economist Dave Sawyer compared the proposal to Ontario’s previous cap-and-trade system, noting that both have “product-based benchmarks, historical grandfathering, and energy benchmarks,” and apply to the same sectors of the economy—just like the federal plan.
“Basically the same cap & trade system for large emitters but have added unwinding costs by scrapping cap-and-trade, increased business uncertainty to reduce (greenhouse gases),” and eliminated low-cost reductions available through the Western Climate Initiative, he tweeted.
But if equivalency with the pan-Canadian plan is what Ontario claims to be looking for, the plan may fall short, since it appears to call for intensity-based targets rather than real greenhouse gas reductions.
“It doesn’t appear as though the proposal is designed to reduce pollution in Canada’s most populous province,” Observer notes. “In fact, the long-awaited plan says that it is designed to allow pollution to grow by proposing a new industrial performance standard that would limit the growth in pollution, ‘rather than an absolute cap on emissions for the province.’ This would be done by setting pollution limits based on the level of output or production of facilities.”
The “flexible compliance mechanisms” in the new Ontario system “would allow industrial facilities to receive compliance units as an incentive for reducing their greenhouse gas emissions. The regulation would apply to all the sectors presently under the federal carbon tax, and may see the addition of institutions, greenhouse operators, and the thermal energy supply sector in 2020.”
Observer says the new plan is similar to the cap-and-trade system enacted by the previous Liberal government, and vilified by Ford and his team, to the extent that it rewards companies that reduce emissions and requires higher-polluting businesses to pay the price.
Schreiner said the province released the plan “after months of crying wolf in public about a carbon tax recession” and accused the government of “playing political games with climate action and misleading the people of Ontario” while creating uncertainties for business.
“The NDP favours an effective and transparent cap-and-trade market to reduce emissions and put the burden for change onto big polluters rather than everyday people,” said opposition energy and climate critic Peter Tabuns (NDP, Toronto-Danforth). “Since most of Ford’s plan replicates the federal carbon tax, it’s completely unclear now which of the two plans will go ahead—leading to even more uncertainty for people, business, and investors.”
The day after the release, Observer was out with a detailed explainer on the new provincial plan.
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