Chapter 7: Conclusions and Recommendations
Achieving 2050: A Carbon Pricing Policy for Canada
There is a need for greater urgency in Canada’s response to the climate change challenge. Action delayed is effectively results denied. We need to take the steps now to ensure we are in a stronger position later to manage the even more difficult challenges inevitably ahead. Pricing carbon is a policy whose time has come. Putting a clear value on the carbon we emit will cause us to think and act differently about how we emit it.
More importantly, the Round Table does not see this as a sole environmental challenge or economic challenge. We do not see it just as industry’s responsibility to act any more than the environmental community’s responsibility to advocate. This is a collective challenge for us, and a collective responsibility for us, as Canadians. We view this as a national issue requiring the participation of us all to collectively determine and implement solutions that are not just effective but fair.
This report offers that opportunity. This report puts Canada on a path to a unified carbon pricing policy. It sets the stage for alignment of emission reductions systems in an increasingly globalized carbon-trading world. It harnesses market-based instruments as the most effective means of reducing emissions to meet the government’s own targets. It addresses competitiveness concerns of industry by providing a suitable transition period, carbon permit allowances, and targeted revenue recycling to lessen impacts. It recognizes the key role of technology in achieving our goals by encouraging innovation through an economy-wide carbon price and targeted public investment. And it places climate governance firmly on the agenda of our national leaders as part of a new, collaborative approach to climate policy development and implementation in Canada.
This report serves as a comprehensive and integrated recommendation for developing and implementing a Canadian carbon pricing policy. To reinforce the report’s research, analysis, and conclusions, the NRTEE highlights the following specific recommendations for consideration:
1. Unify carbon policies and prices across emissions and jurisdictions based on three principal policy elements:
- an economy-wide cap-and-trade system transitioned from current and planned federal, provincial, and territorial initiatives;
- complementary regulations and technology policies in the transportation, buildings, oil and gas, and agricultural sectors; and
- international carbon abatement opportunities that are credible, affordable, and sustainable.
2. Ensure the unified Canadian carbon pricing policy can link with current and proposed international systems and, most particularly, with a prospective trading regime likely to emerge in the United States, to ensure compatibility in pricing and action.
3. Use generated revenue from permit auctions first and foremost, to invest in the required technologies and innovation needed to meet the Canadian environmental goal of reduced GHG emissions.
4. Transition the current fragmented approach to carbon pricing across jurisdictions and emissions to a unified Canadian carbon pricing regime as soon as possible, and no later than 2015.
5. Establish a dedicated carbon pricing governance framework based on adaptive policy principles to develop, implement, and manage the unified carbon pricing regime over time with the following elements:
- Federal/provincial/territorial collaboration through an ongoing forum, which would allow governments to coordinate and harmonize efforts and actions in support of the unified carbon pricing policy, and regularly consult and engage with each other to maintain progress and direction on carbon-emissions pricing and climate-policy development.
- An expert Carbon Pricing and Revenue Authority with a regulatory mandate to collect auction revenues from emitters, set carbon pricing schedules and compliance rules, establish permit allocation rules based on principles and policy directions set by the federal government, monitor and enforce compliance, implement procedures for monitoring and reporting emissions, and ensure confidence in the long-term robustness of the policy.
- An independent, expert advisory body to provide regular and timely advice to government on interim targets for each compliance period; on the distribution of auction revenue to meet environmental, economic, and social objectives as required; on ongoing evaluation and assessment of the carbon pricing regime; and on any proposed adjustments to the policy and pricing framework for decision makers to consider.
© 2013