InSights

Using time-series econometric analysis, it is expected that the greenhouse gas emissions from the covered sectors is likely to decrease from 340.3 MMTCO2e in 2015 to 322.4 MMTCO2e , 309.9 MMTCO2e and 297.5 MMTCO2e in 2020, 2025 and 2030 respectively. It is expected to decrease at a higher rate post-2020 keeping macro economic growth, industrial growth rate, technological advancement and proposed sector specific emissions reductions target in mind. The joint California-Quebec-Ontario allowance market is expected to remain oversupplied through 2020. Annual surplus turns into annual shortage in 2019, but average allowance prices move significantly away from the floor only after cumulative allowance shortage comes into play. With cumulative shortage in the range of 396 to 811 million tons, the 2030 allowance price is expected to significantly exceed the reserve price (US $30.77), in the range of US $91 to US $111 under different emissions and supply scenarios. Ontario is expected to face annual shortage from 2018 onwards and thus expected to be a net importer of compliance instruments from the other WCI members