Carbon pricing: a key mechanism to drive down urban GHG emissions

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Mandate: Advance local solutions to climate change and air pollution.

Tools: •$23M endowment•Grants•Impact investing•Innovate, demonstrate & de-risk policies, programs, technologies•Small, motivated team!

Low-Carbon “Skunk-Works”

Toronto’s GHG reduction targets: 6% by 2012, 30% by 2020, 80% by 2050 (from 1990 level)Best-kept secret: down 20% by 2011!

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Focus: reduce urban GHG emissions

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Carbon pricing: key design principles

Effective•Adequate price signal to achieve desired reduction•Broad reach throughout the economy•Predictable to support planning/decision-making by affected parties•Continuous improvement (e.g. periodic reviews)

Efficient•Low transaction costs•Easy and speedy to implement•Synergies and complementarities with other GHG reduction measures

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Carbon pricing: key design principles

Beneficial•Clear benefits/value for the public and wider economy•Fair and equitable -- doesn’t burden vulnerable populations, doesn’t disadvantage local players or early-adopters

Transparent & Accountable•Clarity re: who pays•Clarity re: where the revenues go•Clarity re: who makes decisions and how•Rigorous application

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Carbon pricing: Design Options

• Cap & trade traditionally limited to large emitters…not many in cities

• Cap on bulk fuels -- gasoline, natural gas – like Califorina and Quebec would cover most urban sources

GHG impact depends on reach and signal strength• Carbon fee reaches all

sectors of the economy• Strategic pricing tools

can target key sources, eg: increased Gas Tax; shadow price (adder) in gas conservation planning; vehicle fuel efficiency feebate

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Comprehensive plan to enable results

• Buildings – efficiency through codes and standards, “all cost effective conservation” and local employment

• Waste – more diversion, ie: ICI waste

In addition to carbon pricing, Ontario’s climate strategy must ensure cities can be key contributors to achieving local and provincial GHG reduction targets.

• Transportation – transit and active transportation investment, planning requirements

• Local, low-carbon energy systems and generation

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TAF is undertaking analysis, financing initiatives to advance a robust Ontario climate change

plan, and advocating smart, city-focused policies that will help Toronto achieve it’s GHG

reduction targets, recognizing that unless urban emissions are dramatically reduced, the

province cannot meet it’s targets. For more information, contact.

Julia Langer, CEO, jlanger@tafund.org

A strategic opportunity in Ontario