This fall Ontario is expected to release more details of its plan to cut carbon emissions. The plan’s centrepiece is a cap-and-trade system, which will put a limit on carbon emissions (the cap) and create a market where permits to emit carbon under the cap can be bought, sold and traded.

As we’ve said before, Ontario needs to take a comprehensive approach to reducing emissions if it hopes to hit its 2020, 2030 and 2050 targets. Cap-and-trade can’t do it all. But the cap-and-trade program is important and the design matters, a lot. (You can help: Tell Ontario to support climate action and a clean economy.)

A robust system will help reduce emissions cost-effectively and help put Ontario on track to meet its climate targets. A poorly designed system, however, could give Ontarians the impression that action is being taken when, in fact, the system does little to help meet Ontario’s climate challenge.

The Clean Economy Alliance, a collaborative effort of prominent Ontario businesses, industry associations, labour unions, agricultural groups, health charities and environmental organizations, has been working to find consensus on several aspects of cap-and-trade design.

The Alliance convened a series of workshops that brought in experts on cap-and-trade from California, Quebec, and the European Union.  At the workshops, participants shared perspectives, learned from one another, and agreed on a set of six principles to guide Ontario’s cap-and-trade program.

The Alliance translated those principles into design recommendations for what its members believe would be an effective, predictable, stringent, fair and transparent system, summarized in this report,  released today.

Among other things, the Alliance recommends that:

  • The program covers the vast majority of global warming emissions in Ontario
  • The cap should decline on schedule to meet Ontario’s 2020 and 2030 climate targets
  • The price of carbon permits must increase predictably over time
  • The program needs to hold any offsets to a high standard
  • Proceeds from the cap-and-trade program should be handled transparently and be directed toward things like renewable energy, energy efficiency, or electric cars that can further reduce emissions, with attention paid to low-income and marginalized communities

The Alliance also suggested that Ontario link its system with California’s and Quebec’s. This will make cutting carbon emissions more cost-effective, give Ontario businesses more flexibility, and advance the development of a North American carbon market.

Believe me, it’s not easy to find consensus between 85 diverse organizations. But the fact we have been able to do so with this study and the members of the Clean Economy Alliance shows how broad support for tackling climate change is in Ontario. It also shows that many people are devoted to engaging in this discussion to help ensure the province gets it right.

Find out more about the design of Ontario’s cap-and-trade program. Check out the Clean Economy Alliance report.

And make your voice heard! Tell Ontario that revenue from carbon pricing must pay for climate action.