What is Cap and Trade and What Does it mean for Peterborough?

Cap and trade is a regulatory policy that is being proposed to help lower greenhouse gas emissions in Ontario.

To make cap and trade easy to understand, we have developed an analogy.

Imagine you were given a set amount of permits that allow you to place a certain amount of garbage to the curb every week.  Let’s say you receive 3 permits every week and are allowed to tag 3 bags of garbage.  BUT – If you had 4 bags of garbage one week, you would pay a hefty fine.

This is the “cap” piece of cap and trade.


However, if you reduced your garbage to fall below the “cap” and only placed 1 bag of garbage to the curb, the policy encourages you to sell your extra garbage permit to other neighbours who might have more garbage than you.

This is the “trade” piece of cap and trade.

In theory, this policy would help encourage the entire street to find innovative ways to reduce their garbage, and generate a competitive market for the garbage credits. In theory, the policy rewards families that reduce their garbage and punishes families that pollute more. Individuals would “pay to pollute”.

As the years pass, the idea is that the number of garbage permits given out to each household would be reduced from 4 to 3 , from 3 to 2, and so on to give people time to adjust to the changes.


Where it gets more complex is the introduction of “offset credits”. Offset credits would excuse a big family from paying fines…Just because they naturally produce more garbage. More people = more garbage, after all!

In this case, a family would be allowed to invest in other #green projects, such as tree planting or investing in renewable energy. This, in theory, would help balance out the extra garbage that a family produces.

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On a much larger scale, the Ontario Government is looking to develop a cap and trade program for the province that would place a cap on greenhouse gas emissions. The province has consulted with over 700 stakeholders about the policy. Right now, they are determining offset credit rules and regulations.

This relates to the Peterborough Climate Change Action that is being implemented as the proposed policy will have an impact on us locally. Each #PTBO resident has a role in speaking up about the policy (whether for or against) by clicking here.  Here are some facts about how it can affect Peterborough:
(Credit: Sustainable Peterborough)

You can submit a comment until December 30th 2016…

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