How Is Cap & Trade Funding A Green Ontario?
Apr 4, 2018
Governments can play a powerful role in the fight against climate change. They have many tools that allow them to discourage environmentally harmful economic activities and incentivize activities that are good for the planet. The Ontario government has taken a leadership role in providing solutions to climate change. With the introduction of the Ontario Cap and Trade program, money will be directed to the new Green Ontario Fund (GreenON) to encourage energy-efficiency for homes, businesses, and organizations.
Ontario’s Cap and Trade program came into effect on January 1st 2018. The program sets a limit on the carbon emissions that Greenhouse Gas-intensive businesses can produce. Carbon credits are auctioned off to companies which generates revenue for the government. The number of carbon credits decreases each year so companies must either reduce emissions on their own or trade their allowances with other companies who have reduced their emissions and no longer need their full allowances. While there is a vigorous debate amongst economists as to whether a cap and trade program or a carbon tax is best to address climate change, many people believe that some form of economic action is needed. Whereas some carbon tax systems aim to be ‘revenue neutral’ the Cap and Trade program offers a unique situation where proceeds are generated from the auction of carbon credits.
What happens to the proceeds of the carbon credit auction? That’s where GreenON comes in. Proceeds collected from the Cap and Trade program (an estimated $1.9 billion per year) are required to be invested into programs that reduce Ontario’s carbon emissions. This can help to establish a reinforcing loop that will speed up the creation and adoption of new technologies, programs and policies to reduce GHGs, while at the same time, helping businesses that are looking for those technologies, programs, and policies so that they can reduce their emissions.
So what sorts of initiatives does the GreenON fund finance? There are many financial incentives offered to Ontario businesses, organizations, and homeowners to help them become more energy efficient. You can find a full list of programs here.
Ontario residents can get rebates on a variety of home energy efficiency projects such a a $100 rebate for the purchase of a smart thermostat, free home energy audits, and rebates on qualifying installations on installations from windows to heat pumps. Consulting this list could save you money when planning your next home improvement.
For Businesses and Organizations:
There are a variety of programs that help businesses, manufacturers or property managers conserve electricity – from simple things like switching out old lighting systems to new LED lights, to larger investments like upgrading to more energy efficient factory machinery. There are also incentives for businesses and property owners to install Electric Vehicle charging stations to provide EV drivers with more recharging options.
As an energy generator in the province, SolarShare is proud to be contributing clean energy to Ontario’s electricity mix and contributing to Ontario’s GHG reduction goal. In addition to having cleaner energy sources, we can all be smarter about how we use electricity and fossil fuels which can go a long way towards achieving our GHG reduction targets to address climate change.