Carbon market a winner for planet and economy
This winter, the provinces of Ontario and Quebec and the state of California have all experienced ominous signs of what’s to come.
In December, the largest fire on record raged across more than 1,000 square kilometres in Southern California. Last month, as unseasonably warm weather swept across southern Ontario, the Grand River spilled its banks, causing devastating floods. And in Quebec, traditional ice roads communities have long relied on for trade and commerce remain closed because of higher than normal temperatures.
These incidents are not isolated. The carbon pollution spewing into our atmosphere when we burn gas, coal or oil is changing our climate and making our weather more unpredictable and more destructive.
Scientists across the globe are sounding the alarm. Homes, businesses and lives are being wiped out. Governments must spend billions to respond. This will be our new normal unless we act boldly to stop climate change.
But we can’t do this alone. Just as we band together to fight wildfires in other provinces and help other states rebuild after a devastating storm, we must work collectively to build a cleaner, carbonfree future for our children and grandchildren.
This is exactly what Ontario, Quebec and California are doing with the creation of the world’s second largest carbon market, which held its first joint auction just last month and sold out.
The concept of this market is simple — and proven: Set a cap on carbon pollu- tion that becomes increasingly strict, while making carbon allowances available to purchase for companies that need flexibility. Over time, allowances will become scarce and companies will find it’s cheaper to limit their carbon emissions.
In the meantime, the billions of dollars in proceeds generated over time from auctioning carbon allowances will be invested back into our communities to preserve green space, fund energyefficiency improvements in homes, build affordable housing, expand public transit and support programs to meet our ambitious greenhouse-gas reduction targets.
It is clear to us that a market-based mechanism, with the market setting the price, is the best way to tackle a marketbased problem such as climate change. Importantly, the carbon market provides businesses with the flexibility they need to reduce carbon pollution in the most cost-effective way possible.
Compare that to command-and-control regulations or a flat carbon tax, which would impose higher costs on everyone with no flexibility for business, no cap on pollution and no guarantee of emission reductions.
To maximize the benefits of a carbon market, it must mirror the workings of today’s global marketplace, where increased integration fosters innovation and lowers the cost of everything from cellphones to solar panels.
This is why the largest state economy in the United States and the two biggest provincial economies in Canada have joined forces.
It means our businesses are now able to combine their strengths and cut pollution for a fraction of what it would cost if we had acted alone.
Together, we are proving that growing the economy and protecting the environment go hand-in-hand. This is not an either-or proposition.
California first launched its carbon market in 2012. Since then, economic growth has consistently outpaced the rest of the United States and the state is on track to beat its 2020 emission reduction targets. Quebec’s economy made strong gains since it introduced a carbon market in 2013, today enjoying its lowest unemployment rate in 40 years. Ontario’s carbon market has been in place for a little over a year and the province’s economy has grown at a faster rate than any G7 country.
But there is a serious risk we could fall backwards. And we have a choice to make. Forge a path forward and decarbonize our economy, or give in to the science deniers and naysayers who have no regard for our future. When our grandchildren ask us what we did — when the dangers of sticking with a carbon-based economy were so clear — we need to be able to say we did everything we could.
With the joint carbon market we’ve created between Ontario, Quebec and California, we’re doing everything we can to win this fight. And we invite every state and province in North America to join us.