A 45-day consultation period will see town hall meetings held across the province and people can give feedback online and through social media.
The government says the discussion paper will inform the government's decision — expected to come this spring — on which carbon pricing mechanism to adopt.
The Liberal government committed to carbon pricing in 2008 when it signed the Western Climate Initiative with California and Quebec, which have since created a joint cap-and-trade system.
Ontario could adopt a cap-and-trade system that lets the worst polluters buy credits from companies that burn less fossil fuels, or impose a tax on all carbon emissions, including gasoline burned by automobiles.
Environment Minister Glen Murray would not commit to making a carbon pricing plan revenue neutral for the government.