NRTEE Suggests Made-In-Canada Climate Policy and Carbon Pricing
January 28, 2011
National Roundtable on the Environment and the Economy (NRTEE) recently released a report calling on the federal government to regulate greenhouse gases (GHGs) and create a “made-in-Canada” carbon price for the good of both Canadian industry and the global environment. The report entitled Parallel Paths: Canada-US Climate Policy Choices was released January 25, 2011 and is one in the series of seven reports on the economic risks and opportunities of climate change to Canada, Climate Prosperity.
The Report suggests that Canada should not blindly follow the U.S. but should chart it’s own path and create a unique carbon pricing strategy.
Key findings in the report include:
- Harmonization with US policy alone may create a higher than necessary compliance cost in Canada and will not allow us to meet domestic GHG reduction targets
- Canada has unique competitiveness issues and requires a made-in-Canada solution to address them
- Acting now is the best protection against future US trade measures
- Although we pay much attention to the effect of US policy in Canada, Canadian policy has the greatest effect on Canadian industry – some costs will be present no matter when Canada implements its full suite of climate policy actions and harmonizing will not prevent these
- Delaying climate policy implementation is harmful to the economy
The report recommends that the federal government implement a transitional policy option that includes:
- A carbon price with a collar that limits the Canadian carbon price to be no more than $30/tonne CO2e higher than that of the US price (therefore if no US price, CDN price limit would be $30)
- Implementation of a national cap-and-trade system with auctioning of permits and revenue recycling
- The limited use of international permits and domestic offsets for compliance purposes to help keep price lower for Canadian firms while maintaining environmental goals
- The creation of a federal technology fund as an added flexibility mechanism to keep prices lower and stimulate investment in needed emissions reduction technologies
The NRTEE clearly states that this transitional policy option will help Canada get ahead of the curve and move towards achieving our targets in a cost-effective way.
About the NRTEE
The federal government under Prime Minister Brian Mulroney created the NRTEE to address challenging issues that required expertise in environmental science, social studies and economics. It is an independent policy advisory agency to the federal government on sustainable development solutions. This report is not an official government document, but is something that the government could use to guide decision-making. For more information please see: http://www.nrtee-trnee.com/
