Balsillie School of International Affairs Randall Wigle
School of International Affairs and School of Business and Economics, Wilfrid Laurier University
A number of provinces have either adopted or are considering climate policy options involving`carbon pricing.' Carbon pricing, i.e. internalizing the social cost of emitting carbon into the atmosphere, is the economically most efficient solution to fixing the environmental externality problem underlying climate change (Jae, Newell, and Stavins 2005). Depending on the stringency of targets and parameters of the policy regime adopted, such programs can generate a sizeable amount of revenue. As will be detailed below, revenues from BC's carbon tax and Alberta's Specified Gas Emitter Regulation (SGER) each generate revenues in the hundreds of millions. If the stringency of these measures is increased, the amount of revenue is likely to rise. The purpose of this paper is to evaluate alternative uses of government revenues from carbon pricing and to provide preliminary criteria for their assessment in the Canadian context.