The Impact Of Ontario's Climate Change Mitigation And Low Carbon Economy Act

Stewart Elgie, a University of Ottawa law and economics professor and chair of the green economy think-tank Sustainable Prosperity suggests that British Columbia’s per-capita fuel usage had fallen more than 4 per cent compared with the rest of Canada and its economy (Ebner, McCarthy, 2011) Evidently it is reducing the amount of green house gasses emitted by fossil fuel use. However this is not the concern many had with the introduction of the tax, but the concerns were focused upon the externalities caused by this and the effects it would have on the economy. Three years since the carbon tax introduction and the Provincial level of GDP has remained approximately the same, (Greenery in Canada: We have a winner) With the provincial level of GDP remaining around the same, this suggests that at the very worst the carbon tax has had no negative effects to the provincial economy. Furthermore the tax also promised to remain carbon neutral and promised to cut corporate and private income tax. British Columbia has become the province with the lowest income tax regime and the lowest corporate tax regime (Greenery in Canada: We have a winner). Although the carbon tax is being praised by many, it still faces concerns as many still argue the ineffectiveness of the tax and what that means for the province.

The “Cap-and-Tax” program will be a mixture of carbon taxing and a cap-and-tax system. At the start of the year, the government will put a cap on the carbon emissions a company can produce for the year, then space can be auctioned around. Then, throughout the year, the government will tax the company on their emissions, but not as severely as a solely carbon tax system.

One way of obtaining individual caps is for the government to auction off emission permits that total the pre-set amount of emissions that it feels is optimal. Firms with higher costs of reducing emissions will bid higher than firms with lower cost structures. Again, the only problem is determining what the total amount of emissions should be reflecting all social costs and benefits of reducing carbon emissions.

Ontario has its own creative and effective strategies to combat climate change. One of Ontario’s goal is a low-carbon future. To accomplish this the province started making carbon reductions in 1990 and are on track to reduce carbon emissions by 15% in 2020, 37 per cent in 2030 and 80 per cent in 2050 (Climate Change Action Plan, 2017). Ontario’s target of reducing emissions by 6% was met on schedule in 2014 (Climate Change Action Plan, 2017). One of the reasons this has been made possible is because of Ontario’s investment in carbon reduction. For example, in 2015 Ontario committed $325-million payment to Ontario’s Green Investment Fund to support programs that help households and businesses implement

Electricity generation is Canada's fourth-largest source of greenhouse gas. When it comes to controlling the emission that comes from electricity generation; most provinces in Canada are already opting out of the coal phase to provide cleaner energy. The burning of firewood to create energy releases CO2 into the atmosphere thereby introducing more greenhouse gases into the atmosphere.therefore introducing approaches to electricity such as increasing the amount of electricity generated from renewable sources; connecting clean power with places that need it and modernising electrical system could bring Canada to its goal by at least 5% to 15%. New rules that help to control emissions from an electrical sector that is burning natural gases should also be implemented. the government Could also control greenhouse gas emission by mandating the carbon pricing policy. Carbon pricing charges industries and corporations that emit CO2 for their emissions. This limits their emissions by instituting a price charge and encourage companies and consumers from burning fossil fuel and find alternative ways that are efficient for their business. Carbon pricing has been known to be the best tool in reducing greenhouse gas emissions since most of the gases released into the atmosphere are carbon. Carbon pricing helps to fight climate change and it provides job opportunity in creating clean energy. the growing population is also a discussable topic in climate change that could be really hard to control due to the fact that as the population increases; the demand for products that release this toxic gases would also increase. The government could control this by finding alternative ways to produce these commodities without introducing so much carbon or methane into the

Canada is also known for dropping out of the Kyoto Protocol, which included 139 parties. Canada then switched to the Copenhagen Agreement. This agreement wants Canada to cut 17% of its emissions {Meyer,2009}. 4% of emissions have been saved since signing back in 2009. This plan will not work because Canada only reduced 4% of its GHG’s in four years, there is no detailed plan to fix the average 1% decrease by 2020 or the future {Wingrove, J 2015}. Another strategy created by the government is the carbon pricing mechanism. Alberta teamed up with the Climate Control and Emissions Management Act (CCEMA) and placed a tax for carbon emissions on all Canadian Oil companies {CSA Group, 2015}. The tax is $15 per tonne and the CCEMA expects and wants a 12% decrease of oil sands GHG’s each year {CSA Group, 2015}. Canada is an oil producing company and a change like this would need time but we can switch over to less GHG emitting mechanisms {Mansbridge, P 2015}. The CCEMA plan will not be very effective because Canada has done so little to follow its rules and be effective in the past, and now we are even deeper I trouble. If the oil sands didn’t pay much attention to rules of GHG’s before, who says they are going to change now?

