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To facilitate the implementation of its cap and trade program, Ontario has introduced framework climate change legislation and a supporting cap and trade regulation. Ontario has also introduced a draft moecc cap and trade design options tree setting out the details of the cap and trade program, which will cover industries, institutions, electricity generators, and moecc cap and trade design options tree and distributors of heating fuels that emit 25, tonnes of GHG emissions per year or more, as well as suppliers and distributors moecc cap and trade design options tree transportation fuels that distribute litres of fuel per year or more.
The program would also cover entities that import electricity and fuels in to Ontario. To create a robust offset credit program in Ontario, a separate offsets regulation will be drafted under the climate change legislation later in Overview of Draft Cap and Trade Regulation In connection with the proposed cap and trade program, the Ministry of Environment and Climate Change MOECC has posted a regulatory proposal for a cap and trade regulationwhich includes an appendix presenting detailed technical information for the distribution of allowances to eligible capped emitters for the first compliance period, details related to early reduction credits, and an overview of complementary amendments for the reporting regulation and incorporated guideline to support implementation of the cap and trade program.
Ontario is planning to set a cap on emissions for each year of the first compliance period that will start in and last through ; the cap would be set based on the emissions that are forecast for each of those four years. The cap would translate into the total number of emissions allowances that would be made available for covered sectors through auctioning and free-of-charge allocation. Under the program, regulated emitters will be required to hold a sufficient number of allowances to cover their annual emissions.
Between andthe moecc cap and trade design options tree cap is expected to decline at a rate of 4. The heating and transportation fuel sector and industries will face cap declines. However, the sector-specific cap moecc cap and trade design options tree the electricity generation sector will remain unchanged from year to year in recognition of the emission reductions that the sector has already undertaken with the closure of coal-fired power plants.
In order to provide transitional support for emissions intensive and trade exposed industries, Ontario plans to allocate emissions allowances free of charge to a broad range of industries including cement, lime and steel. Ontario will review the allocation of moecc cap and trade design options tree at the end of the first compliance period in The government has also indicated that it will consider additional actions to prevent carbon leakage, including border carbon adjustments.
To facilitate compliance, covered sectors would also have the option of funding emissions reductions in non-covered sectors, such as agriculture, through the purchase of offset credits. The government will establish the criteria for creating offset credits that are real, permanent and quantifiable. Furthermore, emitters that have voluntarily taken early and verifiable action to reduce GHG emissions would be rewarded through one-time early reduction credits.
Smaller emitters with annual emissions of between 10, and 25, tonnes would have the choice of opting into the cap-and-trade program and have access to the free allocation of allowances. The cap and trade proposal has been posted for a 45 day public review and comments may be submitted to MOECC by April 10, Proposed changes will include:. As previously announced by the Ontario government, it will also be releasing a detailed five-year action plan in which will include specific commitments for the province to meet its emission reduction targets and establish the framework necessary for Ontario to meet its and emission reduction targets.
On December 7,Ontario, Quebec and Manitoba signed a memorandum of understanding at the Paris climate talks to formalize the moecc cap and trade design options tree of all three provinces to link their cap and trade systems.
Ontario is in the process of finalizing the details of its cap and trade program, which is expected to come online in The Ontario government has said that moecc cap and trade design options tree will release a detailed five-year action plan inwhich moecc cap and trade design options tree include specific commitments to meet near-term emissions reduction targets, and establish the framework necessary to meet targets for and As articulated in the strategy, bythe Ontario government envisions that its citizens will be using less energy and the energy they do use will be from low-carbon sources.
Communities will be climate-resilient, complete and compact. More people will choose electric or other zero-emission vehicles and transit to get swiftly and efficiently where they need to go.
Agricultural lands, natural areas and ecosystems will be better protected for the benefit and enjoyment of all. Bythe government sees a province that will be employing new ways to reduce waste while ensuring that more of the waste produced is reintroduced to the economy.
Industries will be thriving while generating fewer or zero emissions. Finally, businesses and innovators will be creating world-leading clean technologies and products that drive new economic growth, productivity, and job creation. The government will also report on, and renew, its action plan every five years. The proposed program details are not final and are subject to further consultation before a final cap-and-trade regulation is expected to be issued in spring It is anticipated that the cap-and-trade program will have a broad reach and most sectors of the economy will fall under the cap including heavy industry, transportation fuel including gasoline and natural gasand electricity generation.
Under the cap-and-trade program, these industries will still be required to reduce emissions in order to comply with their obligations under the cap, but their compliance costs would be lower. Consultations with industry and other stakeholders is ongoing, and as noted moecc cap and trade design options tree, it is anticipated that the details of the cap-and-trade program will be finalized in spring Ontario Environment Minister Glen Murray is expected to present the plan to cabinet for approval by mid-April Under a cap-and-trade system, a limit is placed on total greenhouse gas GHG emissions with the price of carbon being determined by the market.
Under the system envisioned by Ontario, the cap will be divided into permits, some of which will be given away to maintain competitiveness, particularly where a particular industry is trade sensitive while the remaining permits will be auctioned off.
Regulated emitters will be required to obtain a sufficient number of permits to cover their emissions and where emitters are moecc cap and trade design options tree to reduce emissions, they will be able to sell permits to those emitters who need more.
