Ontario plans cap-and-trade system

Canada’s most populous province is planning to institute a cap-and-trade system to limit greenhouse gas emissions.

Ontario’s system would be part of an existing cap-and-trade system with neighboring Quebec and California, the Globe and Mail reported.

{mosads}Glen Murray, Ontario’s environment minister, will present a proposal to the province’s Cabinet within 10 days, as directed by Kathleen Wynne, Ontario’s premier.

The three-jurisdiction greenhouse gas market would cover 61 million people and more than 60 percent of Canada’s population.

The government would auction off the right to emit carbon dioxide and other greenhouse gases, and companies that want to emit more would have to buy permits from companies that no longer need them.

The system is likely to raise between C$1 billion and C$2 billion a year, which would be directed to environmental programs, the Globe and Mail said.

Because of Ontario’s size, cap-and-trade may have the largest environmental impact of any environmental program so far in Canada.

Officials chose cap-and-trade over a carbon tax in order to avoid the appearance of a tax and to be able to put a hard cap on carbon emissions, the newspaper reported.

British Columbia has the only other major greenhouse gas pricing system with its carbon tax.