The International Energy Agency’s (IEA’s) preliminary estimate of energy-related CO2 emissions in 2015 reveals that emissions stayed flat compared with the year before, whereas the global economy grew (3). The IEA noted that “There have been only four periods in the past 40 years in which CO2 emission levels were flat or fell compared with the previous year, with three of those—the early 1980s, 1992, and 2009—being associated with global economic weakness. By contrast, the recent halt in emissions growth comes in a period of economic growth.”

First we should understand how the carbon cap and trade system came about. The system of carbon cap trade used to be known as ‘emissions trading’, the alliance of free-market republicans and renegade environmentalists got the system adopted as national law in 1990 as a part of the Clean Air Act, to control the power-plant pollutants that cause acid rain, which is triggered by vast clouds of sulfur dioxide

In the long run this will assist in saving energy costs, improving productivity and global competitiveness, protecting jobs and creating more jobs. Ontario sets caps on the total emissions for 2017 to 2020 (cap in 2017 is set at 143,332,000). The objective of Ontario’s greenhouse gas reduction is to be 15% below 1990 levels by 2020, 37% below 1990 levels by 2030 and 80% below 1990 levels by 2050.

In managing the emissions of GHGs(Green House Gases), carbon taxes will be imposed mid 2012. "Economic theory anticipates that with the increased costs of emitting GHGs, drives emitters to downsize their activities." Salem Press (2009)

Greenhouse gas regulation (GHG) is one of the ways that eases climate change while keeping Canadian economy. They must consider mitigating greenhouse emission under the condition of rising energy production and greenhouse gas consistently (Tarnoczi & Driver, 2014). In addition, Canada is a third largest oil reserves, as well as ninth largest emitter in the world and approximately 25% of greenhouse gas is attributed to transportation (Figures, 2015). Therefore, the effort of people is needed for significant reduction. Canadian governments try to achieve it through the stringent regulation for the transportation and electricity sectors (N.A, 2015). However, advantage and disadvantage for both people and industry exist at least. Forum (2013) indicates

Therefore, cap-and-trade, a market-based mechanism, allowed a process for business to buy and sell the right to pollute (Lawrence & Weber, 2017) as the EPA, with the Clean Air Act of 1990, placed a national cap on emissions of sulfur and nitrogen oxides (Allen & Yago, 2011). Ultimately, the cap-and-trade system created incentives to explore ways to reduce sulfur dioxide emission by taking advantage of low-cost abatement options. Subsequently, if annual emissions exceeded the allowances allocated to that facility, the CEO may purchase allowances from another company or reduce emissions by installing pollution controls through the cap-and-trade program (Schmalensee & Stavins,

Cap and trade is usually the policy referred to when the literature uses the ambiguous phrase of ‘carbon pricing.’ While a carbon tax is functionally a pricing mechanism, the small quantity of available cases of implementation mean that cap and trade is the default mechanism for carbon pricing in the status quo. The primary benefit of the cap and trade approach is creating an almost infinitely scalable carbon market. Cap and trade accomplishes this by functioning simultaneously as a disincentive and an incentive. While exceeding the cap triggers a fine, registering under the cap allows for the difference in emissions to be auctioned off by the company. This means that companies always have an incentive not just to meet the cap, but to emit the least amount of pollutants possible to allow for more capital to trade in the carbon market, maximizing efficient distribution of emissions (Borghesi and Montini 2016).

Greenhouse gasses (GHGs) pose a serious threat to the environment through acting as a catalyst for substantial climate change. Carbon Dioxide (CO2), a specific greenhouse gas, is the one that is the most prominent in our atmosphere; this being the case it is also causing the most damage. Carbon dioxide is emitted primarily through the burning of fossil fuels, such as oil and coal. These fossil fuels are burned in power plants and create large amounts of emissions that are not ideal for the environment. When faced with a problem similar to this one, it is only rational to think that a particular solution should be implemented. In this case, the solution is a “carbon tax”. These carbon taxes would be directed towards the sources of greenhouse gas emissions. Recently, British Columbia, Canada enacted a carbon tax, it has some strengths and weaknesses, the due has an effect on the economy, it also needs to be at a certain rate, it has been successful and unsuccessful, the tax is also has aspects of being revenue neutral and revenue recycling.

Pollution, specifically global warming, is of growing concern to people and governments. It is a controversial issue whose validity is still being debated by scientists. The Kyoto Protocol is an international attempt to address global warming through emissions controls. Traditional neoclassical economic models do not incorporate pollution in rudimentary theories of supply, demand, or pricing, as a result, firms do not consider pollution as a cost of production, which leaves government regulation as the primary method for controlling these externalities. The goal of emissions trading is to allow one business, which can make greenhouse gas emission reductions for a relatively low cost, to sell