Why price carbon?

Broadly speaking, we need a price on carbon emissions to incorporate the hidden costs of these emissions, such as those related to the impacts of global warming and climate change. These costs are currently NOT incorporated into the price of carbon fuels, the use of which has led to increased carbon dioxide in the atmosphere, which, in turn, has led to global warming and climate change.


As the largest and most populated province and one of the leading economies in Canada, Ontario is responsible for nearly a quarter of all emissions in the country. Ontario has made several strides in reducing its greenhouse gas emissions. However, further efforts are needed to meet the province’s reduction target of 150 megatonnes (Mt) by 2020 and to 35 Mt by 20501 from our current emissions of 167 Mt (in 2012) 2.


To date, many large jurisdictions in the world have put a price on carbon emissions. In Canada, British Columbia adopted a carbon tax in 2008, and Quebec has recently introduced cap and trade.

Jurisdictions that have adopted carbon pricing systems include:3
Carbon tax: British Columbia, Republic of Ireland, Denmark, Finland, France, Netherlands, Sweden, United Kingdom, Norway, Switzerland, Costa Rica.


Source: Carbon Pricing around the World 1

Cap and trade: The European Union; California, USA; Quebec, Canada; Kazakhstan; Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont as part of the Regional Greenhouse Gas Initiative.2



Source: Mapping carbon pricing initiatives: developments and prospects4

Why is carbon pricing important in Ontario?

Ontario is the leading manufacturing province in Canada, and has the largest city in Canada -Toronto, which is one of the leading economic centres of the country. Furthermore, Ontario is the most populated province. As a result, adopting an effective and broad carbon price that is optimally recycled is expected to strengthen our economy by creating many jobs, and reducing our carbon emissions. Also, adopting a carbon price in Ontario would result in sizable reduction in Canada's emissions, and this could have a ripple effect on other jurisdictions.




Support/Call for carbon pricing in Ontario


In June 2013, several Ontario-based investors, academics, industry and civil society representatives called upon the government of Ontario to adopt carbon pricing.5 Furthermore, in the same year, the Environmental Commissioner of Ontario suggested that Ontario should put a price on our carbon emissions.6


Also, in 2013 in consultations by the province of Ontario on greenhouse gas emissions reductions program design, Sustainable Prosperity (a national green economy think tank/do tank) submitted that Ontario should build on previous efforts to reduce carbon emissions by introducing a market-based mechanism to reduce emissions i.e. carbon tax or cap and trade systems. This would enable the province to achieve its own emissions reduction target.7 In addition, Climate Action Network Canada, an organization composed of 85 member organizations, applauded the efforts to design a cap and trade system for Ontario, while identifying several shortcomings in the proposed design and goals.8 These include: (1) weak potential contribution of program towards achieving the province’s emission reduction target: 2 Mt of CO2e or 10% of the remaining gap, and (2) inadequate coverage.




1.       Ontario Ministry of the Environment. Ontario’s climate change action plan. Creating our sustainable future. Ontario Ministry of the Environment, 2006 at https://archive.org/details/std01079174.ome

2.      Environment Canada, Government of Canada. Greenhouse Gas Emissions Data. (2013). at https://www.ec.gc.ca/indicateurs-indicators/default.asp?lang=en&n=BFB1B3...

3.      Environmental and Energy Study Institute. Carbon Pricing around the World. Environmental and Energy Study Institute, 2012 at http://www.eesi.org/fact-sheet-carbon-pricing-around-world-17-oct-2012

4.      Kossoy, A., Oppermann, K., Boukerche, S., Reddy, R. C. & Bosi, M. Mapping carbon pricing initiatives: developments and prospects. 1–98. The World Bank, 2013 at https://openknowledge.worldbank.org/bitstream/handle/10986/15771/77955.pdf

5.      Climate Action Network Canada. Stakeholders Write Letter to Ontario Government Urging for Carbon Price – Climate Action Network Canada. (2013). at http://climateactionnetwork.ca/2013/06/05/stakeholders-write-letter-to-o...

6.      Environmental Commisioner of Ontario. Carbon pricing. Environ. Comm. Ont. (2013). at http://www.eco.on.ca/blog/tag/carbon-pricing/

7.      Sustainable Prosperity. Sustainable Prosperity Submission. Consultation on Greenhouse Gas Emissions Reductions Program Design 2013 (Ontario). (Sustainable Prosperity, 2013). at http://www.sustainableprosperity.ca/dl984&display

8.      Climate Action Network Canada. CAN-Rac Comments on “Greenhouse Gas Emissions Reductions in Ontario: A Discussion Paper". (Climate Action Network Canada, 2013). at http://climateactionnetwork.ca/2013/04/24/can-rac-comments-on-greenhouse...