Climate change represents one of the most urgent issues of our time. To help mitigate climate change, Ontario is proposing to implement the Climate Change Mitigation and Low-Carbon Economy Act, 2016 (the Bill). The Bill intends to establish a long-term framework for climate action. It would provide a strong foundation for Ontario’s cap and trade program, and require regular action plans that set out actions under a regulatory scheme designed to modify behaviour that will enable Ontario to achieve its targets for the reduction of greenhouse gas.
By taking action now, Ontario’s households and communities, infrastructure, agricultural resources, natural areas and ecosystems, including the Great Lakes and the boreal forest, will be better protected for the benefit and enjoyment of all. Ontario will also be well positioned to take advantage of the low-carbon economy through local job creation, an expanding low carbon technology sector and other global economic opportunities.
All Ontarians have a role to play in addressing climate change, including understanding how Ontarians contribute to greenhouse gas emissions and changing their behaviour to reduce those emissions.
The Government of Ontario believes that the public interest requires a broad effort to reduce greenhouse gas and to build a cleaner and more prosperous Province. The Government intends to involve and engage individuals, businesses, communities, municipalities, non-governmental organizations and First Nation and Métis communities in the ultimate goal of fostering a high productivity, low-carbon economy and society in Ontario.
First Nation and Métis communities have a special relationship with the environment and are deeply connected spiritually and culturally to the land, water, air and animals. They may offer their traditional ecological knowledge as the Government of Ontario develops specific actions.
The Government of Ontario cannot address this challenge alone. As a leading sub-national jurisdiction, Ontario intends to participate in the international response to reduce greenhouse gas by establishing a carbon price. Through the cap and trade program, this Act establishes a broad carbon price that is intended to change the behaviour of everyone across the Province, including spurring low-carbon innovation. A cap and trade program in Ontario will allow Ontario to link to other regional cap and trade markets.
In addition to the carbon price signal and to further support the reduction of greenhouse gas, the Government of Ontario intends to pursue complementary actions that will support and promote the transition to a low-carbon economy.
Enabled and supported by the cap and trade program and these actions, the Government of Ontario envisions, by 2050, a thriving society generating fewer or zero greenhouse gas emissions. Businesses and innovators will be creating world-leading low-carbon technologies and products that drive new economic growth, productivity and job creation. Ontarians will live, work and travel in sustainable ways in healthier and more liveable communities.
Ontario has met with over 700 stakeholders on cap and trade, including industries, associations, environmental organizations, and labour groups. The Government will continue to involve and engage individuals, businesses, communities, municipalities, non-governmental organizations and First Nation and Métis communities in the ultimate goal of fostering a high-productivity low-carbon economy and society in Ontario.
With this proposed Bill, Ontario will reduce its reduce greenhouse gas pollution and invest proceeds from cap and trade to benefit Ontario’s families and businesses, through activities such as energy retrofits to help households and businesses use less fuel and electricity ..
Recognizing the critical environmental and economic challenge of climate change that is facing the global community, the purpose of this Act is to create a regulatory scheme,
(a) to reduce greenhouse gas in order to respond to climate change, to protect the environment and to assist Ontarians to transition to a low-carbon economy; and
(b) to enable Ontario to collaborate and coordinate its actions with similar actions in other jurisdictions in order to ensure the efficacy of its regulatory scheme in the context of a broader international effort to respond to climate change.
Another important objective of the Act is to provide transparency. To ensure transparency, the proposed legislation would establish a new Greenhouse Gas Reduction Account that would direct cap and trade proceeds into projects to reduce or support the reduction of greenhouse gas emission. An annual public report would show funds tracked in and out of the Greenhouse Gas Reduction Account, and a description of funded initiatives and their alignment with climate change action plans. Decisions about the selection of projects for funding support will be informed by an evaluation of all proposed projects by the Minister of the Environment and Climate Change. The proposed Act sets outs specific initiatives that may be funded including those relating to energy use, land use and buildings, infrastructure, transportation, industry, agriculture and forestry, waste management, education and training, and research and innovation.
The Bill outlines provisions under two main areas:
- Emissions reduction targets and action plans, and
- The cap and trade program and use of proceeds.
1. Emissions reduction targets and action plans
The Bill, if passed, will:
- Establish greenhouse gas emissions targets in a statute for 2020, 2030 and 2050. It will also provide the ability, through a regulation, to make the targets more stringent and establish additional interim targets.
- Embed government action and accountability in a statute to ensure participants and the public are fully informed through the development of an action plan. This climate change action plan will enable the achievement of Ontario’s greenhouse gas reduction targets. There will be public progress reports on the status of actions and a review of the plan at least every five years.
- The Bill also prescribes content that must be included in each action plan including:
-timetable for implementing each action;
-estimated reduction in greenhouse gas resulting from each action;
-assessment of the cost per tonne of the potential reduction in greenhouse gas;
-if an action could be funded, in whole or in part, from cap and trade program proceeds, the estimated amount of any such funding that may be considered.
2. Cap and Trade Program and use of Proceeds
Regarding the cap and trade program, the bill, if passed would:
- Establish Ontario’s cap and trade program as well as the enabling regulatory framework for its implementation as a regulatory charge. Provisions in the Bill include requirements for greenhouse gas emissions quantification and calculation, reporting and verification, the submission of allowances and credits to match greenhouse gas emissions The Bill will also provide for the creation and distribution of allowances and credits, trading in these; the establishment of an offset program; trading and fees.
- Create a robust cap and trade program with strong compliance and enforcement powers along with rules that will ensure there is proper oversight of the market such as strict know-your-customer registration requirements and purchase and holding limits to prevent market manipulation.
- Allow for agreements to link Ontario’s cap and trade program with programs in other jurisdictions.
The Ontario Government is seeking input on this Bill, with the exception of Ontario’s GHG targets which have been in place for several years.
This proposal was posted for a 30 day public review and comment period starting February 24, 2016. Comments were to be received by March 25, 2016.
All comments received during the comment period are being considered as part of the decision-making process by the Ministry.
Please Note: All comments and submissions received have become part of the public record.