The most important policy needed to reduce Canada’s greenhouse gas (GHG) emissions is the establishment of a “carbon price” applied broadly in the economy. A carbon pricing policy attaches a financial cost to GHG pollution released to the atmosphere, sending a price signal that discourages activities that release GHGs. Carbon pricing is expected to be an effective and efficient way to reduce a large proportion of Canada’s GHG emissions. It can be implemented either as a tax, a cap-and-trade system, or a combination of the two. Despite its importance, carbon pricing is not the only policy required; complementary policies needed in addition to carbon pricing are discussed in this document.
The views expressed in this document are solely those of the Pembina Institute. They have, however, been informed by the Institute’s multi-stakeholder conference on carbon pricing, held in Calgary on October 29–30, 2007.
