The excellent report by the Financial Accountability Officer (FAO) Peter Weltman, Cap and Trade: A Financial Review of the Decision to Cancel the Cap and Trade Program, shows that cancelling this program will cost Ontario taxpayers billions.
Cap and trade was a polluter-pay system. It added a price to carbon pollution in Ontario, and the revenue from it funded energy efficiency and other programs to curb greenhouse gases and lower energy bills.
The FAO report notes direct losses to the provincial treasury of $3 billion over four years (plus litigation costs and damages) that will worsen Ontario’s budget balance.
In addition, there are many other consequences that the FAO was not asked to quantify. As described in the September 25, 2018 report from the Environmental Commissioner of Ontario, Climate Action in Ontario: What's Next?, the likely consequences include:
- alternative methods of reducing Ontario's greenhouse gas emissions will be just as necessary but more expensive
- the Ontario budget and Ontarians will incur higher costs for climate-related disasters
- Ontario may lose the environmental, public health and economic benefits of reducing Ontario's $11 billion/year dependence on importing fossil fuels
- taxpayer-funded public services (including municipalities, universities, schools, public housing and hospitals) will spend more for energy due to the loss of energy efficiency projects and capital funds to renovate aging buildings
- Ontario will lose the millions in matching funds that cap and trade programs were mobilizing and bringing into Ontario to make our businesses and institutions more efficient, and
- Ontario may damage its $20 billion/year cleantech industry.