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Report Concludes that Canada Needs Economy-Wide Price Put on Carbon Emissions As Soon As Possible to Achieve 65% Reduction in GHG Emissions by 2050

A price on carbon should be accompanied by other policies such as transportation regulations for maximum reductions, according to the report. DCT = downstream cap-and-trade; UCT = upstream cap-and-trade; DCT with carbon tax (CTax) includes complementary carbon tax on remaining emissions. BR= building and equipment regulations. TR = transport (freight and passenger) regulations. Click to enlarge.

Canada can achieve deep greenhouse gas (GHG) emission reductions by 2050, but only by putting a price on carbon emissions throughout the entire Canadian economy beginning as soon as possible, according to the findings of the National Round Table on the Environment and the Economy (NRTEE) in its final advisory report entitled Getting to 2050: Canada’s Transition to a Low-emission Future.

At the request of the Minister of the Environment, the NRTEE explored potential scenarios for how Canada could achieve deep, long-term GHG emission reduction targets (20% by 2020 and 60% to 70% by 2050 from current levels), as well as air pollutants reduction targets (50% and 80% by 2050). The report sets out a framework for how Canada can transition to a low-emission future and achieve these long-term emission reductions.

The central recommendation of the report is to establish an economy-wide price signal for carbon emissions as soon as possible. The NRTEE research shows that the most effective and efficient policy that would result in deep GHG emission reductions is a market-based policy, such as an emissions tax, a cap-and-trade system, or a combination of the two. In order to achieve the deep emission reduction target, this policy would need to be complemented by other sector-specific regulatory measures to force emission reductions from those parts of the economy that do not respond to a price signal.

Transportation is called out as one of the sectors that is less responsive to changes in emissions costs. The complementary policy toolkit includes policies such as regulatory standards, subsidies and infrastructure investments.

Our analysis shows that putting a price on emissions is the most effective tool to achieve deep GHG reductions over the long-term. An early and clear price signal is needed to influence the investment decisions by industry in the technology and innovation required to achieve deep reductions and also to influence consumer decisions and behaviour.

—NRTEE Chair Glen Murray

The NRTEE report sets out five important enabling conditions that should be reflected in Canada’s long-term climate change policy framework. These are:

  • Canada will have to act in concert with the world, to address competitiveness issues.

  • Policy certainty beyond the short term is critical, to ensure predictability for new investments.

  • An economy-wide emission price signal with complementary regulatory policies is necessary, to foster investment, technology deployment, and change consumer behaviour.

  • Technology deployment is imperative, and will need to be wide-spread throughout all segments of the economy.

  • An integrated approach to climate change and air pollution should be pursued, to reduce costs and improve health outcomes.

The Round Table’s analysis concludes that the government’s medium and long-term targets are achievable with the equivalent impact on Canada’s GDP of 1 to 2 “years of lost GDP” over the 44-year period from 2006 to 2050.

Delaying action comes with unnecessarily high economic and environmental risk. Our research shows that a faster, deeper pathway to achieve the government’s long-term GHG reduction targets of 20% by 2020 and 65% by 2050, has the least overall economic impact in the long-run, and better environmental outcomes resulting in the equivalent of 5 years of no GHG emissions into the atmosphere over this period as we meet our targets.

—Glen Murray

The report recommends an integrated approach for reducing GHG and air pollutant emissions. A key finding of the research is that an integrated approach may result in lower prices associated with GHG emission reductions and greater air pollutant reductions.

The NRTEE also calls for the establishment of a Canada-wide plan as soon as possible that leads to better coordination of federal, provincial and territorial GHG emission reduction policies.

(A hat-tip to Dick!)




Two things that I noticed about the graph: 1) it starts at a very high level, and 2) the trajectories appear nearly identical for the first five years after implementation.


John Baird (our federal minister of destroy the environment) Is too busy deep-throating big oil to actually implement any of these recommendations. He talks like a tough guy, but he takes it up the shoot with the best of them.


65% , I'll say that again 65%, that felt so good 65%,


aha good luck with that, with the majority of the population are immigrated, teaching those that came from nothing to sacrifice's them selfs for the better future will take a long long awhile... long as selfish human devours remains... man i really want it to happen, but those around me would rather save money than pay the price for green. Few will, but majority will never unless the technology is affordable and is for the masses.

I guess taxes would work, but that just drives up cost for the consumer, for the better maybe if the system used the money wisely instead of pumping into more of those fuel cell hydrogen ford focuses. I bet i'm getting better mileage than you Mr.FCV #4 that leaves from surrey around 6:30 am, you live close to me :)


Cap and trade is a scheme meant to keep the energy cartels in control of your money. Think commodities and option trading is a boondoggle? Wait til the cap n'traders start moving half a trillion (500 billion) dollars annually in the name of "green living." BS.


