ec•o•fis•cal policy /ekōˈfiskəl/ adj.

Ecofiscal policies put a price on pollution. They offer real incentives for investment in innovative technologies so that we can continue benefiting economically from our natural wealth while also providing better protection to the environment. The revenue generated from ecofiscal policies can create further economic benefits; for example, by reducing income and payroll taxes or investing in new technologies or critical infrastructure.

Can pricing pollution really be good for the economy?

What Practical Solutions Look Like: Case Studies

Tackling water scarcity in Singapore


Fresh water supply is a major challenge in Singapore. With demand slated to double by 2060, the country needed a solution to conserve more and waste less. The government introduced a water-pricing system, aligning the costs of using water with the costs of treating and providing it. Recognizing that this could place an unfair burden on some, the government also introduced a tax rebate to offset costs for lower-income families.

Over 11 years, Singapore achieved a 9% reduction in water consumption without hurting low-income families.

Learn more about water pricing

Addressing traffic congestion in London


Traffic congestion is a plight 
of big urban centres. When everyone pays for road infrastructure with general taxes, there’s little incentive to carpool or find other modes
 of transportation. London, England, tackled this problem in one of its busiest areas with a road use charge. Cars entering the high-traffic zone at peak hours are charged a flat daily fee. The revenue finances investments in public transit alternatives.

Congestion pricing in London helped reduce traffic in a high-congestion area by as much as 36% in 10 years.

Learn more about congestion pricing

Reducing greenhouse gas emissions in British Columbia

BC carbon

In 2008, as part of its ambitious plan to reduce greenhouse gas emissions to combat climate change, British Columbia instituted a carbon tax that applied to major fossil fuels. By law, revenue from the tax must be offset with equivalent cuts to personal and business income taxes. As of 2013, fuel use in B.C. had declined dramatically, whereas it had risen slightly in the rest of Canada.

Between 2008 and 2013, fuel use in B.C. dropped by 16%, while it increased by 3% in the rest of Canada.

Learn more about carbon pricing

Cutting landfill waste in the United Kingdom

Landfill waste

Landfill waste contributes to greenhouse gas emissions, air pollution, and water and soil contamination. The UK has instituted a number of ecofiscal policies to reduce the amount of residential and industrial waste sent to landfills over the past two decades. This includes taxing each tonne
of landfill waste and using a cap-and-trade system, giving local waste-disposal authorities flexibility while guaranteeing overall waste-reduction targets.

Pricing solid waste in the UK helped reduce commercial
 and industrial landfill waste by more than 40% in five years.

Learn more about garbage pricing

Find out more about ecofiscal policy opportunities for Canada

5 Reasons Canada Needs Ecofiscal Solutions

1. Canada’s natural wealth is fundamental to our prosperity.

Our natural wealth is a source of Canadian pride and is critical to our economy. Jobs in fishing, forestry, agriculture, and tourism depend directly on healthy ecosystems. Access to clean water is vital to our communities and businesses. Our health and quality of life are tied to the quality of the air we breathe.

$228 billion — The estimated health costs of air pollution resulting from illness and premature deaths between 2008 and 2031.

2. We can do better.

Canada’s current fiscal system holds back innovation and productivity 
while inadvertently promoting the pollution of our land, air, and water. That environmental damage has a cost, to our economies and to our lives. It doesn’t have to be this way. The right policies will provide an incentive to invest in innovative and new technologies , while lowering the taxes that stunt growth.

$760 million — The amount that income and business tax cuts exceeded pollution-pricing revenue under B.C.’s carbon policy from 2008 to 2013.

3. This is the smartest way to get serious results.

Environmental policies don’t have to be expensive to work. But the ones we’re currently using the most—subsidies and heavy-handed regulations—can be costly to governments and the broader economy, and they’re often ineffective. In contrast, ecofiscal policies allow market innovation to drive the lowest-cost, highest-impact solutions.

$800 million — The estimated amount the United States saved annually by using pollution pricing instead of regulations to reduce acid rain.

4. This is a significant opportunity.

Canada currently lags behind many of our international trading partners when 
it comes to innovation and environmental performance. But we don’t have to. Introducing ecofiscal policies now will put Canada and our industries on the path to compete and succeed in a 21st-century economy.

$816 billion — The estimated annual value of global clean-tech markets by 2015. Of the 65 publicly traded companies on the Cleantech Index, only 1 is Canadian.

5. This is both our responsibility and our legacy.

It is neither fair nor responsible to leave our children and grandchildren with debt— economic or ecological. We built our prosperity on Canada’s clean air, land, and water. If we make the right choices now, the next generation will have the same opportunity. Today’s smart policies will shape that legacy.

$87 billion — The additional costs in retrofits and premature retirement of assets if policy to significantly address Canada’s greenhouse gas emissions is delayed until 2020.

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