Joint Canada-US Approach on Climate Policy Needed: C.D. Howe Institute

    TORONTO, Feb. 3 /CNW/ - A joint Canada-US approach to reducing greenhouse
gas (GHG) emissions is needed to minimize the negative impact on Canada's
competitiveness, says a study released today by the C.D. Howe Institute.
    In Pricing Greenhouse Gas Emissions: The Impact on Canada's
Competitiveness, authors Chris Bataille, Benjamin Dachis and Nic Rivers note
there is a growing consensus that if serious action is to be taken to reduce
greenhouse gas emissions in Canada, a price must be applied to emissions
through a cap-and-trade system or a carbon tax. The authors look at a number
of scenarios of how Canada's climate policy might coexist with the rest of the
world, how certain sectors are likely to be affected by carbon pricing and
what governments can do about it.
    Overall, they find that competitiveness impacts associated with climate
change policy in Canada are likely to be relatively small for most sectors of
the economy, with the exception of the following sectors: oil and gas
extraction and processing, pulp and paper, metal smelting, chemicals, cement
and lime production.
    One concern, they note, is that measures Canada might take to reduce GHG
emissions may be partly offset by the relocation of Canadian industries to
countries that lack tough climate change policies - an effect known as
emissions "leakage." Such leakage, they find, would be relatively small: for
every 5 megatonnes of CO(2) that is reduced by Canadian industry, only 1 tonne
would be leaked abroad. Any leakage would also be primarily to the United
States, rather than to developing countries, meaning that a joint Canada-US
approach would largely eliminate both the potential for leakage and overall
competitiveness issues.

    For the study go to:

For further information:

For further information: Benjamin Dachis, Policy Analyst, C.D. Howe
Institute, (416) 865-1904; Chris Bataille, Director, M.K. Jaccard and
Associates, (604) 683-1259; Nic Rivers, Trudeau Scholar, School of Resource
and Environmental Management, Simon Fraser University, (604) 683-1452

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