Ontario Generates $472 Million from the First Auction of Greenhouse Gas Allowances

April 4, 2017 | Nivedhya (Nivi) Ramaswamy

On April 3, 2017, the Ontario Ministry of the Environment and Climate Change (MOECC) announced the results of the first auction of greenhouse gas (GHG) allowances, held on March 22, 2017.

The results signal a strong start to North America’s newest carbon market with 100% of available current (2017) allowances sold at a settlement price of $18.08 and 26% of available future (2020) allowances sold at a settlement price of $18.07. The auction generated approximately $472 million in proceeds. The revenue generated will be invested in programs that will help Ontario achieve its GHG emission reduction target of 80% below 1990 levels by 2050, in accordance with its Climate Change Action Plan.

The auction was administered by the Western Climate Initiative, with oversight from an independent market monitor to ensure market integrity. Capped participants accounted for the majority of the sales, i.e. 99.1% of current allowance sales and 100% of future allowance sales.

Several large emitters are currently receiving free allowances until 2020 so as to discourage them from moving to jurisdictions with less stringent climate policies, which can lead to a rise in global GHG emissions, a phenomenon termed as “carbon leakage”.

Next steps

There are 15 more auctions scheduled in the current compliance period which ends in 2020. The next auction is on June 6, 2017. Ontario is expected to link its cap and trade market with Québec and California in 2018.

For more information, please refer to our overview of the Cap and Trade Program in our November 2, 2016 Special Edition of EnviroNotes!

Contact the lawyers at Miller Thomson for more information on how your business may participate in Ontario’s Cap and Trade Program.


This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

Miller Thomson LLP uses your contact information to send you information electronically on legal topics, seminars, and firm events that may be of interest to you. If you have any questions about our information practices or obligations under Canada's anti-spam laws, please contact us at privacy@millerthomson.com.

© 2023 Miller Thomson LLP. This publication may be reproduced and distributed in its entirety provided no alterations are made to the form or content. Any other form of reproduction or distribution requires the prior written consent of Miller Thomson LLP which may be requested by contacting newsletters@millerthomson.com.