Ontario edges towards cap and trade

The Canadian province of Ontario has passed legislation that will allow it to set up a cap-and-trade scheme that could link up with others already established in North America.


The Environmental Protection Amendment Act (Greenhouse Gas Emissions Trading) provides the foundation for Ontario’s cap-and-trade programme.

Crucially, the act allows Ontario’s programme to link to other systems in North America and abroad.

Aligned systems would maximise trading opportunities for industry, helping them to make GHG reductions at lowest cost.

A cap-and-trade system uses market forces to help industry reduce GHG emissions. It is an effective way to reduce the threat of climate change caused by carbon emissions.

Cap and trade is also expected to boost the production of low-carbon processes and green technology, creating new jobs and business opportunities.

John Gerretsen, Ontario’s Minister of the Environment, said: “Cap and trade will play an extremely important role in our future.

“It will help industrial emitters reduce their greenhouse gas emissions, generate many new jobs and opportunities for Ontarians, and improve our environment for generations to come.”

Ontario has set itself emissions targets in its Climate Change Action Plan and currently aims to cut greenhouse gases by six per cent from 1990 levels by 2014, and 15% by 2020.

North America has a number of cap and trade schemes in the offing, but all are at early stages.

The most mature is the Regional Greenhouse Gas Initiative which links nine states in the north east of the USA.

Ontario is part of the Western Climate Initiative which sees states on the USA’s western seaboard and four Canadian provinces join forces but has yet to deliver on its intentions of setting up an active international cap and trade scheme.

Sam Bond

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