The Ontario Liberals are doing every possible thing wrong with their climate plan

Here’s an interesting problem in applied economics: If you’re a provincial bureaucrat running a cap-and-trade system to control carbon emissions, should you also do things like ban the use of natural gas for heating new housing and subsidize electric vehicles?

The question is not academic. Ontario is on track for a cap-and-trade system for carbon emissions starting Jan. 1. But, according to leaked planning documents, it also intends, among many other things, to induce or compel a significant part of the population to switch to electric cars by 2024 and ban the use of natural gas in new houses by 2030.

So what’s the right answer? You might think: “Sure, why not? The more carbon reduction the better.” You would be wrong. If you’re a savvy bureaucrat, avoiding command-and-control measures like banning things is the very reason you go for cap and trade. Moreover, adding command-and-control to your policy mix can defeat the purpose of cap and trade...