Use Green Taxes and Market Instruments to Reduce Greenhouse Gas Emissions

Tax measures, coupled with market forces, will be key to the fight against climate change and the ability of Canadian firms to adjust. Green taxes and green investment tax credits are needed if Canadian firms are to accelerate their technological adaptation to a carbon-priced world. As a complement to green taxes, a cap and trade system should be implemented, combining regulation with market forces via emissions trading. Part of the Canadian Tax Reform for Sustainable Prosperity series, this briefing looks at how taxes and markets can be used to combat global warming.