Ontario Audit Report Summary

Ontario Audit Report Summary

Problem

Ontario and its neighboring states Quebec and California have been trying to reduce greenhouse gas emissions. The Ministry of Environment and Climatic Changes has been the vital Ministry in leading the efforts in the reduction of gas emissions; the Ministry has set several Audit Plan initiatives towards the end of meeting the objective. Currently, the regulation to be implemented in 2017 geared towards gas reduction by 20% in 2020 (Wright 2018, n.p). The implementation will have negative repercussions for businesses as they will be required to pay cap and trade. The Ontario government ministries do not take climatic change as a crucial factor in decision making. The report seeks to analyze the background, concerns, and assessment of reports, strengths, weaknesses, summary, and recommendations of the climatic changes.

Background

Scientific studies indicate that global warming results due to the increased level of greenhouse gases in the atmosphere (Miller 2013, n.p).  Greenhouse gases are primarily a result of gas emitted from the burning of fuels, which increase the earth’s atmosphere. Combustion of an engine, natural gas power plants, decomposition of organic waste, fertilizer and animal manure, industrial processes and heating for commercial and residential results to the emission of greenhouse gases. Greenhouse gases include carbon dioxide, nitrous oxide, water vapor, methane, and ozone (Bockris 2010, n.p). Increased global warming has impacted negatively on the environment, such as high temperature, rise in sea level, melting of ice in the Polar Regions, and changes in weather patterns. In Ontario, most 62%, 4%, 10%, and 24% of electricity are generated from nuclear, wind, natural gas, and hydro, respectively (Mcfadden 2013, 4). Besides, the coal plant was closed in 2014. Therefore, burning natural gas using electricity contributes less greenhouse gas to the atmosphere. The use of solar energy, coal, and biofuels contributes less than 1% of greenhouse gases.

Current Concerns

There are various concerns about global warming and its impact on climate change. The environmental groups are concerned that the adverse effects on the climate are irreversible, and the issue has to be addressed (Noakes 2018, n.p). Ontario, greenhouse emissions globally is less than 1%; however, studies indicate greenhouse gas emission per person is more significant than in the rest of the world. The Ministry for Environment has pointed out that greenhouse gas emissions will affect the economy adversely, primarily due to extreme weather conditions (Amini 2019, n.p). The Ministry will be tasked with putting guidelines on how to reduce the gas emissions; the law of Mitigation and Low-carbon Act of 2016 will be effective in 2017. The bill will affect business, and they will receive allowances according to tonnes of carbon dioxide emitted into the atmosphere. The business will be forced to find effective ways to minimize carbon dioxide emissions to enjoy the allowances from the government; business California and Quebec will incur additional costs if they fail to comply with the new environmental regulations from 2020. The Ministry of environment targets to reduce gas emissions to less than 20% by 2020. However, there are concerns greenhouse gas emissions may increase in 2020 rather than decline. The provinces from Ontario have not made formal agreements to achieve the objective of the Ministry of Environment by that time.

Assessment of the Report

The audit report had wanted to assess whether the Ministry has put in place effective, timely, accurate measures to mitigate greenhouse gases. The report was concerned to determine whether the government had similar measures to curb the effect of greenhouse gases. Lastly, the report wanted to determine the short-term and long-term strategies put in place to minimize the effect of global warming.

The Ministry of Environment and Climate Change has provided unrealistic assumptions to achieve its goal of carbon-dioxide reduction by 2020. The Ministry expects a decrease in electricity prices; however, there is a likelihood the electricity prices will rise due to cap and trade. Cap and trade are the additional cost that firms will incur due to gas emissions; otherwise, miss of government allowances. The businesses are likely to pass additional production costs to consumers by increasing the selling prices. Consumers may prefer to switch to using inexpensive natural gas, leading to an increase in greenhouse gases. The Ministry does not have a plan of having more renewable natural gas. The revenue collected from cap and trade is expected to help distributors to produce biogas. The firms may decide to allocate the funds for other business purposes rather than provide natural gas. The government does not prioritize the greenhouse gas actions if their plans; it will be challenging for the Ministry to achieve its goal of greenhouse gas reduction plans without the support from the government. The Ministry did not implement some recommendations of the “2011 Adaptation plan” and unlikely whether it will achieve the 2020 plan.

