Can we improve the efficiency of carbon pricing and regulations?
The release of our final report yesterday highlighted Canada’s options for bridging the gap to its 2030 targets. Bottom line? There are only a finite number of approaches. We have regulations, subsidies, and carbon pricing. But the details of how governments design and implement those policies matters just as much […] More
Introducing TIER – Alberta’s new approach to pricing industrial GHG emissions
Yesterday, the government of Alberta unveiled the details of its planned Technology Innovation and Emissions Reduction Regulation (TIER for short). TIER will put a price on industrial GHG emissions in the province, replacing the previous government’s Carbon Competitiveness Incentive Regulation (CCIR). How does the policy design stack up? In this […] More
Reducing environmental risks from mining in British Columbia
Next month marks the five-year anniversary of the Mount Polley mining disaster. On August 4th, 2014, a dam at the mine ruptured, releasing 24 million cubic metres of water and mine tailings into several lakes and rivers in British Columbia’s Interior. We have written before about how putting a price […] More
The worst kind of climate policy is an uncertain one
Smart policy can help Canada reach its GHG emission targets with minimal economic costs. But even if we use the most economically-efficient tools available, there’s a factor that can still increase costs: policy uncertainty. When the direction of future climate policy is unclear—or worse, when policy reversal is a significant […] More
No, Canada cannot get credit for its low-carbon exports
The federal government has recently announced that it intends to seek credit toward Canada’s emissions reduction targets for the GHG-reducing effects of Canadian exports. It argues that supplying Canadian clean energy such as liquefied natural gas (LNG) can reduce other countries’ emissions by displacing more emissions-intensive energy sources such as coal. […] More
Switching GHG accounting systems is not a solution
Is Canada’s greenhouse gas emission problem just an accounting issue? Is the GHG measurement system used by the UNFCCC fundamentally flawed, unfair to Canada, or both? Would switching systems make achieving our targets easier and solve concerns around emissions leakage? Short answer: not so much. The status quo: “territorial-based” GHG […] More
Arguments for and against “supply-side” climate policies
Our April blog about supply-side climate policies generated some online discussion. Some comments focused on the bigger, global picture. Others focused on the nuts and bolts. In particular, we got questions about our “leakage” assertion—namely, that if Canada cut back its production of fossil fuels there would just be an offsetting […] More
Climate Roulette: Getting to the heart of the climate challenge
‘An ounce of prevention is worth a pound of cure.’ It’s a cliché, but it holds an important lesson for climate change. So far in our blog series on climate risk, we’ve talked about the severity of the risks we face, what those risks mean for us, and how we […] More
Up in the Air: A look at Ontario’s new climate policy
After coming to power, Ontario’s Progressive Conservative government got right to work on climate policy. Over the last six months, they've dismantled the province’s cap-and-trade program, loosened the province’s emissions targets, and taken the federal government to court over the carbon-pricing backstop; all the while, we were told a new plan was […] More
Cleanup liabilities in Alberta’s oil patch: Risks vs. costs
Last week, a news story broke with an eye-grabbing headline: Cleaning up Alberta’s oil patch could cost $260 billion. This figure massively exceeded the provincial regulator’s official estimate of $58 billion. Reading a little further down revealed some key details. First, the $260 billion was — according to the Alberta Energy […] More
The diaper dilemma
Let’s talk about diapers. Like many new parents, I’m struggling: cloth or disposables? On the one hand, I want to go with the more sustainable choice. But on the other, I’m wondering why I should even have to think about it at all. Why can’t the environmental impacts of cloth […] More
Pricing risk to the environment works best when it’s fair
Our latest report Responsible Risk explains how putting a price on risk to the environment can make disasters less likely. The report shows how we can use economic tools to strengthen companies’ incentives to manage environmental risks posed by their operations. In this blog, I’ll discuss why when it comes […] More
A missing piece in the oil transport debate
Concerns about the environmental risks from oil transport are a key aspect of the debates about energy infrastructure in Canada. Pipelines pose risks of spills and so do tankers. At the same time, the recent five-year anniversary of the tragic Lac-Mégantic derailment reminded us of the risks that come with […] More
Tread Carefully: Ontario’s cap-and-trade system meets a fork in the road
Ontario elected a new government yesterday, and as far as carbon pricing is concerned, change is afoot. The province’s cap-and-trade system is working well, but the incoming Progressive Conservatives have signaled their discontent with the status quo. In this blog, we’ll look at their options—everything from leaving the WCI entirely […] More
Do OBAs make sense for the electricity sector?
