April 13, 2015 / 6:04 PM / 2 years ago

Ontario confirms it will join Quebec, California in carbon market

TORONTO (Reuters) - Ontario will join a cap-and-trade market set up by Quebec and California to reduce carbon emissions and slow the pace of climate change, provincial Premier Kathleen Wynne said on Monday.

Quebec joined California’s cap-and-trade carbon market in 2014. Both are part of the Western Climate Initiative, a group of U.S. states and Canadian provinces moving to create a carbon market to reduce emissions. Ontario, Canada’s most populous province, had long signaled it would also opt for cap-and-trade.

“The cost of further delay, further pollution, and further catastrophic and irreversible weather events - these are the costs that we cannot endure, the costs that we must not impose on our children and grandchildren,” said Wynne, a Liberal.

Cap-and-trade markets require industrial facilities to purchase or trade permits at a market price for each unit of carbon emitted. Ontario offered no pricing details on Monday.

Ontario’s announcement sets the stage as Canadian provincial leaders hold a climate-change summit in Quebec City on Tuesday. Politicians in Quebec and California and environmental groups welcomed Ontario’s move, but key absences at the summit reflect conflicting stances on climate change policy.

The premiers of oil-rich Alberta, which is Canada’s fastest-growing source of greenhouse gases, and British Columbia, which has already opted for a carbon tax instead of cap-and-trade, are not attending the summit.

Federal Environment Minister Leona Aglukkaq, also not attending, sent letters to her provincial counterparts last week, suggesting they need to do more to contribute to Canada’s climate change policies for the post-2020 period.

Ontario has assailed the federal government for its lack of action on climate change and absence from negotiations, saying it was taking credit for provincial policies such as Ontario’s earlier move to shut all its coal power plants.

Canadian Prime Minister Stephen Harper, speaking in Panama on Sunday, said his Conservative government will update its greenhouse gas reduction targets before a Group of Seven nations summit in June.

Although Ontario is a net exporter of electricity, at times it imports carbon-intensive coal-generated power from Michigan, Minnesota and New York. Ontario’s cap-and-trade program may threaten that practice as utilities would likely pay more for permits as the U.S. plants would not be part of the market.

New York is among nine northeastern states that have their own trading system for power plants, but Michigan and Minnesota are not part of that initiative.

(For a graphic on carbon markets, click:

here)

Reporting by Allison Martell and Mike De Souza; Editing by Lisa Von Ahn and Peter Galloway

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