Emissions Trading in Ontario and Preventing the Impacts of Climate Change

Emissions Trading in Ontario
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Introduction
From the last couple of years, the world has noticed a significant change in the climate. The difference is increasing at an alarming rate every year. To prevent this, the central authority has introduced a market-based approach to controlling the pollution of the earth's atmosphere by emissions. The measure in topic is called emissions trading, popularly known as cap and trade (CAT). Since CAT is a flexible environmental regulation, in 2018, the government of Ontario revoked its involvement in the emissions trading scheme. In Ontario, the system focused on reducing the amount of emitted greenhouse gas by regulating the amount of pollution that companies in specific organizations could emit. This paper argues in opposition to prove the validity of the claim that Ontario should continue being part of the cap and trade program due to the numerous benefits of the system, as discussed in the following analysis.
The first point opposing Ontario's decision is that the primary purpose of the emissions trading system is to lower greenhouse gas emissions. This is because the system works by setting a maximum amount of carbon emitted. Therefore, to reduce the expenses or even eliminate them, companies, utilities, businesses, and individuals try to use less energy obtained from fossil fuels (Barr & Dominici, 2010). The system encourages an individual to use public transportation and replace his or her incandescent bulbs to compact fluorescent bulbs. For a business, cap and trade will improve its energy efficiency by making its owners install new or update the heating and cooling systems. A service firm will adhere to the requirements of the program by acknowledging the use of wet scrubbers, low NOx burners, or adopting gasification to lower their pollution. Equally important, and one of the best reasons why the province should be part of the system is that since taxation creates a standard price of carbon, there is an expected fixed profit on expensive efficiency investments.
Secondly, cap and trade will increase Ontario's and the whole of Canada's economy through the global carbon market. Research states that annual businesses on the global carbon market yielded a total of $92 billion (Ezroj, 2010). Various countries sealed the contracts on several grounds, including compliance and risk management. With the rapidly increasing adoption of cap and trade programs to cover more than the existing economic sectors, regions, cities, and countries, the global carbon market continues to grow gradually. Although the data is not entirely accurate due to some limitations, if all developed countries around the world adopted the cap and trade program, the market is projected to grow by 200%. In the wake of the information, since allowances are the basic units of trade in the global carbon market, a single allowance offers a compliance entity for an equivalent amount of carbon or Carbon dioxide emitted. Cap and trade allow a compliance entity to exceed the standard amount of emission, considering its current amount of allowances meets the requirements of the entity (Hahn & Stavins, 2018). Additionally, emissions trading enable compliance entities to find affordable methods of reducing their emissions, hence allow compliance entities to reduce the amount of money spent on purchasing allowances.
Thirdly, cap, and trade will fuel the creation of alternati...