The Ontario Chamber of Commerce has urged the provincial government to delay the start of its cap-and-trade system until Jan. 2018 as businesses await forecasts of the programme’s economic impacts.
Ontario plans to launch the emissions trading scheme on Jan. 1, 2017, but a letter to be sent to the government today by the business association calls for the market’s start to be pushed back by 12 months.
“The purpose for our calling for us to slow down before we hurry up here is to make sure we understand fully the unintended consequence or at least the cost-benefit analysis, and that … we answer some of the questions that remain outstanding from the business community,” Chamber CEO and President Allan O’Dette said, according to the Canadian Press.
“We are supportive of this climate change initiative, we just need to be mindful of what it’s going to actually take to implement.”
But an advisor to Ontario Environment and Climate Change Minister Glen Murray told Carbon Pulse that the province intends to meet its current timelines surrounding the scheme’s implementation.
Murray told the Canadian Press that businesses don’t want the market to be delayed.
“They’re saying ‘get out there and get this done,’ because everyone knows that the people who wait five, 10, 15 years to get into carbon pricing are going to come in at the end when the carbon price is very high,” Murray said Wednesday.
“We want to do this early, so that while it’s C$16, C$17, C$18 a tonne, it’s very affordable for businesses to make that transition.”
The government is expected to release an economic impact analysis at the same time that it publishes further details surrounding Ontario’s carbon market, which will link to similar schemes in Quebec and California under the WCI programme.
However, there are still uncertainties as to how the auction revenues will be managed and spent.
Analysts at ICF International last month estimated allowances in the Ontario scheme would cost around C$16 early on, but then rise to around C$95 by 2030.
Under proposed rules, the province’s manufacturers will get all their allowances for free until 2020 in a bid to avoid carbon leakage.
Meanwhile, Minister Murray last week told Carbon Pulse he’s optimistic that neighbouring province Manitoba will proceed with its plan to launch a carbon market despite a change in government.
The right-wing Progressive Conservative (PC) party came to power last month in a landslide election victory that ended the previous NDP government’s 17-year rule and cast uncertainty over its plans to introduce a cap-and-trade scheme.
“We were well advanced in discussions with them, and I’m optimistic that these conversations will continue [under the Tories], and that Manitoba will be strong partner,” Murray said.
It’s still unclear where new Manitoba Premier Brian Pallister stands on the proposal but in the PC campaign platform during the recent election, the party pledged to “work with the federal government and other jurisdictions to develop a made-in-Manitoba climate action plan” involving carbon pricing.
“There’s a natural affinity in Manitoba towards the environment, so I wasn’t surprised that the Conservatives had it in their platform,” Murray said.
The Manitoba Tories also promised to boost efforts to cut CO2 from commercial buildings, enhance fuel efficiency in vehicles, and increase carbon sequestration through land-use changes.
Under the NDP’s plan, the Manitoba emission trading scheme had no official start date, but observers forecast a 2018 launch.
Analysts expected the market to link to WCI and to cover around 13 million tonnes of emissions from all major emitting sectors except waste and agriculture, regulating roughly 60% of the prairie province’s total GHG output.
Former Premier Greg Selinger, who resigned as the province’s NDP leader following his party’s crushing defeat, announced the ETS late last year as a tool to help Manitoba reach a new target of cutting GHG emissions by a third below 2005 levels by 2030.
Minister Murray also said that details were imminent regarding a collaboration between Ontario and Quebec over harmonising trading rules and developing common offset protocols.
The two provinces late last year issued a request for proposals to develop a suite of new offset protocols, seeking three by the end of April and a further 10 before year’s end.
Murray said the results of the RFP will be published soon. If approved, they will extend the number of methodologies beyond Quebec’s existing three.
The minister has previously said the first areas of focus under the partnership could be agriculture, forestry and other land-use based activities, but last week also emphasised that other protocols should be developed for the provinces’ manufacturing industries.
By Stian Reklev and Mike Szabo – firstname.lastname@example.org