I agree with the scientists…

I agree with the scientists who warn that climate change is one of the greatest global crises of our era, and that it threatens lives, livelihoods and economic stability.

Reports prepared for the World Bank advise that, unless political entities take immediate and effective action, climate change will dangerously compromise agriculture, water resources, ecosystems and human health, and that we may expect an increase in widespread food shortages, unprecedented heat-waves, and more intense storms.

Ontario will not be isolated from these adverse effects. Based on global estimates from U.S. Council of Economic Advisors, it is estimated that stabilising global warming at 3 Celsius degrees instead of 2 Celsius degrees will decrease Ontario’s GDP by $7.5 billion.

A carbon -pricing scheme that imposes sufficiently high prices, and affects a broad enough swath of the economy, could make a significant difference to climate-change. I doubt that the current cap and trade scheme set out in the Climate Change Mitigation and Low-carbon Economy Act, 2016 (“CCMLCEA”) can meaningfully curb greenhouse gas emissions (“GGE”), because it sets carbon prices that are far too low and too narrowly applied.

Carbon must be priced high as necessary to produce significant emission reductions. Otherwise, alternative carbon-cutting measures must be adopted in order to produce GGE reductions as quickly as possible.

The proposed Cap and Trade Cancellation Act, 2018 repeals CCMLCEA and requires the Minister of Environment, Conservation and Parks to prepare a new climate change plan.

In my opinion, any new climate change plan must:

• Advance methods to capture and store carbon from fossil fuel consumption, including through direct financial support for development of CCS technology;

• Support production and distribution of renewable energy and increase its availability and accessibility to Ontarians;

• Minimise consumption of oil for transportation by increasing the price of gasoline and diesel fuel;

• Create and enforce regulations to improve energy efficiency of vehicles, buildings and appliances; and,

• Protecting forests and agricultural areas (approximately $25 million): This money would have helped to plant millions of trees and enhance soil health, which are crucial if we want a functioning ecosystem and a vibrant farming sector.

An effective climate change plan must be developed and implemented immediately. Ontario cannot afford to wait for strong action to mitigate climate change. Accordingly, the proposed legislation must be amended to address the following deficiencies:

Section 3 Targets

Section 3 of the proposed legislation fails in the following particulars.

1. Fails to impose a deadline for establishment of GGE reduction targets.

2. Fails to commit to targets designed to limit emissions to levels determined by scientific evidence to effectively prevent global warming greater than 1.5 Celsius degrees.

3. Ontario’s current targets are designed to reduce GGE to 80% below 1990 levels by 2050. Bill 4 fails to require that any new targets must be at least as effective as current targets, and that Ontario must mitigate the effects of the climate crises to conform with Canada’s international commitment to limit global warming to 1.5 C degrees.

4. Fails to specify that, while the government may “revise the targets from time to time,” it shall not adjust the targets to allow for increased GGE.

5. Fails to provide for public comment or consultation on the proposed targets or on any proposed revisions to them.

6. Fails to identify any source of science-based expert opinion which the government is required to consult when developing targets.

7. Fails to stipulate that firm targets must be established before a new climate change plan can be developed with the object of meeting those targets.

Section 4 Climate Change Plan

8. Fails to impose a deadline for preparation of a climate change plan.

9. Fails to stipulate that a climate change plan shall be binding on the government.

10. Fails to require the Minister to appoint advisory panels and to appoint to such panels scientists with appropriate climate-science (and related) expertise, rather than representatives of the industry or finance communities.

11. Fails to identify the immediate need for reduction emission programmes, and the obligation of government to implement science-based programmes as soon as possible.

12. Fails to provide for public consultation through ERO before approval of any new climate change plan.

13. Fails to state that the sole purpose of any climate change plan must be to mitigate climate change by reducing GGE, and at a minimum, to meet established targets.

14. Fails to require that any new climate change plan must introduce firm action to address all Ontario sources of GGE including, but not limited to, transportation, industry, power generation, agriculture, and commercial and residential buildings.

15. Fails to identify energy conservation and stringent energy-efficiency requirements as crucial components of a new climate change plan.

16. Fails to assert that the government shall fully implement its new climate change plan, enforcing all requirements and providing all programmes under such a plan, regardless of whether or not the federal government successfully imposes a carbon pricing scheme in all provinces including Ontario.

17. Fails to explicitly permit the Minister to incorporate carbon pricing into a new climate change plan, should the Minister determine that carbon pricing is an important component of the province’s strategy to reduce GGE.

Section 5 Minister’s Progress Reports

18. Fails to impose a schedule for the publication of regular progress reports.

Section 8 Compensation to participant

19. Fails to allocate resources and to identify the source of funds designated for dealing with Ontario’s financial liabilities stemming from the enactment of Bill 4.

The proposed legislation should explicitly provide that repeal of CCMLCEA (cap and trade) does not preclude the use, under a new climate change plan, of financial instruments such as fuel taxes, elimination of fossil fuel subsidies, payments for emission reductions, reeducing the cost of renewable energy, etc.

A new climate change plan must state unequivocally that Ontario shall defer to any municipality that develops a climate change plan with targets for greater GGE reductions than the minimums set out in Ontario’s new climate change plan and/or with measures that result in greater GGE reductions.

One final concern:
Under the new Act, subject to certain exclusions, the Crown will pay compensation to participants for each cap and trade instrument cancelled (in surplus) unless they were distributed free of charge or were assigned a vintage year of 2021. The amount of compensation per eligible cap and trade instrument is to be determined in a future regulation. The new Act provides that no person is entitled to compensation for any loss of revenues or loss of profits directly or indirectly resulting from the wind-down of the cap and trade program.

The Ontario Government suggested that it expected to spend up to $5 million in compensation. Although several participants are precluded from compensation, this sum still appears unrealistically modest.

Bill 4 prohibits proceedings against the Crown. However, Ontario businesses and non-governmental organisations committed significant resources to their participation in the Ontario cap and trade program. Given that only very limited scenarios are eligible for compensation under the proposed legislation, leading legal professionals warn that the Ontario Government remains at risk of being sued by both emitters and stakeholders.