In addressing climate change, a solid consensus has emerged on the importance of placing a price on emitted carbon, whether through a tax or cap-and-trade system. Our work focuses on designing a carbon pricing policy and market models that are pragmatic and workable.

Top Policy Research Priorities
  • Design of Carbon Pricing Systems
  • Carbon Pricing and Low-Carbon Technology
  • Impacts and Effectiveness of Carbon Pricing
  • Carbon Pricing Governance, Revenues Management and Interjurisdictional Issues
  • Carbon Pricing, Innovation & Productivity

Ontario Carbon Pricing Briefing Notes

With renewed interest in climate policy – driven by the Paris climate meetings in December and increased focus from provincial governments on climate action - Sustainable Prosperity has prepared two briefing notes summarizing the state of knowledge and practice on carbon pricing.

Carbon Pricing and Mind the Hissing

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.

The Political Economy of California and Québec’s Cap-and-Trade Systems

This report aims to improve understanding of the political and economic factors that have led to the adoption of a linked cap-and-trade system in California and Québec. California has committed to reducing its emissions to 1990 levels by 2020 while Québec has committed to reducing emissions 20% below 1990 levels in the same time period. In their electoral programme the Parti québécois, which has formed a minority government in Québec since the 2012 provincial election, expressed a commitment to a 25% reduction.

Issue Summary: Gains from (Cap and) Trade

January 1st, 2014 marked not only the beginning of a new year, but also the beginning of a new era of carbon policy in North America. For the first time, Quebec and California committed to using market-based instruments to reduce GHG emissions by officially linking their cap-and-trade systems.

This Issue Summary examines the mutual economic benefits that can be gained from the adoption of linked systems between distinct jurisdictions.
Key Messages


Low Carbon Economy

Low Carbon Economy

About the Project

The goal of this project is to shed light on the relationship between economic activity and the environment by exploring the linkages between changes in our natural capital and our measures of productivity generally, and through the construction of an environmentally adjusted measure of productivity specifically.

While it is now commonly accepted that economic activity and the state of our environment are linked, many economic measures still fail to incorporate the environment – both the things we draw from it and the pollution we release into it. By developing and calculating measures of productivity that include natural capital, Canada may be able to better understand these linkages. This, in turn, may lead to the identification of strategies that can help Canada become more efficient and innovative in the use and protection of natural capital, and thus more productive and more prosperous.

Using the forestry sector as a case study, this project aims to construct an environmentally adjusted measure of multifactor productivity. In doing so, we aim to add another layer of understanding to the environmental and economic performance of this sector. The proposed measure will have relevance to the Canadian economy as a whole.