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Ontario tips the balance, Star view,

At long last Canada is getting serious about curbing the greenhouse gases that feed climate change and sap the planet’s health. No thanks to Prime Minister Stephen Harper’s oilsands-obsessed government. The Conservatives have failed miserably to provide the national leadership we need on this file.

The credit goes to Ontario Premier Kathleen Wynne and her provincial counterparts. Wynne is making common cause with a fellow Liberal, Quebec Premier Philippe Couillard, to put a price on the carbon emissions that drive up global warming.

“Climate change needs to be fought around the globe,” Wynne said on Monday, “and it needs to be fought here.” She’s right. It’s good to see the premiers of the biggest provinces step up to the plate and encourage others to do the same.

Indeed, Canada’s Ecofiscal Commission, a group of leading economists with high-profile political and business backing, has just called for pretty much what Wynne and Couillard envisage: A “provincially led national energy strategy” based on carbon pricing as “a practical way forward.” Carbon-pricing, while tailored to each province’s needs, should be stringent, broadly based and co-ordinated, the group says.

Wynne’s bold move breathes life into Ontario’s principled decision in 2008 to set a price on carbon when it signed the Western Climate Initiative with Quebec, British Columbia and California. It means that more than 75 per cent of Canadians will soon live in a province with some form of carbon pricing to discourage the burning of fossil fuels. And this is the second time Ontario has shown leadership where the Harper government has not. Much of Canada’s modest progress to date has stemmed from Ontario’s decision to close coal-fired hydro plants.

With her announcement that Ontario will soon introduce a cap-and-trade system, Wynne has tipped the national balance decisively in favour of Quebec’s flexible but complex model, which set a recent carbon credit price of $15-a-tonne at auction, over B.C.’s $30-a-tonne carbon tax or Alberta’s limited $15 tax. More than half of Canada’s economic output will now be covered by cap-andtrade. Other provinces will be encouraged to take part.

The Star would have preferred a straight-up, B.C.-type tax that would be easily understood, cheap to administer and less distortive of markets. But cap-and-trade has its advantages. It lets the authorities set a hard, preferably low, cap on emissions, avoids the politically loaded term “tax” and is industry-flexible.

Carefully designed, a rigorous cap-and-trade system can help get us to where we need to be on a national scale: cutting output by 2020 to 17 per cent below 2005 levels — and deeper in the future.

That’s the target Harper has endorsed. But he has looked to others to deliver, even as he fails to regulate the carbon-spewing oil and gas sector. Just last week, federal Environment Minister Leona Aglukkaq prodded the provinces to come up with new greenhouse gas reduction targets that Ottawa can present to the United Nations as Canada’s contribution to a climate conference later this year. That took a special kind of chutzpah.

As for the details of Wynne’s approach, Ontarians will have to wait. The government intends to canvass communities and industry in the next six months to design a system that works best.

Broadly, under cap-and-trade the government sets limits to the amount of carbon that targeted industries can burn. It then auctions off emissions credits. Firms that want to burn more than their share can purchase credits from companies that burn less than their allotment. Over time, the cap is lowered. And revenues are (or should be) plowed back into green projects including our fastgrowing green-tech sector, public transit and household energy conservation.

Depending on the price of carbon credits, Ontario’s system could generate between $1 billion and $2 billion annually, to be used for greener purposes. And the price of gasoline may well increase by a few cents a litre, as it has elsewhere. But the pocketbook impact won’t be known for some time yet.

What is clear is that Ontario and Quebec are shouldering the national challenge created by Ottawa’s abject failure to lead on the climate file. It is a good day for Canada, and a stinging indictment of federal inaction.

Kudos to Ontario and Quebec for climate change leadership