Carbon pricing sets the stage for real performance: Cap-and-trade is a start

On April 29, I published an opinion piece in Ottawa Citizen (here).

The piece is a reflection on Ontario’s decision to go ahead with a cap-and-trade system. The decision is a good one, I argue, not because cap-and-trade is the key to reduce greenhouse gas emissions, but because of a different purpose it serves. It is but a necessary condition for everything else that is needed for a low carbon economy to develop.

The “everything else” part is yet to be imagined and developed, and now that a decision has been made on cap-and-trade, a new terrain opens up for developing the building blocks of a low carbon economy.

But why is it a necessary condition? It’s because carbon pricing creates an institutional tapestry, upon which a whole range of additional policies and initiatives can be built, linked, and scaled up. Cap-and-trade is a way of achieving this. It is not the only method. It may not be the most straightforward method. And it presents hefty challenges. But it still fills an important void. Without the underlying institutional grid, all the interesting aspects of a possible low carbon economy can’t begin to develop. In other words, carbon trading should be viewed as doing something more than limiting emissions. It serves a facilitative role for what comes next.

In a year that is a turning point in the global climate effort, it is important that Canada has something to show for itself come December.

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