Ontario's environmental markets : Creating price signals to protect our natural environment

Although traditional markets (meaning the markets in which goods and services are sold every day) work very well to establish prices, these prices do not always fully reflect the inputs used in the production of what is being bought and sold (particularly ecosystem goods and services as inputs) or the full environmental impact of the production, use and disposal of the goods or services. [...] I ncluded in this category are markets in which a payment is made for conserving land for the protection of biodiversity (such as the Ontario Species at Risk Stewardship Fund) or for valuing clean energy sources (such as the trading of renewable energy certificates.) In both examples, market participants treat the environment as an asset, and create a value for the environmental benefits of the go [...] As such, when defining the operating details of the upcoming cap and trade system for GHGs, policy-makers would be wise to look at both 1) the design features of the individual system, drawing lessons from the SO2 and NO system, and 2) the ways in which the GHG emission trading system can be made complimentary and additional to existing regulations. [...] Designers of a future provincial carbon-pricing scheme could consider the integration of voluntary carbon offsets as a compliance mechanism and as a way to accelerate and support the development of clean innovation42 in the province. [...] Under the new Great Lakes Protection Act — passed on October 2015 — the Minister of the environment can set targets to restrict the amount of phosphorus entering the lakes.53 As a way to meet these targets, WQT schemes could be established in the watersheds that carry phosphorus to the lakes.