Cap-and-trade is a market-based system for managing and reducing industrial greenhouse gas (GHG) emissions. In a cap-and-trade system, government limits the amount of greenhouse gases they can emit. Companies that reduce their emissions below their limit have “surplus” allowances they can sell or bank for future use.
The Ontario government seeks input from a broad range of stakeholders to develop a greenhouse gas (GHG) cap-and-trade system. On December 10, 2008, the province launched a consultation process to inform the development of a cap-and-trade system as early as 2010 with the ultimate objective of integrating with other systems. Consultations will continue in 2009, with sector-specific consultations with industries that will be affected by the proposed cap-and-trade system.
To help guide this ongoing stakeholder consultation process, Ontario developed a Discussion Paper: A Greenhouse Gas Cap-and-Trade System for Ontario. This discussion paper was distributed to stakeholders on December 10, 2008 and is also available on the MOE website.
The purpose of this posting is to complement the ongoing stakeholder consultation process by ensuring the broadest range of stakeholder input on the design and development of a cap-and-trade system for Ontario to reduce greenhouse gas (GHG) emissions, as outlined in the attached discussion paper. We are seeking stakeholder comment to help the province develop a robust, but flexible cap-and-trade system – one that can be adapted to new developments in rapidly evolving emissions trading markets. The discussion paper describes cap-and-trade, and sets out the context and key design principles for an Ontario cap-and-trade system that can be integrated with other trading systems.