Sunday, May 21, 2017

Pan-Canadian Framework on Clean Growth and Climate Change combines carbon price and output-based credit

In recent publication Technical paper: federal carbon pricing backstop, Canadian Government proposes combination of carbon price and output-based credit to reduce GHG emissions and address the business competitiveness problem at the same time.
According to the proposal, no large industrial emitter of GHGs will be exempted from the policy and all of them will face a carbon price, starting at $10 per tonne in 2018 and increasing gradually thereafter. At the same time, large GHG emitters will receive credits based on their level of industrial output and higher allotment of credits will be provided to the emitter if its emissions-intensity is lower than that of its industrial peers.
Such an approach is based on The Pan-Canadian Framework on Clean Growth and Climate Change and allows:
- to put the economy-wide carbon price as an effective instrument of reducing GHG emissions, which produces a powerful incentive for consumers to switch to cleaner technologies and adopt greener practices
- to ensure that market forces can be harnessed to drive innovation and generate the lowest-cost emissions reductions
- to establish a clear economic incentive for energy-intensive businesses to reduce their GHG emissions and maintain or expand their production and employment