Ontario raised over C$472 million through the auction of emissions allowances as Canada's most-populous province embarks on a cap-and-trade scheme in an attempt to mitigate greenhouse gas output.
The province sold approximately 25.3 million current emissions allowances at C$18.08 per tonne in an auction that closed March 22. Ontario also sold 812,000 future emissions allowances for C$18.07 per tonne, according to a government statement. The futures are for 2020.
Ontario said in 2015 that it planned to join a cap-and-trade scheme that is part of the Western Climate Initiative and in 2016 passed climate legislation paving the way for participation in the system, which includes California and Quebec. WCI oversaw the auction of the initial credits. Ontario has set a goal of reducing emissions to 15% below 1990 levels by 2020.
"The success of a cap–and-trade system lies in how effectively it reduces carbon pollution," Sarah Petrevan, senior policy adviser at environmental think tank Clean Energy Canada, said in an email. "Ontario's approach is projected to reduce the greatest volume of emissions with the least impact on its economy. Ontario can now use the proceeds of this auction to spur the province's clean economy forward."
Ontario has already committed C$325 million to its Green Investment Fund to start climate change-mitigation initiatives. The government said the initial auction was overseen by an independent market monitor to ensure its integrity.
"Our government's plan to reduce carbon emissions is the right solution for Ontario to fight climate change," Ontario Environment Minister Glen Murray said in the April 3 statement. "This plan sets a hard cap on greenhouse gas emissions while giving flexibility to businesses and industry in terms of how they meet their caps. Through this system, we will meet our emissions reduction targets at the lowest cost to the people of Ontario."
As part of the climate plan government-owned Ontario Power Generation Inc. has shuttered its coal-fired generators and the province plans to pivot to nuclear and renewables for most of its power. In addition to Ontario Power Generation, other qualified bidders included subsidiaries of Shell Energy Co. TransAlta Corp. Enbridge Inc., TransCanada Corp., Veresen Inc. and Pembina Pipeline Corp..