Cap, trade poses critical choices

February 16, 2016

By: Chronicle Journal

In the next couple of weeks, Ontario’s government will propose rules to “cap-and-trade” greenhouse gas emissions in the province. Depending on how these rules are written , we will either:

See our economy become more efficient and sustainable for the long-term by leveraging one of Ontario’s greatest renewable resources — our forests, or

Quickly become uncompetitive in global markets and lose thousands of green jobs in Northern Ontario.

Having consulted closely with the individuals at Queen’s Park who are drafting the rules, we are hopeful the right path will be taken.

However , because the consequences of getting this wrong are so high we felt it important to share three key issues that are now on the table:

• First, Ontario must take credit for the province’s early progress in reducing carbon dioxide and other greenhouse gas emissions. If we don’t, we end up penalizing ourselves for our leadership — and rewarding other countries for being environmental laggards.

For example, companies such as Domtar are already meeting the government’s emission reduction goals for 2030, thanks to major efficiency investments made in the past 15 years.

Not claiming credit for this would put Ontario at a self-inflicted competitive disadvantage with other economies around the world that are only now just beginning to focus on the climate change challenge.

Of course, if the province takes credit for these reductions, then so too should the companies that delivered those reductions.

• Second, Ontario must guard against the perverse effect of increasing net global greenhouse gas emissions that occurs when regulations go too far too fast and drive production of commodities like pulp and paper overseas.

Consider our industry in North America, where our greenhouse gas emissions per ton of paper produced are half that of the average Asian paper mill. It would be a double tragedy if the government’s rules do not recognize this trade exposure — risking the 200,000 forestry sector jobs in Ontario, and potentially increasing global greenhouse gas emissions at the same time.

• Finally, Ontario needs to avoid scenarios in which the province’s most renewable companies end up having to pay the heaviest users of fossil fuels in order to stay in business.

Unless the government is careful in how it writes the rules, Ontario’s pulp and paper sector, which is already meeting approximately 80 per cent of its energy needs with renewable biomass fuels, could end up having to do just that.

We appreciate the government’s expressed interest in keeping Ontario’s pulp and paper industry competitive — not just for jobs today, but because we have the infrastructure and the know-how for creating the next generation of sustainable bioenergy refineries.

But now, as the rule writers are finishing their work, we urge all Ontarians to take notice and make sure the choices the government makes to reduce greenhouse gas emissions are the right choices. Because when it comes to reducing greenhouse gases, the “how” matters as much as the “how much.”

David Struhs is vice president corporate services and sustainability at Domtar which operates the Dryden pulp mill.

By: Chronicle Journal

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