Major Strengths

There are main strengths associated with the reduction of greenhouses gases. Ontario has the least contribution to global warming in the world. It means appropriate measures are already in place to check the greenhouse emissions. Ontario conducts an audit for environmental changes, and other states do not perform such an audit. The Ministry implements the recommendations of the auditor and has significantly reduced the gas emission. In Ontario, most of its electricity comes from nuclear power, which has less emission of greenhouse gases. The country closed the coal industry in 2014 and led to the reduction of gas emission. The Ministry achieved its target to reduce gas emission for 2014, and there is a likelihood they achieve their goal of 2020. The provinces of Ontario are all considering implementing the Ministry recommendations by 2020. The Ministry will be collecting cap and trade revenue that will have an effect of improving the company and force the businesses to comply with the requirements of the law.

Weaknesses

The move to reduce greenhouse gas emissions will face various challenges. The government ministries do not prioritize climatic changes as a significant concern in their decision making. Lack of support by the government ministries will make the work of the Ministry of Environment and Climatic Changes harder in reducing greenhouse gases. The Ministry cannot substantiate the figures they have suggested. For instance, the methods used to arrive at the number of cap and trade to be collected in 2020 (Chang 2009, 8). The Ministry achieved the 2014 plan mainly due to closure of coal plant and economic recession; in 2020, it remains doubtful whether the Ministry will make its plan of reducing greenhouse gases. After the implementation of the bill in 2017, businesses will be required to pay cap and trade, and to get government allowance will be hard. The move will likely increase the cost of production, and the added costs will be passed to consumers. Consume’s will seek an alternative, cheaper form of energy that may add more greenhouse gases to the atmosphere. The implementation to be successful it will require coordination of three provinces of Ontario; lack of support from one of them may negate the likely benefits to be achieved after the implementation of the program. The Ministry failed to implement some recommendations of 2014; it is doubtful whether the 2017 program will be fully implemented. Lastly, the citizens of Ontario are the leading contributors to greenhouse gases, and it will be challenging to control the individual gas emission.

Risks

The agreement will make it possible for a business that has received government allowance for gas emission can transfer it to another company in the other province. Only one trade allowance will be given to a business; however, if trade allowance can be transferred to another company in a different jurisdiction, there is a possibility of business to claim more than one allowance. The Ministry on its program of 2004 had an objective to divert 60% of non-hazardous waste; less than 30% has been diverted so far (Bilitewski and Christoph 2013, 1047). The reduction could result in a reduction of greenhouse gases. The failure of the Ministry has an effect of increasing greenhouse gas emissions rather than reducing it. The emissions of greenhouse gas rules are only in Ontario, Quebec, and California and do not apply to other states; reduction of gases within the region will have an insignificant effect on global warming.

Overall Summary

Global warming is caused by greenhouse gases, which include carbon dioxide, methane, nitrous oxide and ozone. Greenhouse gases have an effect of increasing the atmosphere temperature, changing the weather conditions, rise in sea level, and melting the polar ice. Environmental groups are raising the flags for the need to address the global warming menace since its effects are irreversible. The Ministry of Environment and Climatic Changes in Ontario has advocated the need to reduce global warming because of its harmful consequences to the economy and harsh weather conditions. The Ministry has drafted a regulation to be implemented in 2017 geared towards reducing greenhouse gas emissions by 2020. Once the rules have been introduced, it will affect businesses because of cap and trade, leading to additional costs.

Recommendations

The Ministry should coordinate with the federal government while setting its environmental policies and consider the interests of its residents. The public should be updated on the progress of the Ministry at least once annually and explain specific ways to reduce gas emissions. Besides, the Ministry should report on the impact of cap and trade to businesses. In 2020, the Ministry should inform the public of the difference between actual and projected reduction in gas emission. The Ministry should design effective ways of measuring the allowances and ensure no company claims more than one. Besides, the Ministry should oversee the reduction in gas emissions is accurately measured across the jurisdictions. The Ministry should estimate accurately the impact of cap and trade supported by logical assumptions. The government ministries should consider the Ministry initiatives and support them. The government to be transparent it needs to disclose to its citizen the amount charged in cap and trade in their bills. The Ministry should review and revise its Action Plan to ensure they will meet the objective of reducing the gas emissions within a given time frame.