Governments in Canada are using Output-Based Allocations (OBAs) to address leakage in emissions-intensive and trade-exposed (EITE) sectors. As I discuss here, there are strong arguments for using OBAs in EITE sectors. But governments are also looking at using them in the electricity sector, which is typically not considered EITE. In […] More
We can design fair carbon pricing (and we already are)
In discussions about carbon pricing, the question of how it will impact low-income households comes up a lot. Put in other words, is carbon pricing unfair? In this blog, I discuss how carbon pricing might affect low-income earners, how smart policy can address potential equity issues, and what Canadian governments […] More
The point of a carbon price is to avoid paying it
Carbon prices don't work in quite the same way as other taxes or levies. Unlike income or sales taxes, which are primarily revenue tools, carbon prices are all about reducing emissions (sure, they also raise revenues, but that’s a separate issue). But if you reduce your GHG emissions, you can […] More
The backdoor in the Pan-Canadian Framework
The Pan-Canadian Framework on Clean Growth and Climate Change (PCF) lets provinces use either carbon taxes or cap-and-trade systems to price carbon. But it also might come with a backdoor that would allow provinces to rely on other, non-pricing climate policies. This blog explains the backdoor, and why it might—or […] More
Alberta’s coal phase-out as a benefit-expanding policy
Alberta’s Climate Leadership Plan is more than a carbon tax. It is a package of policies designed to reduce emissions. One of the cornerstones of this policy package is the phase-out of coal-fired electricity by 2030. But to what extent does this policy genuinely complement Alberta’s carbon price? Today, building […] More
TLDR – A digest of our new report Supporting Carbon Pricing
With the signing of the Pan-Canadian Framework on Climate Change and Clean Growth in December 2016, nationwide carbon pricing is on its way in Canada. In addition, the provinces and the federal government are putting a range of other, non-pricing climate policies on the table. But how can they ensure […] More
Explaining Output-Based Allocations (OBAs)
Last week the federal government unveiled a proposal for the carbon levy that it plans to apply in provinces that don’t implement their own carbon price. Under the federal instrument, most types of emissions would pay the full value of the carbon tax. But large emitters that face global competition […] More
Carbon pricing in Canada’s North
I recently spent some time in Yellowknife. While I was there, I had the chance to talk carbon pricing with some government officials and stakeholders. Under the Pan-Canadian Framework on Climate Change, provinces and territories need to have a carbon price policy in place by next year. As they move […] More
Could Ontario and Quebec’s cap-and-trade get Trumped?
The election of Donald Trump has provoked deep concern in climate policy circles. Reince Priebus, Trump’s White House chief of staff, recently stated that Trump’s ‘default’ position is that climate science is “a bunch of bunk.” This raises critical questions about the future of climate policy in the U.S. as […] More
Are policies that support Carbon Capture and Storage (CCS) worth it?
This blog is the second in a series on the role of non-pricing climate policies. Can other policies substitute (i.e., be an alternative) for carbon pricing? Can they complement (i.e., work in addition) carbon pricing? In this blog, I consider policies that provide financial support for Carbon Capture and Storage […] More
The Beef with Beef
Beef often gets a pretty hard time when it comes to its environmental impact. In this blog, I take a look at why that is, and what we could do about it. First things first Before we get into it, let’s begin with an important preamble: 1) Personally, I think […] More
Unpacking the WCI: Hangin’ tough
Over the past couple of months our summer blog series Unpacking the Western Climate Initiative has taken a look under the hood of California, Québec and Ontario’s integrated cap-and-trade system. In this final installment, we review what we’ve learned and take a look at some recent developments that have been […] More
Unpacking the WCI: Balancing stability and flexibility
In the previous instalment of our summer blog series Unpacking the Western Climate Initiative (WCI), we took a look at the legal uncertainty facing the California cap-and-trade system, one of two key drivers of the recent undersubscribed allowance auctions. In this blog we’ll look at the second driver—permit oversupply—and why […] More
Unpacking the WCI: Thinking linking
Both Ontario and Québec have ambitious GHG reduction targets for 2030. In their effort to hit these targets both provinces have hitched their wagons to California and its integrated cap-and-trade system, the Western Climate Initiative (WCI). The stakes are high—as we’ve seen with the EU ETS system’s troubles over the […] More
A path to international carbon pricing?
It’s useful to remember that carbon pricing isn’t just a Canadian phenomenon. International momentum is growing as well. In this blog, I take a look at some of the outcomes of the international climate change negotiations held in Bonn last week, and the prospects for international carbon markets. Moving forward […] More
What share of carbon pricing revenues are needed to do no harm?
In our previous blog, we explored how carbon pricing is expected to affect households with different income-levels in different provinces. Here, we discuss how different revenue recycling options affect fairness for low-income households, and what share of provincial carbon pricing revenues would be needed to avoid unfairly burdening them. Revenue […] More
Choosing Wisely: Ontario
In February, Ontario released the details of its planned cap-and-trade program. The program will launch in January 2017, eventually linking with Quebec and California’s systems in 2018. In the first year of operation, it is expected to raise $1.9 billion per year, given that allocations are being provided for free […] More
Choosing Wisely: British Columbia
B.C.’s carbon tax has been in place since 2008. Initially set at a low price of $10 per tonne, it has since risen to $30. The tax raised $1.21 billion in fiscal year 2013/14. The tax is revenue-neutral, with revenues used to lower corporate and personal income taxes. Yet there […] More