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

2 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!

3 Focus: reduce urban GHG emissions

4 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

5 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

6 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

7 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

8 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, A strategic opportunity in Ontario