Ontario considers use of cap-and-trade auction revenue for forestry

Ontario introduced Cap-and-Trade legislation today. The details can be seen on a dedicated website.

On offsets, the supporting discussion paper states "The experts indicated strong support for project types in agriculture, forestry and waste management and priority be given to landfill gas, wastewater treatment, manure management, including anaerobic digestion, and afforestation/reforestation project types. "

Of greater interest to me, is the suggestion that auction revenues could be used to achieve emission reductions through such activities. I've been thinking for some time that this type of approach would be preferable to offsets because it would avoid the additionality problem:

"Ontario recognizes that although some of the agricultural and forestry related activities may not be initially feasible for an offsets approach, such as urban forestry and native grasslands, they represent important forms of bio-sequestration that offer multiple environmental benefits to Ontarians. Benefits include improved adaptive capacity for climate change, biodiversity preservation, improved water quality and improved wildlife habitat. These activities could be supported in other ways, such as using a portion of the allowance value (e.g., auctioning revenues or a set aside) under a Cap-and-Trade system (see section 2.2). This approach has been taken in recently proposed U.S. climate change legislation (e.g., WCI, Waxman-Markey, Lieberman Warner). Ontario also recognizes that some of the initial challenges and complexities facing some agricultural and forestry-related activities will be resolved over time as various offset systems gain experience and as these types of activities are further integrated into future international climate change agreements."