The Cost of a Cleaner Future: Examining the Economics of Pricing Carbon and Making Deep GHG Emission Reductions

The Conference Board of Canada, August 21, 2017 at 02:00 PM EDT
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This webinar will be presented by Alicia Macdonald and Douglas Ruth.

Governments across Canada have committed to moving towards a low carbon future. Despite the recent decision by the United States to withdraw from the Paris Accord, Canada remains keen to significantly reduce its GHG emissions. Achieving deep emission reductions will require a multifaceted approach and the Canadian plan includes pricing carbon and eliminating coal-fired electricity.

To get a sense of the economic impact of these types of policies, The Conference Board of Canada, building on research from the Canadian Academy of Engineering, analyzed the economic impact of taxing carbon and moving away from fossil fuels for electricity generation. In the analysis, the economic impacts of a carbon tax starting at $10 per tonne of carbon dioxide equivalent is discussed as well as the impact of shifting our electricity generation mix.

While pricing carbon and shifting the electricity generation mix towards renewables are important components of the emission reductions strategy, a broader approach is necessary to achieve our targets. The Trottier Energy Futures Project (TEFP) examined several possible pathways for Canada to make deep emission reductions. The work done in the TEFP has shown us that it is indeed technically feasible to transition Canada to a low carbon society but doing so will require significant spending commitments. In our study, we aggregated the investment spending required under some of the TEFP scenarios and assessed the economic impact of that investment.

Join Alicia Macdonald and Douglas Ruth for a detailed description of the methodology and a presentation of the results of this analysis.

Webinar Highlights

Our analysis reached several conclusions:

  • Introducing a carbon tax leads to higher prices across the economy which reduce purchasing power.
  • Revenue recycling and the depreciation of the exchange rate provide important offsetting impacts.
  • Overall, the negative impact on the economy from the carbon tax studied in this analysis is small.
  • Pricing carbon and decarbonizing our electricity system will need to be accompanied by trillions in investment spending on clean energy infrastructure and significant changes to the way we consume energy to achieve our commitments under the Paris Agreement.

About Alicia

Alicia MacdonaldAlicia Macdonald is Principal Economist, National Forecast, at The Conference Board of Canada, with a focus on custom economic analysis, financial markets and the government sector. Alicia joined the Conference Board in 2004 after working at the Bank of Canada's regional office in Vancouver. Alicia has worked on a number of research projects that have examined economic impact scenarios across a range of sectors at both the national and provincial level. Alicia has an MA in economics from the University of Victoria and an Honours Bachelor of Commerce degree in finance from Lakehead University.

About Douglas

Douglas RuthDouglas Ruth, PEng, PhD (Waterloo), FCAE was elected President of the Canadian Academy of Engineering (CAE) at CAE’s Annual General Meeting in 2016. He has worked in both manufacturing, with Carter-Temro, and in oil and gas with Petro Canada and GEOTECHnical resources. He has held academic appointments at both the University of Calgary and the University of Manitoba. Doug served as Dean of the Faculty of Engineering at the University of Manitoba between 1999 and 2010. He also served for 12 years as a member of the Canadian Engineering Accreditation Board, including two years as the Chair. Doug is a fellow of the Engineering Institute of Canada and of Engineers Canada.

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Price: $199.00 (CAD)