Experts: Businesses better gear up for cap and trade

The good old days are coming to an end for carbon in Ontario, and a new age of decarbonization dawns in 2017.

A provincial cap and trade system looms, and local businesses are wondering what it means to them. EarthCare Sudbury held a panel to address questions and concerns on Wednesday morning. The main message: It’s going to impact everyone, so get ready.

“I hope some of the small businesses walk away with the knowledge that there are doing to be changes in pricing coming, there is a huge movement coming down the pipes,” said Jennifer Babin-Fenske, co-ordinator of EarthCare.

While the proposed policy would only directly impact businesses emitting over 25,000 tonnes of greenhouse gasses (GHG) each year, it has ramifications beyond that. The costs will be passed along, and things like gas prices are anticipated to go up 4.3 cents per litre by 2017 in Ontario due to the policy.

Panelist Sean Capstick, principal at Golder Associates, explained that in a cap and trade system, a limit is placed on how much GHG a company can emit. Any any amount above that limit (or cap) must be purchased at a premium. The cap is lowered over the years, which in theory will encourage people to reduce GHG emissions over time.

The policy is anticipated to be more effective than a carbon tax, said panelist Livio Nichilo, CEO of InternatEnergy Solutions Canada.

“Tax doesn’t make change occur — this almost forces the change to occur,” said Michilo.

Cap and trade will still generate revenue from the sale of units representing GHG emissions above the allowance. The revenue will be reinvested in initiatives that reduce the risk and impact of the policy by providing alternatives and assistance.

The cap and trade policy is also just one piece of a bigger picture.

“The cap and trade program will not operate alone to reduce GHG emissions,” said Nichilo. “There are also low carbon transportation policies, renewable energy policies, energy efficiency programs, changing building standards.”

Ed Cocchiarella, principal at IDEAL EHS Systems, attended the panel to prepare himself and his clients for the change. The environment, health and safety consultant expects some of his clients are going to start looking into how to adapt their facilities to minimize the impacts of cap and trade, as well as the other policies.

“You better start to understand them to get in the game, if you don’t, the costs will get out of control,” said Cocchiarella.