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

The Competitiveness of a Trading Nation

Carbon Leakage and Canadian Climate Policy

This concern must be kept in perspective given that the sectors truly vulnerable to competitiveness concerns represent a small percentage of overall GDP in most countries, including Canada. Policy makers must pay careful attention to how vulnerable sectors are identified and design appropriate policy measures to protect those who legitimately require it while still achieving environmental goals.

Key Messages:

Resource for the Future: Moving U.S. Climate Policy Forward

The key theme of this report is that welfare costs depend on how policies interact with distortions in the economy created by the broader fiscal system. The main medium-term options that this paper focuses on include carbon taxes and cap-and-trade systems applied economy-wide and to the power sector only, and an emissions rate standard for power generation.

Carbon Pricing, Climate Change, and Fiscal Sustainability in Canada

Canada faces structural fiscal challenges, including rising health care costs and a declining tax base arising from the aging population. Governments will be forced to make difficult fiscal decisions, involving restraints on expenditure growth, higher rates of taxation or greater government borrowing. Carbon pricing can provide governments with a significant new revenue source that could help address these fiscal challenges, as well as contributing to the achievement of greenhouse gas (GHG) reduction goals.

Business, Risk and Carbon Pricing

This study also researched the factors behind these preferences. It found that the analytical framework utilized by business officials to determine policy preferences focused on risk management and not cost minimization. Three implications of this finding are discussed in detail: first, organizational survival is a key objective of business-government relations; second, investor confidence and policy certainty are significant factors in policy preference development; and, finally, subjective factors, such as the personal experience and beliefs of key officials, also influence corporate preferences. The report finishes with recommendations for future policy directions.

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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.