Ontario Announces Results of First Cap and Trade Program Auction
Proceeds Will Be Invested to Help Households and Businesses Fight Climate Change
Today, Ontario announced the results of the province's auction of greenhouse gas emissions allowances, held March 22, 2017.
A total of 25,296,367 current (2017) allowances were sold at a settlement price of $18.08 and a total of 812,000 future (2020) greenhouse gas emissions allowances were sold at a settlement price of $18.07. The auction generated $472,031,155 in proceeds, which by law will be invested in programs that will reduce greenhouse gas pollution and help families and businesses reduce their own emissions through the Climate Change Action Plan. Ontario has already committed $325 million to the Green Investment Fund to kick-start climate change actions by:
- Helping homeowners use less energy and reduce energy bills through home retrofits
- Supporting more electric vehicle charging stations across Ontario
- Retrofitting social housing developments to boost energy efficiency
- Helping businesses reduce emissions
- Funding local environmental organizations doing important conservation work
- Providing Indigenous communities with training, tools and infrastructure to address climate change.
The auction was administered using services contracted by the Western Climate Initiative (WCI) Inc., with oversight from an independent market monitor to ensure market integrity.
The summary report of the results has been made available to the public.
- On May 18, 2016, Ontario passed landmark climate change legislation that ensures the province is accountable for responsibly and transparently investing proceeds from the cap and trade program.
- The Climate Change Action Plan and greenhouse gas emissions reduction program form the backbone of Ontario's strategy to cut greenhouse gas pollution to 15 per cent below 1990 levels by 2020.
- In April 2015, Ontario announced its intention to join the linked system under the Western Climate Initiative, partnering with other jurisdictions, including Quebec and California, and making carbon pricing a cornerstone in Ontario's fight against climate change.
- After introducing its cap and trade program and putting a price on carbon, California’s economy grew at a pace that exceeded the growth of the rest of the U.S. economy.
- The number of jobs in California grew by almost 3.3 per cent in the first year and a half of the program, outstripping the national rate of job creation, which was 2.5 per cent over the same period.
- In the United States, the Regional Greenhouse Gas Initiative (RGGI – which issues carbon dioxide allowances distributed through regional auctions) has invested more than $1.3 billion of auction proceeds in programs that include energy efficiency, clean and renewable energy, greenhouse gas abatement and direct bill assistance.
- RGGI investments are projected to return more than $4.67 billion in lifetime energy bill savings to more than 4.6 million participating households and 21,400 businesses.
“Our government’s plan to reduce carbon emissions is the right solution for Ontario to fight climate change. 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.”