When it comes to Prime Minister Justin Trudeau’s national carbon pricing plan, Canadians deserve straight answers on two questions.
What is it going to cost them and is it going to work?
Will it actually lower industrial greenhouse gas emissions linked to climate change?
Ontario Auditor General Bonnie Lysyk recently evaluated Premier Kathleen Wynne’s version of Trudeau’s national carbon pricing plan, a provincial cap-and-trade scheme which will kick in Jan. 1.
Any logical reading of Lysyk’s findings should send Ontarians screaming for the exits in terror.
Except there are no exits as long as Wynne has a majority government and keeps doubling down on Ontario’s carbon pricing program which is, basically, fiscally insane.
Here’s why: Lysyk reported Wynne’s cap-and-trade scheme will cost Ontario households and businesses $8 billion between 2017 and 2020, or $2 billion per year.
But that, said Lysyk, will only achieve 20% of Ontario’s 2020 greenhouse gas reduction target, or 3.8 megatonnes (Mt) of emissions of the 18.7 Mt required.
So when Ontario joins the existing California-Quebec cap-and-trade market in 2018, the government “plans to count emission reductions achieved in Quebec and California using allowances purchased by Ontario emitters to meet the remaining 80% of the target.”
What could go wrong?
This as explained by Lysyk: Since the Ontario, California and Quebec governments haven’t worked out a protocol for how emission reductions will be recorded, “the potential exists for double reporting of emission reductions between California, Quebec and Ontario”.
Here’s why: Say a business in California sells 100 carbon permits (each one permitting the bearer to emit one tonne of industrial carbon dioxide emissions or their equivalent) to an Ontario company.
California could then record the sale of 100 carbon permits as having lowered its emissions by 100 tonnes (because they’re being exported to Ontario).
Meanwhile, Ontario could record the sale, since it lowered California’s emissions by 100 tonnes, as having lowered Ontario’s emissions by 100 tonnes since, “emission reductions achieved in Quebec and California using allowances purchased by Ontario emitters” will be included in Ontario’s greenhouse reduction targets.
In addition to the $8 billion cost to Ontario households and businesses for cap-and-trade over the next four years, notes Lysyk, Ontario companies which emit greenhouse gases will pay up to $466 million to buy carbon permits from emitters in Quebec and California, possibly rising to $2.2 billion by 2030.
And yet, Lysyk notes, the Wynne government “has not adequately studied whether Ontario businesses buying these allowances will actually contribute to additional emissions reductions in Quebec and California. Without that … these funds may be leaving the Ontario economy for no purpose other than to help the government claim it has met a target.”
The Wynne government argues any emission reductions Ontario achieves for California and Quebec can legitimately be recorded as Ontario reductions.
It also says it isn’t relying just on cap and trade to reduce emissions, but on a much larger climate change action plan and strategy.
But, as Lysyk observed, “more than two-thirds of the 37 actions set out in the Ministry’s 2011-2014 Adaptation Strategy and Action Plan … were not completed at the time of our audit.”
Simply put, if Ontario’s example is typical of how carbon pricing will be implemented by the provinces under Trudeau’s national scheme, then it’s not just Ontarians should be afraid. So should every Canadian.
Toronto Sun December 14th 2016 by Lorrie Goldstein