Ontario is working actively with other North American jurisdictions to pursue a common approach to cap-and-trade. In July 2008, Ontario joined the Western Climate Initiative – a group made up of seven western states and Quebec, British Columbia and Manitoba. In June 2008, Ontario signed a Memorandum of Understanding with Quebec to collaborate on a regional cap-and-trade system for greenhouse gases. Ontario is also a member of The Climate Registry, participates as an observer in other greenhouse gas cap-and-trade initiatives, and is exploring opportunities for further cooperation with the federal government to develop a cap-and-trade program that reflects Ontario’s priorities and is aligned with other systems to provide broad access to trading.
Cap-and-trade is a flexible, market-based mechanism that can be used to reduce greenhouse gases and facilitate the transition to a low carbon economy by encouraging technological innovation, economic growth and job creation. In a cap-and-trade system, government sets limits that gradually reduce the total amount of greenhouse gases that can be emitted from regulated facilities. Companies that reduce their emissions below these limits may have “surplus” allowances they can sell or bank for future use.
The Ministry will continue to work with stakeholders and the public to develop a greenhouse gas cap-and-trade system and all interested parties are welcome to provide comments.
For more information on cap-and-trade, and what Ontario is doing, please visit the Ministry of the Environment’s cap-and-trade website.