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On February 24, 2016, the Province of Ontario in Canada introduced the Climate Change Mitigation and Low-carbon Economy Act (the “Ontario Climate Act”). The next day the Province released its Cap and Trade Program Regulations (the “Regulations”). The Act and the Regulations will undergo a 45-day public and stakeholder comment period. If passed into law, this legislation would formally establish a cap and trade program in Ontario, adding Ontario to a growing roster of municipal, provincial, federal, regional, and international regimes that have embraced the cap and trade system as an instrument choice for combating climate change. The cap-and-trade program is expected to come in force on January 1, 2017.

In this short working paper, Dr. Damilola Olawuyi, the Sabin Center’s Spring 2016 David Sive Visiting Scholar, assesses the proposed Act in relationship to some of the essential requirements of a robust cap-and trade system, including: effectiveness; comprehensiveness; transparency and fairness; and offset eligibility. Moreover, in the vein of the Center’s ongoing work on human rights and climate change and Dr. Olawuyi’s current research on corporate responsibility to address the human rights impacts and climate change mitigation and adaptation, Dr. Olawuyi argues that the efficacy of the proposed legislation will be further enhanced if it is infused with procedural and accountability safeguards to address human rights risks and questions that will inevitably arise in carbon offset projects. The paper suggests that the legislation, and its accompanying regulations, should establish inspection panels and dispute resolution mechanism through which emission reduction actions and projects that violate existing environmental and human rights laws and norms can be identified and screened out from credit trading.

Read the working paper here.

2 comments

  1. The paper is a classical exposition of the Ontario Climate Act and its accompanying regulations. The issue of climate change, business and human rights are issues that concerns humanity. The article, unsurprisingly, coming from a rising scholar in environmental law and policy and sustainable development, further brings to fore the concerns surrounding corporate responsibility and their inherent ‘duty’ to protect human rights in their spheres of operation. It recommends a much needed dispute settlement mechanisms for conflicts between companies and stakeholders. It is indeed a thought provoking masterpiece and a successful attempt at addressing recurring climate change concerns.

  2. I commend Dr. Damilola Olawuyi for his insightful and very timely evaluation on the Ontario Climate Act, which establishes the province’s cap-and-trade program. As he keenly notes, in order for Canada to fulfill its climate targets pursuant to the Paris Agreement, robust climate action from Ontario, its most populous province, is crucial. In this regard, Ontario’s cap-and-trade scheme must be designed so that it simultaneously secure society’s aspirations for economic prosperity, environmental protection and social justice. His recommendation that procedural and accountability safeguards be incorporated into the Ontario Climate Act to ensure that environmental and human rights laws are complied with precisely ensures that such societal aspirations are achieved.

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