Introduction

The Ecofiscal Commission asked EnviroEconomics to prepare this report to provide practical guidance to governments designing and implementing output-based allocation systems.

Well-designed output-based systems can protect the competitiveness of trade-exposed and emissions-intensive industries while maintaining incentives to reduce GHG emissions. This report shines light on the challenges in designing robust systems. More importantly, it provides practical advice for doing so.

This paper is the work of Dave Sawyer and Seton Stiebert of EnviroEconomics. Staff members from Canada’s Ecofiscal Commission provided comments and advice on an earlier draft of the paper, but it remains the work of EnviroEconomics.