The Ontario government's decision to put a price on carbon emissions in the form of a cap-and-trade system is a positive step in the fight against climate change that will help create a market for clean energy solutions. Combined with B.C.'s provincial carbon tax and Alberta's rules for large emitters, the announcement means that 86 per cent of Canadians and 86 per cent of national GDP could soon be subject to carbon pricing.
"Putting a price on carbon pollution is one of the most powerful government incentives to encourage companies and communities to pollute less," said Ian Bruce, science and policy manager for the David Suzuki Foundation. "Quebec and Ontario's collaboration on pricing carbon emissions is a step toward real clean energy choices. We've seen evidence from around the world that these incentives work."
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Leading global organizations, including the World Bank, World Economic Forum, Intergovernmental Panel on Climate Change and Organization for Economic Cooperation and Development, agree that a price on carbon pollution though a carbon tax or regulatory cap-and-trade system is a critical part of an effective plan to address climate change.
Carbon pricing has also proven to be an effective strategy for economic performance elsewhere in Canada. When the B.C. government introduced the carbon tax in 2008 it laid out a path to fight climate change while continuing to stimulate a prosperous economy. From the tax's introduction to the end of 2012, B.C.'s consumption of fossil fuels covered by the carbon tax decreased by 19 per cent per capita compared to the rest of the country, according to Sustainable Prosperity. Meanwhile, B.C.'s economy outperformed most of Canada and attracted twice the national rate of investment in clean energy.
"This is an important day for climate policy in North America. By joining U.S. states and Canadian provinces that promote clean energy by pricing carbon pollution, Ontario is sending a powerful signal to other jurisdictions that a wait and see approach to climate action is no longer an option," said Karel Mayrand, David Suzuki Foundation's director general for Quebec.
"Climate change is already affecting communities around the world," said Faisal Moola, David Suzuki Foundation director general for Ontario and Northern Canada. "Our future will be shaped by the choices we make today, and a price on carbon pollution in Ontario is a big step in the right direction."
Following the phase-out of coal-powered electricity in the province last year, a cap-and-trade program will be a strong tool to help Ontario reach its goal of a 15 per cent reduction in emissions below 1990 levels by 2020, provided it is well designed.
The David Suzuki Foundation is a member of Ontario's Clean Economy Alliance, which has put forward these principles: http://cleaneconomyalliance.ca/#section2