If the Cap-and-Trade Charge Is Not a GHG Emissions Tax, Then What Is It?

If the Cap-and-Trade Charge Is Not a GHG Emissions Tax, Then What Is It? Banner Image

When the cap-and-trade charge was added to Ontario consumers’ bills for fuel at the pump, electricity, and natural gas, the public reacted like it was another tax. This is understandable because it looks like a greenhouse gas (GHG) emissions tax. Fuel suppliers, electricity importers, and natural gas distributors do not show the cap-and-trade charge as a separate line item like the HST (harmonized sales tax), but consumers have been paying this additional cost since January 2017. It is not shown because the distributors wanted the cap-and-trade charge buried in their delivery charges. If it were easily identified, then at a minimum it would have informed consumers that the government is dealing with the cost of climate change. But, it is more complicated than that.

Is a Carbon Tax the Same as Cap and Trade?

Is a Carbon Tax the Same as Cap and Trade? Image

There is a lot of confusion between cap and trade (C&T) and a carbon tax. This is understandable because it is all newly mainstream since the Paris Agreement in 2015. Moreover, both terms are related to emissions reduction. This blog will clarify the difference.

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