Last week the Canadian government announced there will be a federal carbon pollution pricing system in place in Canada starting next year and will affect provinces that have not already set up their own carbon tax system. Pembina Institute photo by Rachel Brown.
Pollution pricing will result in better health, more jobs and help Canada keep up with transitioning economy
By Robin Edger
This article was published by the Pembina Institute on Oct. 30, 2018.
Last week, the Canadian government announced that there will be a federal carbon pollution pricing system in place in Ontario starting next year.
This is great news for Ontarians. Here are the top five reasons why:
1. Most people will get more back than they pay
We now know that through the Canadian government’s newly announced Climate Action Incentive rebate plan, most households will receive more money back than they pay in increased costs from the price on carbon pollution.
The average Climate Action Incentive per Ontario household will be $300 in 2019. The average cost impact of the price on carbon pollution per Ontario household will be $244.
And that’s just the average. Do you live in an apartment instead of a mansion? Do you take transit or ride your bike? Then you’ll see an even bigger benefit. By taking action to reduce energy consumption, Ontarians can save on energy bills while still receiving the full Climate Action Incentive.
2. Better health
Air pollution isn’t just the smoggy haze we sometimes see in places like Toronto and Windsor. Air pollution isn’t always visible. It’s a mixture of gases and particles that are too small to see.
Air pollution often begins in big cities, but pollution levels can be just as high or higher in rural and suburban areas.
A price on carbon pollution will lead to cleaner air in Ontario through incentivizing more efficient vehicles, electric vehicles, transit use, cycling, and walking.
Cleaner air will lead to decreases in lung cancer, dementia, and childhood respiratory disease. The Canadian Medical Association found that air pollution causes 21,000 premature deaths in Canada each year and predicted that this number will rise by 83 per cent by 2031. The price on pollution will help avert this. All of this leads to less cost on our public healthcare system and a healthier society.
3. More jobs
The price on carbon pollution will lead to job growth in Ontario, by increasing the demand for clean technology. As people and businesses in Ontario begin to take actions to reduce their energy bills, the innovative industries that support these actions will gain customers and hire more people to meet this demand.
With the largest and fastest growing clean tech sector in Canada, Ontario is particularly well-positioned to compete in a clean economy. Ontario has a highly skilled labour force, manufacturing expertise, and is home to many leading universities, and a new dedicated clean tech accelerator program in Kitchener-Waterloo.
In 2017, according to the Government of Ontario, the clean tech sector in Ontario included 5,000 companies with 130,000 employees, generating about $19.8 billion in annual revenue. While these numbers include all those involved in manufacturing, installing, assembling, and otherwise facilitating clean tech, almost a fifth of those companies are innovative clean tech companies directly developing new intellectual property. These are great jobs, and we want more of them.
One example of a clean tech employer is Morgan Solar, a Canadian renewable energy company based in Toronto. Up until now, they have focused much of their business on exports to countries that already have a price on carbon pollution, such as Japan. For Morgan Solar and many other clean tech companies in Canada, the price on pollution will incentivize a market here at home for innovative, clean technologies.
4. Keeping up with a transitioning global economy
The global market for low-carbon goods and services is already worth over USD $5.8 trillion, and is projected to keep growing. Over 70 jurisdictions have put a price on pollution , including the European Union, India, California, and China. Not to mention even closer to home — Alberta, British Columbia, and Quebec had a price on carbon pollution before the federal system. Clearly this is charted territory with a successful track record.
Pollution pricing is even a Nobel-prize winning idea. The economist William Nordhaus recently won the Nobel for his work proving that putting a price on carbon pollution is the best tool we have to lower carbon pollution. Nordhaus has specifically pointed to British Columbia as a place that has gotten it right.
So while a price on carbon pollution is the best tool we have to help do our part to tackle climate change, it also helps us shift our economy to ensure that we are not left behind as the global economy transitions. Pricing pollution will only further boost Ontario’s already thriving clean tech sector and increase the province’s domestic market and competitive edge internationally.
5. Climate change affects Ontario and urgent action is needed
The planet is warming and Ontario is warming faster than the global average — the 10 warmest years on record have occurred since 1998. In recent years, Ontario has experienced several extreme events, such as the polar vortex we’ve felt the last few winters; the 2016 and 2017 Windsor floods; and the wildfires and heat waves of this past summer.
We’re seeing similar patterns worldwide. As the recent United Nation’s IPCC report made clear, we have just 12 years to make the necessary changes to limit global warming to 1.5 °C and head off the more extreme impacts. This will require slashing carbon pollution in half by 2030 and completely by 2050. While it’s clear we know the scale, scope, and urgency of the problem, what’s talked about less is that we know the solutions.
The federal government has taken a huge step toward showing it has the courage to tackle this issue and put a strong solution in place. The health of our planet – and of our children – requires nothing less of us.
About the author: Robin Edger is the director of Ontario Climate Policy at the Pembina Institute, based in Ottawa.