The auction proceeds will likely be directed into GHG moecc cap and trade design options tree reduction initiatives such as energy conservation retrofitting. However, cap-and-trade soon took a back seat to the recession and political uncertainty meant that there was little appetite for moving forward with climate change plans.
With Ontario Premier Kathleen Wynne taking a climate leadership role, there is new impetus for bold action on GHG reduction initiatives at the provincial level.
Ontario Premier Kathleen Wynne announced on January 14, that a carbon pricing plan is currently under consideration by the provincial government. This follows the signing of a Memorandum of Understanding Concerning Concerted Climate Change Actions by Ontario and Quebec in Novemberwhich includes a commitment by Ontario to explore the use of market-based mechanisms to curb emissions. To that end, Environment Minister Glen Murray is in the process of preparing a report on the various options to put a price on carbon, including the potential implementation of a carbon tax or a cap-and-trade system.
It is anticipated that more details will be released about the carbon pricing plan in spring The purpose of the paper available online: Although it does not explicitly advocate a cap-and-trade system, the paper does suggest that the MOE will consider the use of emissions trading mechanisms to establish a carbon price and provide businesses with options on how to achieve reductions at the lowest cost.
A one year window will provide time for the province to negotiate and finalize an equivalency agreement with the federal government to ensure there is a single regulator for greenhouse gas emissions in the province.
Ontario acknowledges that other North American jurisdictions are also taking action to address emissions of GHGs. It notes that Quebec, British Columbia, Alberta, Saskatchewan and Nova Scotia all have or are developing moecc cap and trade design options tree to reduce greenhouse gases.
The MOE will accept submissions on the discussion paper until April 21, For further information, please refer to the Environmental Registry: This decision comes after plans for a cap-and-trade system have been abandoned by the U. The five jurisdictions forging ahead are part of the WCI other group members, such as Utah and Arizona, have not committed to the system. On Tuesday July 27,the WCI released its comprehensive design strategy for more information on the design document, please see our overview: Each jurisdiction continues to weigh the pros and cons of moving ahead with the WCI system.
In BC, any industrial operation emitting more than 25, tonnes of greenhouse gas per year will be subject to the system. This threshold will capture 40 operations in the province. While the regulatory framework for a cap-and-trade program has been put in place under the Greenhouse Gas Reduction Cap and Trade Act and its associated Reporting Regulationthe details of the program as they will apply in BC have not yet been settled. On December 1, Ontario issued O. The Regulation, which applies to 26 types of facilities, requires the following: The delay of third party verification until the reporting year is intended to allow the required professional services capacity to grow in order to meet demand in the province.
The flexibility to use best alternative verification methods in is also intended to smooth the transition to standardized reporting requirements in With respect to biomass, the Regulation moecc cap and trade design options tree regulated emitters to deduct up to 15, tonnes of carbon dioxide generated from a facility through the combustion of biomass based on the theory that the combustion of biomass, which draws CO2 from the atmosphere as it grows, is carbon neutral.
The MOE has also issued a technical Guideline for Greenhouse Gas Emissions Reporting, which details standard quantification methods and best alternative quantification methods.
A copy of the Regulation is available in the Links on this site. Skip to content To facilitate the implementation of its cap and trade program, Ontario has introduced framework climate change legislation and a supporting cap and trade regulation.
Formally direct all cap and trade auction proceeds to a new Greenhouse Gas Reduction Account that would fund green projects to reduce emissions. Ensure transparency by requiring an annual public report on funds flowing in and out of the Greenhouse Gas Reduction Account, including a description moecc cap and trade design options tree funded initiatives and their alignment with climate change action plans. Provide a legal framework for the cap and trade program.
Provide a framework for reviewing and increasing targets, as well as establishing additional interim targets. Allow for transitional allowances to large industrial emitters which would be phased out over a period of time. Require the government to prepare and implement a climate change action plan for achieving these targets, with progress reports and a review of the plan at least every five years. Proposed changes will include: Requirements to report production and moecc cap and trade design options tree process related information; Provisions to allow facilities with emissions between 10, and 25, tonnes to opt-in; Clarifications on measurement requirements and reporting of biomass types; and Refinements to the Regulation and Guideline to facilitate implementation of the Cap and Trade Regulation.
Under the Climate Change Strategy, the government will: Introduce climate legislation to establish a long-term framework for action and make the cap-and-trade program law in Ontario. Integrate climate change mitigation and adaptation considerations into government decision-making and infrastructure planning. Introduce changes to government operations, procurement, employee training, building retrofits and in other areas to help moecc cap and trade design options tree move towards carbon neutrality.
Develop a coordinated approach to reduce emissions from new and existing buildings. Reduce emissions from transportation by promoting the moecc cap and trade design options tree of zero emission and plug-in hybrid vehicles.
Develop data and metrics to measure emission impacts of projects and programs including progress towards emission reduction targets. This will entail the development of tools to assess climate change risk to food production, human health, vital infrastructure, and the economy.
Simplicity, consistency, transparency and administrative efficiency. Striving to treat sectors and facilities equitably. Taking into account early action by industry leaders.
Using accurate and verified emissions data to support policy development. Promoting development and deployment of clean technologies. Considering broad alignment with other emissions reduction programs of similar rigour that provides opportunity for linking in the future.
Considering integration with other provincial environmental policies.