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Canada: NRTEE Proposes Carbon Policy To Achieve 2050 Goals

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Canadian businesses need to assess their greenhouse gas emissions and consider options for reducing such emissions in light of the recently released NRTEE report.

On April 16, 2009, the National Round Table on the Environment and the Economy (NRTEE) issued its Achieving 2050 proposal for a Canadian carbon pricing policy, which includes a comprehensive and in-depth assessment of how to most efficiently reduce greenhouse gas (GHG) emissions in Canada.

The NRTEE is an organization that was created in 1988 to generate and promote sustainable development solutions to advance Canada’s national environmental and economic interests simultaneously, through the development of innovative policy research and advice.

The goals of Achieving 2050 are a carbon pricing policy that meets the Canadian government’s medium and long-term GHG emission targets with the least economic cost, and to minimize adverse impacts on regions, sectors, and consumers. NRTEE aims to achieve maximum GHG emission reductions at the lowest cost through the implementation of comprehensive and integrated approach for developing and implementing a Canadian carbon pricing policy.

Achieving 2050 proposes a national carbon pricing policy that would establish a unified carbon price across all emissions, policies, and jurisdictions, and send a credible long-term price signal sufficient to drive new investment and technology development. NRTEE estimates that a unified carbon price across all emissions, policies, and jurisdictions would allow for a steady-state carbon price of C$300 per tonne of carbon dioxide equivalents (CO2e) some time after 2030, rather than a price in excess of C$350/tonne of CO2e that would result from a fragmented policy. Achieving 2050 submits that a credible long-term carbon price signal that generates confidence in the marketplace would result in lower GHG emissions overall, compared to alternatives which involve uncertainty about the future carbon policy and prices.
Policy Wedges

The proposed carbon pricing policy involves three main components or “policy wedges”, as illustrated in the figure below. The first policy wedge is a single national cap-and-trade system, the second is complementary regulations and technology policies, and the third is international opportunities. The first policy wedge, which accounts for the majority of the GHG emissions, is targeted both at “large emitters” emissions (wedge 1A), and “rest of economy” emissions (wedge 1B) from buildings, households, transportation, and light manufacturing.

Article by Richard Corley

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