Ontario government passes legislation to cancel cap-and-trade |
A joint system already operating in California and Quebec sets a cap on emissions and hands out some permits to industry while auctioning off others. Proceeds are plowed into green programs, such as investments in public transit and infrastructure. The intention is to create a market large enough to trade carbon credits on the stock market. In California, credits are actually auctioned off to heavy emitters.
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In Ontario, large industrial emitters typically include steel, concrete and car manufacturers, oil and chemical facilities, pulp and paper mills, waste disposal facilities and brewing operations. Pricing typically reflects the monetary value of emissions and governments are implementing these programs to recoup some of the costs of climate change.
Why BC Isn't Rushing to 'Cap and Trade' Carbon
The Western Climate Initiative began in when the US states of Arizona, California, New Mexico, Oregon, and Washington agreed to collectively develop a regional target for reducing greenhouse gas emissions, and to design and implement a market-based program to achieve it. She recommends manufacturers invest in new machinery and equipment, and to take advantage of the recently extended federal Accelerated Capital Cost Allowance. Dittburner says there are also a number of government-run energy-efficiency programs available to manufacturers, for both larger and small-and-medium-sized businesses.
It provides cost-shared assistance services for ISO implementation pilots, energy management projects, process integration studies and computational fluid dynamics studies. Its business programs provide manufacturers and industrial users with retrofits, audit funding, process and systems analysis and small business lighting incentives. Carbon prices under this system have been fairly modest to date, and it is unclear how much the prices themselves have driven emissions reductions in the region.
But states have used the money raised by the auctions to invest in efficiency and clean energy programs.
California, meanwhile, has enacted its own cap-and-trade program that goes beyond power plants and also covers manufacturers, refineries, and other polluters. State officials are now struggling to tighten the cap so that it drives bigger cuts in future years. There are some signs that carbon pricing could expand further in the states. Virginia and New Jersey are making moves to join the Regional Greenhouse Gas Initiative, and several Northeastern states are planning a similar program for cars and trucks that would put a price on transportation fuels and invest in mass transit, electric buses or other low-carbon solutions.
Since , China has been experimenting with cap-and-trade programs in several pilot cities, including Shanghai and Shenzhen. The country plans to gradually roll out a nationwide cap-and-trade program starting in , with several years of testing before expanding to major sectors like electricity, steel and concrete.
If China manages to follow through, it will have created the largest carbon-pricing program in the world. But the government has not yet finalized key details, like how high it will set the overall emissions cap. Chinese officials have been talking with representatives from California and the European Union, trying to learn from their often-rocky experiences in designing cap-and-trade programs. Emissions fell nationwide under the program, but the policy faced a fierce political backlash from industry groups and voters.
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When the more conservative Liberal Party swept into power in , it quickly repealed the program. Australia currently has a far more lenient carbon pricing program in place, called the Safeguard Mechanism, in which large industrial polluters that exceed a pollution baseline can buy carbon credits to compensate. Australia is currently on track to miss its overall goals for cutting emissions.
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Carbon pricing could still make a comeback. Please upgrade your browser. For Immediate Release. April 3, Ministry of Environment.
In the spring of , British Columbia joined the Western Climate Initiative WCI , a multi-jurisdictional partnership launched in February to address climate change. The partnership, which includes seven U. It is anticipated that membership will grow over time with new partners joining from both the U. Those who can reduce emissions more efficiently are able to sell their surplus units to those who find it more challenging to do so.