By Cathy Orlando
Today, Doug Ford will be sworn in as Premier of Ontario. His first action will be to dismantle the Ontario Cap and Trade program.
The devil will be in the details.
The PCs ran on a platform of making Ontario open for business and cutting taxes. There is no clearer way to do that than putting a transparent and predictably rising price on carbon pollution and then giving the revenue collected back to the people. This carbon pricing policy is called carbon fee and dividend.
Almost all economists (75% in one survey) believe that putting a price a price on carbon pollution is the most economically efficient way to reduce greenhouse gas emissions without harming the economy. Why? Because what industry wants and needs for long-term business planning is clarity of purpose to the future direction of climate policies.
Shell, Exxon Mobil and General Motors are founding members of the Climate Leadership Council (CLC) in the USA. The CLC promotes the immediate implementation of a $40 per tonne carbon fee that would be applied to fossil fuels that rises predictably and gives the fees collected back to the people: a.k.a. carbon fee and dividend.
The distinguished authors of the CLC’s Carbon Dividends Plan are James A. Baker, III, and George P. Shultz: statesmen under Republican presidents.
A June 2018 study found that their Carbon Dividends Plan would achieve more than triple the emissions reductions of all Obama-era climate regulations, and could exceed the high end of the U.S. Paris Commitment.
Lastly, the CLC’s Carbon Dividends Plan has a political action committee, Americans for Carbon Dividends, which is backed by oil and gas and thus lots of money.
As well, the Alliance for Market Solutions, a “dyed-in-the-wool, rock-ribbed Republicans group” aligned with businesses and financial institutions have also joined the movement to champion revenue-neutral carbon pricing in the USA.
Swinging back to Ontario: what are the impacts of axing Ontario's cap and trade policy?
Overall the impact is a huge disruption to Ontario business.
California and Quebec have closed the carbon market to Ontario, preventing companies from dumping some $2.8-billion in emissions allowances. Thus hospitals, universities, and businesses now have worthless allowances and lawsuits are on the horizon.
Premier-elect Ford said Ontario is open for business. Lack of policy persistence for climate change flies in the face of that statement.
The statistics are clear: unemployment shrunk and the GDP grew in Ontario under cap and trade. In fact all provinces with carbon pricing out-performed the rest of Canada in economic growth.
If he is true to his word he should give businesses a sufficient transition time to wind down cap and trade. The first compliance period ends December 2020. This a logical time to end the program.
Climate change is a serious and non-partisan issue. Long-term climate and economic stability will require policy persistence through multiple election cycles.
Some say that campaigning for the next election begins the day after you get elected. Premier-elect Ford said in his acceptance speech that he wanted to gain the confidence of those who did not support him – which would be about 60 per cent of the voters.
Carbon fee and dividend is a policy that has something for everyone. The polluter-pays principle will appeal to libertarians, the market-based solution will appeal to the conservative-minded and it benefits the poor and middle class financially which should appeal to all.
In conclusion, Mr. Ford should phase out cap and trade by 2021 while phasing in carbon fee and dividend.
Cathy Orlando is the international outreach manager and the Canadian director of the Citizens' Climate Lobby. She lives in Sudbury
