![]() Moving Canada toward deep emissions reductions over time contributes to global efforts to avoid some of the costliest and most uncertain impacts of climate change. Not just this year but every year going forward. We focus on two key outcomes that should drive Canada’s climate policy.įirst, we should be aiming to reduce our annual greenhouse gas (GHG) emissions. WATCH: Carbon pricing is the solution to climate change that makes sense for both the environment and the economy. What does “working” mean for carbon pricing? Where has carbon pricing worked? Why does carbon pricing work? When does carbon pricing work? Who supports carbon pricing? How do policies put a price on carbon? We provide clear answers to these questions in simple, (mostly) jargon-free language. And it doesn’t require governments to identify specific ways to reduce GHG emissions. It lets businesses and individuals identify the best ways to reduce their GHG emissions and at the times and places that are right for them. It achieves these goals by changing incentives and unleashing market forces. Together, this means carbon pricing can support both a clean economy and a prosperous one. ![]() In addition (and this point is also often overlooked), carbon pricing will achieve these outcomes at a lower economic cost than other policies. And higher carbon prices drive deeper emissions reduction. The evidence is clear: carbon pricing shifts us away from "business as usual," changing our emissions trajectory. And we’ve looked at the other climate policies that work best with carbon pricing.ĭone right, carbon pricing changes household and business behaviour, reduces GHG emissions, and drives the development and adoption of the technologies that will play a key role in a low-carbon economy. We’ve considered the best ways for governments to recycle revenues generated from carbon pricing. We’ve explored how to design policy for fairness, and how to design it to ensure Canadian businesses remain competitive. The Ecofiscal Commission has undertaken extensive economic research exploring these details, some of it fairly technical. The many details of carbon pricing are important for governments to consider when they design good policy. In short, we need a more informed conversation about carbon pricing. How we design these policies will influence how we live and how we do business. This really matters because carbon pricing affects us all. Governments and policy analysts (including here at the Ecofiscal Commission) haven’t always done a good enough job explaining carbon pricing to Canadians. And there is strong evidence, grounded in solid economics and policy experience, that carbon pricing works. While free trade and balanced budgets might now be broadly accepted, they were once controversial ideas.īut debates will support good policy decisions only if they are based on facts and evidence. Historically, significant shifts in the consensus around policy emerged only after vigorous public discussion. Such policy debates are healthy and necessary. And elections are on the horizon, both nationally and in several provinces, in which carbon pricing could be a source of debate and even a key issue. Yet recently, others have questioned the extent to which carbon pricing will affect GHG emissions. Various economists and policy experts have made the case for carbon pricing as the best way to reduce GHG emissions while maintaining a strong economy. That growing consensus around carbon pricing, however, is not yet universal. And the federal government is now committed to filling in the remaining policy gaps-by requiring every Canadian province and territory to put a price on carbon by the end of 2018. Several large provinces have already introduced well-designed carbon-pricing policies. They want to do their part and contribute to these efforts.Ĭanadians are also moving closer to agreement on how we should tackle these challenges. Canadians do not want to "free ride" on the actions of others. Despite its relatively small population, Canada has a role to play in the global efforts to reduce greenhouse gas (GHG) emissions to avoid the worst of these risks.
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