The Ontario government recently described, in a discussion paper, the core design principles for the province’s proposed cap-and-trade system, which may take effect as early as January 1, 2010, and is being designed to be compatible with the Western Climate Initiative (WCI), a regional cap-and-trade initiative of several U.S. states and Canadian provinces. The paper highlights various issues for discussion, including the province’s current plans to cap, at least in 2010–11, the greenhouse gas (GHG) emissions of certain industrial facilities or corporations that emit over 100,000 tonnes of carbon dioxide equivalents (a unit of GHG emissions) annually. The paper suggests this threshold may be lowered to 25,000 tonnes/year in subsequent years. Other discussion points include the province’s plans (i) to allow capped emitters to use offset credits (awarded for GHG reductions outside the capped sectors) to meet up to 49% of their compliance obligations; (ii) to auction, by 2012, at least 10% of the emissions allowances available to capped entities; and (iii) to issue credits for emitters that had taken early action to reduce their GHG emissions.  

The MOE is accepting comments on this discussion paper, titled “A Greenhouse Gas Cap-and-Trade System for Ontario,” for an unspecified time period.  

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