On Monday, Premier Kathleen Wynne announced that Ontario was moving to a cap and trade system of controlling carbon emissions. Although the details provided were scant, the basics of cap and trade are well known: the government puts a cap on the amount of pollution industries are allowed to emit, and then creates a market where companies can trade permits that basically gives them the “right” to pollute beyond the cap by trading with companies that pollute below the threshold.
It’s an interesting idea, but needs to be done correctly. The Environmental Defense Fund calls cap and trade the “most environmentally and economically sensible approach to controlling greenhouse gas emissions.” They argue, unlike a more direct, coercive method like a carbon tax, it actually puts a cap on emissions and offers companies incentives to innovate to lower costs.
Unfortunately, the record of the current provincial government on the environment has been mixed, to be charitable. The Green Energy Act was introduced in 2009 to create jobs, increase energy conservation and renewable energy sources, but ended up increasing energy costs by a fair amount and the jobs created were basically only temporary construction jobs. It remains to be seen whether the implementation of solar, wind and biomass energy in the province will work out. And nuclear power, though clean, remains extremely risky.
So the province’s Environment Minister, Glen Murray, said he would meet with business and community leaders, green groups and Aboriginal groups in order to craft a plan. The government has said it would invest any revenue it gains from the carbon tax in “green initiatives.” The Canadian Manufacturers and Exporters Association pointed out that some of these green initiatives should be directed towards industry in trying to make their plants more energy efficient, citing high energy prices in Ontario.
Everyone knows Ontario’s manufacturing sector, once the backbone of our nation, has gone through major changes over the past twenty years. As cheaper labour making low-quality products from abroad floods our market, our economy is in a major transition period to one of high-tech manufacturing. Our high energy prices are one of the major barriers to this, so let’s hope that cap and trade will not be another.
Clearly economic development is important, but so is environmental protection. While some still argue on whether or not climate change is real, the fact of the matter is the planet seems to be changing, and steps are required to avoid continued smoke belching into the atmosphere.
Nations like China, India and the United States (depending on the state) seem to be uninterested in reducing their carbon emissions, despite being the worst offenders. It therefore unfortunately falls to smaller states to reduce their carbon footprint.
Ontario is one of those states. Let’s hope that the government is able to square the proverbial circle and ensure that we are able to reduce our carbon footprint without adversely affecting people’s jobs.