Ontario’s carbon cap and trade program should cover the largest possible share of the province’s emissions, apply to at least 85% of the economy, and include fuels as well as electricity from the day it opens, the Clean Economy Alliance advised this week.
“Ontario’s cap-and-trade program should be implemented by 2017 and the emissions cap should decline by approximately five megatonnes (MT) per year, on a clear and transparent schedule to provide businesses certainty,” the Alliance states. “The cap needs to decline commensurate with Ontario’s 2020 and 2030 targets” for greenhouse gas reductions.
The system should be linked with carbon markets in Quebec and California, include mechanisms to stabilize market prices, allow offsets for no more than 8% of an entity’s total compliance obligation, and those offsets “should be subject to high standards in terms of verification to show that they are additive and permanent.”
The CEA developed its design recommendations based on expert input and practical experience with other carbon markets. “Cap-and-trade can be an effective tool to help reduce emissions,” the Alliance concludes, “but it’s important that the system be designed well if it’s to live up to its promise.” (Disclosure: The Energy Mix’s parent company, Smarter Shift, is a member of the Clean Economy Alliance.)
