CALGARY, AB – Canada’s provinces should implement a shared offset market for carbon pricing as a first step towards a nationally harmonized system, a report from the Canada West Foundation recommends.
Such a move could help turn the country into a leader on carbon pricing. If the provinces act now, the country will have a clear plan in time for this fall’s United Nations Climate Change Conference in Paris. The conference aims to negotiate a universal, legally binding agreement to reduce greenhouse gas (GHG) emissions that will enter force in 2020.
“Canada’s premiers have a tremendous opportunity to stitch together a coherent national carbon pricing framework, while improving the economy,” says Trevor McLeod, Director of the Centre for Natural Resources Policy. “But they need to find the will to do so.”
More than 75 per cent of Canadians will live in a jurisdiction with a carbon price, once Ontario links to Quebec’s cap-and-trade system. The other provinces are British Columbia and Alberta.
The paper, entitled Patchwork Pollution Solution: Stitching together a Canadian climate plan, argues that a federal “one-size-fits-all” carbon pricing approach is unnecessary; provinces can link distinct carbon pricing systems to create a de facto Canadian system. To do so effectively, it states, prices and the level of stringency must be aligned. The paper recommends the creation of a common offset system which will force prices across systems to converge.
Critics of carbon pricing program often state it transfers wealth from one jurisdiction to another. The paper argues that this issue can be addressed via the Canadian Energy Strategy, wherein provinces pledge to support all forms of energy production and energy transportation infrastructure. Competitiveness and carbon leakage concerns can be addressed through the architecture of each carbon pricing system.
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