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

1103 WordsOct 15, 20175 Pages
The government sets an industry-wide limit to carbon production. Corporations that produce more than the set carbon limit are able to buy allowances from corporations who produce below the allowed amount. This creates a market for carbon so that companies can actually make money by reducing their carbon output. As time progresses, the government will incrementally lower the cap, which will reduce the number of allowances issued and increase their price. Ontario's Climate Change Mitigation and Low-carbon Economy Act, 2016 (the "Climate Act"), creates a cap-and-trade system that covers 82 percent of Ontario's direct emissions. This system covers all fossil fuels (e.g., gasoline, diesel and natural gas) used in Ontario by individuals,…show more content…
For example, the government claimed that using Greenhouse Gas Reduction Account funds to subsidize electricity prices would produce 3 Mt in emission reductions. We found no evidence to support this claim and concluded that subsidizing electricity rates is not an acceptable use of these funds. Fortunately, the government is no longer proposing to divert Greenhouse Gas Reduction Account funds in this way. The EU ETS was officially launched in 2005. It was the first and largest market-based regulation mechanism to reduce GHG emissions and can be considered the “flagship” policy of the European Commission (EC) in its fight against climate change. To date, it operates in the 28 member states of the EU, plus Lichtenstein, Norway, and Iceland. The main principle of the EU ETS is “cap and trade”, where cap refers to an EU-wide cap for GHG emissions set by the EC that is progressively reduced each monitoring period. Companies under the cap are required to cover their emissions with EU emission allowances (EUAs), which are handed out free of charge or auctioned. EUAs, however, can be traded among facilities or countries enabling those that run short of allowances to purchase additional EUAs and so avoid penalization in the event of non-submission. More specifically, installations subject to the policy have to surrender one allowance for every ton of CO2 that they emit; otherwise,

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