Sulleny, explain how commodities and option trading is a "boondoggle". I make my living off of those types of trades, and they seem to work pretty well for me.


The moment ANY government even contemplates implementing "price singals" and "caps" they'll get kicked out so fast ....
Most of us here in Canada love these things in *principle* as they sound great. However the moment someone actually tried to implement them and people actually see the consequences in *practice* (say price of gasoline jumps 100% - pretty clear signal, huh ;) then people would change their minds in a hurry.

As for caps, what difference does it make? No caps in China, or India and many other places. Factories will simply move. Others that cannot move (mines, oil sands) get closed and investments flee Canada. The outcome is many jobs lost and a collpase of Canadian economy.

It is fine for Liberal thinkers to promote these things. However it is irresponsible to suggest so called solutions that ruin the economy and jobs.

The problem that none of them want to face is that our climate is tough. It is hard to survivie and move around during winter without emitting a lot of CO2. Somehow you have to maintain a 40C delta between -20C outside and +20 inside. I am all for less air conditioning in the summer as it is a luxury. But during winter heating is a necessity.

Instead they should get off their azzez and start promoting constructive solutions, like solar and winde, and actually put their money where their mouth is.


g: If you read the report, you'll find that the economic impact of a carbon tax is minimal and certainly less than the cost of climate change damage (Stern report). Hype about economic damage from a carbon tax is no more than scare tactics from those that make a living polluting our world. A carbon tax is one way to encourage alternatives. Technologies which are clean become more price competitive when the fossil technologies have to pay for the damage they create (all pollution should be taxed).

As for the "nobody else is doing anything" argument ... sure ... do we all want to stand around and do nothing?

Stan Peterson


"As for the "nobody else is doing anything" argument ... sure ... do we all want to stand around and do nothing?

Answer Y-E-S !!! Absolutely.

There is no real, genuine problem; only hysteria. And if there were a problem, recommending "Bleeding" as the old physicians used to do, is not help.

Clean the environment of genuine pollution. And ignore the hysteria. That is in fact what is happening. The air and water gets cleaner everyday, real pollutants are being curbed and prevented.

The most dreaded greeting ever offered: "I'm from the government; and I want to help you..."


Stan: Yes, there is lot's of hype around global warning as there always is around any potentially serious problem. But, there are enough serious, honest and knowledgeable scientists raising red flags that's its time to listen and act. I'm in the better safe than sorry camp.

If you want to get rid of regular pollution how about a tax on NOx, Mercury, CO and all the other crap spewed out by vehicles and fossil power plants. Revenues should be offset by matching cuts to other taxes. Polluter pay is the fairest way go and will encourage some real change.


OK let's assume adding this carbon tax will hurt us.
Then subtracting taxes should help us right?
Answer; convert other taxes, like the GST, the Corporate tax, the fuel tax and various levies, into a carbon tax. People who choose to do the green thing will benefit. The economy will benefit. The environment will benefit.


BTW seeing as Canada is a country that's had multi-billion dollar surpluses in our tax revenue every year for a decade - we can afford to do the right thing so let's get on with it!



there are hundreds of ways these trading systems are corrupted - it may not be your experience but there are plenty of cases on record.

Harvey D


I'm 100% with you. All polluters should pay (even imported goods and services) and non-polluters should be compensated.

How do you transfer resources ($$$) fairly from polluters to non-polluters is a difficult question to answer.

Why not try progressive variable sales tax (from something like -50% to + 200% ???) based on the GHG associated with the product from (production + transportation + usage).

We should all have the choice to buy/use lower taxed (or negatively taxed) clean products or higer taxed polluting products.

For example, an electric car could have a -30% to -40% sales tax, a PHEV a -15% to -20% sales tax, a 40+ mph hybrid a -5% to -10% and a small ICE vehicle a + 20% to + 40% sales tax, a large ICE gas guzzlers could have a +100% to +200% sales tax and so on. This would also apply to all imported vehicles.

The same could be done with the price of electricity. Solar, Wind, Hydro could get a -25% tax, nuclear a 0% tax, NG a +25% tax and coal a 100% to 200% tax. This would also apply to imported electricity.

Sale taxes already exist and are easy to apply and can be easily varied to obtain the desired market and GHG effects.

If done progressively enough, is well planned, explained and advertized, the effect on the economy should be acceptable. Of course, over the longer term, some older polluting industries would die and be replaced by new cleaner industries.

Transition from a polluting fossil fuel economy to a clean electric economy will take 2 or 3 decades (or more) but is doable.



so a -30% (negative) sales tax is actually a credit of 30% on year end taxes? Why not just call it a tax credit?



If "economic impact of a carbon tax is minimal" then it will have no or minimal effect on pollution. So what is the point? To have some sort of significant effect you need a tax that is NOT minimal but forces change.

