For Canada's Low-Carb Diet to Work, Emissions Cannot be Free: C.D. Howe Institute



    TORONTO, Nov. 28 /CNW/ - Concerns about climate change and human-produced
greenhouse gases (GHGs) have intensified in recent years, yet uncertainty and
confusion remain over the appropriate policy response. In Designing Canada's
Low-Carb Diet: Options for Effective Climate Policy, released today by the
C.D. Howe Institute, professor and author Mark Jaccard clarifies the issues
for Canada and sets out the options for GHG emissions reduction.
    Professor Jaccard, a leading policy thinker in the field, is a Research
Fellow at the C.D. Howe Institute, Professor in the School of Resource and
Environmental Management at Simon Fraser University, and a member of Canada's
National Roundtable on the Environment and the Economy. Using economic models
developed by him and his research team at SFU, Jaccard is able to simulate how
the economy might respond to different public policies.

    
    Among his conclusions:
    -   Canadian governments have set targets and implemented policies for
        GHG emissions reduction for two decades with little effect. These
        policies failed because of the assumption that voluntary policies
        (information programs and subsidies) are a substitute for compulsory
        policies (financial penalties, regulations).
    -   As long as our policies continue to allow free dumping of emissions
        into the atmosphere from many current and future sources, significant
        reductions will not be achieved.
    -   If Canadians are serious about minimizing the economic impacts of GHG
        reduction, they should adopt an economy-wide carbon tax. Experiences
        with carbon taxes in other countries have shown that with careful
        design, negative impacts on the economy can be minimized.
    -   This tax should be implemented immediately, albeit at a modest level
        that would ramp up at a rate consistent with the success of
        international negotiations toward a broad international effort at
        global emissions reduction.
    

    In the absence of the political will in Canada to implement a carbon tax,
policies should be modified to ensure that they approximate the effectiveness
and economic efficiency of such a tax, says Jaccard. For example,
cap-and-trade schemes that applied to only part of the economy would be only
partially effective. And flexibility provisions in such cap-and-trade systems
that allowed subsidies to flow from regulated to unregulated parts of the
economy would not be effective.
    Evidence suggests, he says, that well-designed policies could keep costs
over the coming decades to a level that most Canadians would be willing to
accept as a necessary burden for reducing the climate change risk - provided
this was part of a global effort with a good probability of success. But for a
global effort to have any chance of success, countries like Canada must show
leadership in incurring some costs now, even before developing countries take
action. Thus far, Canada has been anything but a leader, as some countries
have had carbon taxes in place for 16 years in addition to other significant
regulations.
    The Benefactors Lecture 2007, sponsored by Bennett Jones LLP, is
available at www.cdhowe.org.





For further information:

For further information: Professor Mark Jaccard, Simon Fraser
University; Finn Poschmann, Director of Research, C.D. Howe Institute, (416)
865-1904, cdhowe@cdhowe.org


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