Believe it or not, “cap and trade” was being debated as an economic policy option way back in my university days. It has only taken a lifetime to implement it in a handful of jurisdictions and the debate still continues.
The real question is what happens with the money, and how effective will it be in addressing the critical climate change issue? (Climate Change Is About to Accelerate Past the Point of No Return, Dec 2016) The opposition party agues for a rebate of a carbon tax directly to households. The current government has taken a different approach.
Now that Ontario has ‘captured’ the revenue from the first auctions of carbon credits the government announced this month that it “will use the proceeds of its cap-and-trade program to establish a fund — called the Green Ontario Fund — through a provincial agency. The program will offer up to a $7,200 rebate for new insulation, up to $5,000 for new windows, and up to $20,000 for new ground source heat pumps.”
Is there a difference to these two approaches? Either way, with cap and trade or a carbon tax, whether or not we see any real change in carbon emissions is still very much up to us. We have to make thousands of individual decisions to do something meaningful in a timely manner.
At least the Green Ontario website presents a menu of funded options for both households and businesses. You’ll notice that some of these programs were previously-existing conservation programs offered by gas distributors and electric utilities (Save on Energy) while others are new provincial programs. Now all conservation programs are grouped together in specific categories: home; small business; organization. But you, the consumer, have to educate yourself about the different opportunities, weigh the relative value of different options (net cost and estimated savings), be motivated to complete an application for your chosen program(s) and select a pre-approved contractor. Hence, I’m giving a little nudge with this free plug for the Green Ontario web site – the government is waving a fist full of dollars your way. They’ve got my attention and maybe yours.
Ontario isn’t the first to tackle carbon emissions. In the UK, a decision was made some years ago to ‘just do it’. An insulation upgrade program simply went street by street, house by house, in a systematic approach that was said to be 90% more efficient than a random installation based on scattered applications. It gave an immediate boost to employment but this approach requires deciding priorities – who’s first and who comes last.
The New Year promises to be a decisive time with a likely tumultuous election in the mix. Will Ontarian homes and businesses be motivated enough by the carbon trade incentives? Will contractors be up to the challenge? Will the total upgrades be good enough and numerous enough to make a meaningful difference in carbon emissions and your payback savings? It’s entirely up to you and the ‘wisdom of the crowd’.