Ontario raises $526M as third cap-and-trade auction sells out
Published Wednesday, September 13, 2017 5:13PM EDT
Smokestacks and pollution from Arcelor Mittal's Dofasco mill in Hamilton, Ont. (Stephen C. Host/THE CANADIAN PRESS)
Ontario's third cap-and-trade auction has sold out of all allowances.
The September auction follows two similarly successful efforts in March and June, all of which are aimed at lowering greenhouse gas emissions in the province.
The government puts caps on the amount of pollution companies in certain industries can emit, and if they exceed those limits they must buy allowances at auction or from other companies that come in under their limits.
The first auction in March brought in $472 million and the June results show the second auction brought in about $504 million.
The government says the most recent auction brought in just shy of $526 million, bringing the total for the program to roughly $1.5 billion.
Revenues are being put toward green projects including retrofitting homes and putting fuel-efficient school buses on the road.
"Ontario needs a realistic approach to fighting climate change that balances affordability with action," Environment Minister Chris Ballard said in a statement. "That's why our plan, which puts a cap on the pollution businesses can release into the atmosphere and stimulates low-carbon choices, comes at the cheapest price possible for people and our economy."
The government said the auction saw 25,296,367 current allowances sell at a settlement price of $18.56 each, down slightly from the $18.72 per allowance recorded at the June auction.
Sales of future vintage credits continued an upward trajectory established in the second auction.
In addition to current allowances, bidders could also purchase credits for the year 2020. The government sold a quarter of future allowances at the first auction and roughly halt at the second, but said they sold out during the latest round of bidding.
The latest auction results put the province on track for the $1.8 billion the Liberal government expects to come from the quarterly auctions in 2017. Earlier this year, the government revised its projections downward for subsequent years, saying it expects about $1.4 billion annually, assuming the auctions sell an average of 80 per cent of allowances.
Since Jan. 1, cap and trade has added 4.3 cents per litre to the price of gasoline and about $80 a year to natural gas home heating costs, in addition to indirect costs that will be passed onto consumers.