Main reasons why the CP…

Main reasons why the CP should not scrap cap and trade

1. Climate change is a major threat to life on this planet and we have run out of time.

2. Economists agree that carbon pricing is the most cost-effective way to fight climate change.

3. The cap-and-trade system of which Ontario was a part, along with California and Quebec, is highly regarded by experts, and was working alongside other climate policies to reduce emissions.

4. Dismantling the carbon market is not going to be easy or cheap - Companies are able to purchase allowances, or permits, that offset the pollution they expect to emit over a given period. If a company emits less than the expected amount, they can sell their allowances to other companies that emitted more. The carbon market has issued billions of dollars in allowances. If it were unilaterally shut down, the business owners who bought those allowances (also known as permits) would likely demand compensation.

5. Ontarians will lose a lot - mainly the programs funded by revenue from the market. More than $2 billion from carbon auctions has gone into the province’s emissions-reduction programs (i.e. the electric vehicle incentive program, and the GreenON fund). If these programs end with the dismantling of the cap-and-trade system, that will affect businesses such as Ecobee, an Ontario-based smart-thermostat start-up whose customers currently qualify for a $100 rebate on purchases.

6. Uncertainty regarding future carbon policies adds costs to businesses by complicating their planning. But the reversal of the system – especially if compensation is uncertain – also undermines trust in government, making investment in the province less appealing.

7. Coming down heavy on polluters (without relying on carbon pricing) implies using more intrusive regulations. That means policies that require specific technologies or impose emissions performance standards, sector-by-sector across the economy. While those regulations might not have a visible carbon price, they will impose costs on businesses. Those businesses will pass on those costs to consumers. And on a per-tonne basis, those costs will be higher than the costs of a carbon price that drives equivalent emission reductions.

8. Before cap and trade can be scrapped a detailed alternative with clearly established targets based on realistic criteria must be presented to Ontarians.