EnviroEconomics.ca

Andrew Leach , an environmental economist out of U of A, has good article in the Edmonton Journal today on an issue that one can’t help but see in the media: a contradiction in Canada’s domestic and international climate policies. His point is simply that while Canada is calling for binding targets for all emitters internationally, only the large emitters domestically face a real incentive to take action. The rest of us are offered subsidies, that we may or may not respond to, and some sporadic technology standards, that may or may not touch our emissions.

Instead, we need a more comprehensive climate policy. Ideally, this would include a domestic carbon tax for the sectors not covered by the cap and trade for large emitters – that includes you, me, our buildings and cars. Practically, this implies a cap and trade and an emission tax implemented concurrently so that a price signal is seen and hopefully felt by all. These two price signals should form the basis of our climate policy, but would not get the job totally done, and thus other regulatory standards, say for vehicles and buildings will be required, as well a projects on CCS and subsides for innovation.

If we are really serious about carbon and want to minimize cost, we need a broad-based carbon tax to complement the proposed trading regime. Without it, we will continue to have one oar in the water. Rowing in circles is a bit of a rush and can be fun, but mostly it gets tiresome.