In January, Ontario – where 40% of Canada’s population lives – said it would price carbon, but had to decide on whether to implement cap-and-trade or a carbon tax.
They have decided to go with cap-and-trade, and will link their system with the Western Climate Initiative, which consists of California and Quebec. That would create a carbon market that covers 61 million people and 60% of Canada’s population, says the Globe and Mail.
After being approved by Ontario’s cabinet, the details would be ironed out over the next few months, but there is widespread support for the proposal. The program would raise between $1 billion to $2 billion a year and would fund climate-related infrastructure, such as building retrofits and public transit, according to Globe and Mail.
Last year, Ontario closed its last coal-fired power plant and in doing so, cut emissions to 6% below 1990 levels.
Ontario’s goals: Reduce emissions 15% below 1990 levels by 2020, and 80% by 2050; and increase renewable energy to 50% of electricity by 2025.
While Quebec joined California in the Western Climate Initiative, British Columbia has been making good progress with its carbon tax.
Alberta has a hybrid system, where polluters can emit 100,000 tons for free but after that they pay up to $15 per ton. That works out to about $1.80 per ton of carbon, in contrast to British Columbia’s $30 per ton carbon tax.
Pricing carbon is moving inexorably across the world. Around 40 national and 20 sub-national jurisdictions have implemented or are planning emissions trading or taxes – representing 22% of global emissions.
Read our article, Almost All of Canada Will Soon Price Carbon.