Also, caps for some will have a major effect, like oil sands. Not that I mind. Some abuse like oil sands should be curbed.

As for not doing anything, that is my major problem. I would love to install solar panels, wind turbines, etc. even go off grid. However it is just not possible due to cost and lack of government support.

Government and industry need to DO SOMETHING 1st that will enable individuals do something. Look at CFLs. Once the industry made them in great quantity at a reasonable price then individuals started buying them and replacing the old ones.

Stan, the temperature in Ottawa right now is 9C in January. Most of the snow has melted away in January!!!!! I think we should slap a carbon tax on people like you who stick their head in the sand.

That being said, there is plenty of overeaction and unresonable expectations about fixing it.

We still have a large debt and surpluses are needed to pay it. So no, we don't have a bunch of extra money. What you don't know is that our lower level taxes (province, city) keep going up because feds shifted some costs lower.

Harvey has it right. The entire taxing scheme should have a zero sum. You tax bigger vehicles and move that money to credits for smaller vechiles. Tax oil furnaces and move that money to solar panels, etc.

The difficult problem with carbon tax and caps on industry is that many/most other countries don't have it. Thus any business having to pay these new taxes would simply pack up and move to places where they don't have them.

This is why our PM Harper keeps telling other countries that the action my be co-ordinated and global. You MUST have all the major economies of the world impose the same taxes and caps at the same time. Then business could not move because everyone has the same tax. Now that may not sound fair for well known reasons, but it is the reality.

The main problem is we lack that co-ordination and countries keep arguing, no one wanting to be the 1st.


A comprehensive carbon tax which includes imported goods and their carbon costs including for transportation would reduce the migration of businesses significantly. It wouldn't matter if they moved, they would still be stuck paying the tax. Also since the carbon tax includes the countries' own produced goods, then they are viable under the fair trade agreements and implementable, although I see foreign business associations screaming. Food of course would be exempt.

The excuse that everyone else must implement an overall usable solution that works for everybody has led to nobody doing anything. It sounds great, fair, democratic and is the basis for proscrastinating and waiting. It's why Harper promotes it, and many people in the US. Simple finger pointing that the ultimate cause is because of someone else's policies which "we" have no power over.


Again, what does a "comprehensive" tax solve exactly????

So you slap the same 10% carbon tax on domestic oil companies as well as oil imports. Both simply pass this cost to consumers. Both domestic and foreign oil companies continue to operate the same way as before.

Do consumers change their behaviour? We have had almost a 100% jump in gasoline prices in tha past decade and demand is still going up.

What happens is that some people might travel bit less, while everyone pays more for gasoline and has less money left for other things, so the economy slows down, people loose jobs, etc.

The tax alone simply makes our lives more difficult. It has to be accompanied by credits and incentives for alternatives. Say you impose 10% carbon tax on vans and pickups, then offer a 10% discount of hybrids. Now we have a choice and a way to avoid this tax and not increase our costs.

My point is that there is too much focus on penalties and not enough focus on constructive measures. You can't do penalties alone, if for no other reason then because voters will penalize the politicians who try do it.

The main problem is that the entire society (including industry and governments) are just not oriented towards solutions and green tek. Compared to military and other spending, money spent on green tek is miniscule. Even today.

Harvey D


We have a major problem in Canada. Our PM and Tar sands Oil extraction are from the same place. So...

Secondly, we are making a killing selling that dirty stuff, at the rate of about 2 million barrels a day, south of the border.
Imagine what the pollute will be when production/export is raised to 5 million barrel/day.

Replacing fossil fuels with biofuels is not a worthwhile effort, specially for Canada with hugh reserves from Tar Sands. Could liquid fuel from tar sands be taxed much more than biofuels without breaking the country?

Electrification of most if not all ground vehicles may be the best way out of the vicious circle. There are enough Wind and Hydro potentials in Canada for 100% PHEVs-BEVs.

To accellerate the transition, we should make the purchase + yearly registration fees + operation of ICE vehicles progressively more and more expensive. Concurrently, we must do the opposite for PHEVs and BEVs.

The same could be done for fossil fuel HVAC vs electric HVAC.

Of course, all imported goods would have to be taxed for their GHG content.

Many will call that 'market interference' but 100% free market does not really exist. There are many other examples of direct 'market interferences' and we learned to live with them.

Absolute Free market will not reduce GHG but double it in another 25 years. The cheapest energy (coal) is also the dirtiest. So...


The tax is on produced goods. This would create a negative incentive on companies to just move things overseas.

I'm not against incentives. It may be desirable/necessary to accelerate the process but without some sort of price indicator, people will try to economically "freeload" on the environment. It's why coal is cheap. People don't directly pay. Companies don't.

I don't think of it as a tax but an adjustment on the price to show it's true cost. It's not just about oil. It's about overall energy usage.

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