My name is Felixe Denson and I’m extremely excited to announce that this is going to be my first time contributing to the Wingd website as a writer!! I just recently finished a class on International Organizations and one thing that really resonated with me was recognizing how different corporations impact our environment negatively through their means of production, as well as through the transportation of their products. Although the market of production is a notable contributor to the emission of Greenhouse Gases (GHGs) in our atmosphere, there are ways in which environmental policy and the market have created what I think are tangible strategies to support the growth of the market and also allow for increasing sustainable development. While this past Friday was Earth Day, this remains to be an especially prominent topic, and I think that one extremely cool topic is the idea of a cap and trade policy.
The implementation of cap and trade policy is an amazing example of how economic policy and scientific innovation can come together. The creation of a larger carbon market has the ability to make the world one step closer to saving the planet, starting in Ontario.
The Intergovernmental Panel on Climate Change (IPCC) acts as an international body which seeks to find scientific strategies in order to assist with global climate change. The IPCC has stated that “warming of the climate system is unequivocal” as well as noting that “human influence on the climate system is clear” (IPCC Climate Change Synthesis Report 2007, 2). From this statement it is apparent that individuals must start implementing programs and systems within our global community in hopes of counteracting the ways in which they have destroyed the planet thus far.
As a result of fast paced climate change, global, national and regional discussion about the administration and implications of climate policy has achieved great momentum. The rise of cap and trade systems have become recognized as a viable alternative to the emissions of Greenhouse Gases by facilitating a GHG allowance and allowing trade between businesses.
In the last six months, the province of Ontario has joined Quebec and California in the Western Climate Initiative (WCI) in hopes of battling the production of GHG emissions. The WCI has implemented a cap and trade policy which the Ontario Chamber of Commerce defines Cap as “a market-based mechanism that induces emitters to reduce their GHG emissions by introducing a cost to emit, or a carbon price” (2015, 13).
Ontario is attempting to implement the Accord which was achieved at the 2015 United Nations Paris Climate Change Conference through the execution of cap and trade. This universal agreement has and will continue to work towards fighting climate change with the agreement from 195 countries. Specifically looking at the province of Ontario, the Climate Change Mitigation and Low-carbon Economy Act is looking to assist in the reduction of greenhouse gases being emitted into the atmosphere, as well as assist in creating energy saving initiatives. Although Ontario has finally put this cap and trade policy into motion, there are still many kinks concerning the provincial system and its enforcement policies that are still being negotiated.
As interprovincial discussions about the possibilities of carbon taxing provincially and federally have begun to surface, the application of a provincial cap and trade policy has received many questions. Prime Minister Justin Trudeau has previously denied the prospect of a cap and trade system calling the idea “nonsensical” and “so unrealistic” (Global Leaders Debate, 2015). Although he previously stated this, Trudeau has further accepted the initiative that Premier Kathleen Wynne has put into practice for the province of Ontario.
Critiques of cap and trade would say that for the large corporations it does not actually reduce emissions, it just forces these businesses to look for ways to allocate money to afford it. These large corporations can afford to buy other corporations caps, and therefore these corporations are still allowed to function as they wish. Furthermore, on top of businesses who outsource for cheap labour, they will start to outsource for relaxed environmental regulations.
Although there are limits within the adoption of a cap and trade system, it can be understood as a stepping stone to challenging climate change. If corporations decide to create loop holes around cap and trade policy by outsourcing, the implementation of stricter laws against this outsourcing can be implemented as a counter. If laws around the process of moving to other countries were heightened, this could create a whole other ball game within the creation of environmental policy.
In order for climate change to be stalled and potentially reversed, businesses that are contributing to the production of these destructive emissions must be a major part of the solution. A cap and trade policy offsets the influence that the federal government has on a major aid in this instance because it puts the responsibilities for environmental change on the corporations.
Cap and trade systems are an extremely viable option in the realm of sustainable development. The World Commission on Environment and Development defines sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (1987, 16). The implementation of cap and trade systems have the ability to, not only reduce the amount of carbon emissions that are entering the world’s atmosphere, but also to provoke more discussion about achievable alternatives to saving our planet.
The implications of the implementation of cap and trade policies has the ability to be world changing. The Ontario carbon market has the ability to be successful in helping our province become green and also allows for the reduction of GHGs by lowering the cap of emissions as years under a cap and trade program continue.
A key advantage of the Ontario cap and trade program is the incentive that it will have in continuing the search for innovation. As cap and trade allows for the progression of environmental flourishing as well as the success of businesses, I hope that the current government of Canada will see the successes in the provincial realm and consider implementing a federal cap and trade as a viable option for the reduction of GHGs.
As a millennial who is constantly working towards making conscious decisions to benefit the environment and also promoting democratic functions in all arenas, I believe the adoption of a cap-and-trade system to reflect both of these things. This market based approach will afford flexibility to actors within the emission trading market, allowing for them to do what they believe is most beneficial for their company, but also firmly states that GHG emissions are going to and need to be cut.
Citations Used in this article
H.R. 172, Minister of Environment and Climate Change., 1-60 (2016) (enacted). Web.
IPCC Fourth Assessment Report: Climate Change 2007. Rep. Intergovernmental Panel on Climate
Ontario Chamber of Commerce. “Clean Profits: Pricing Carbon and Embracing the Economic
Potential of Cap and Trade.” Ontario Chamber of Commerce. 2015. Web.
“Trudeau Says NDP’s Cap-and-trade Proposal Is So Unrealistic'” The Globe and Mail. 17 Sept.
United Nations. Report of the World Commission on Environment and Development: Our Common
Future. World Commission on Environment and Development. 1987. Web.