Carbon Leakage & Carbon Pricing

Carbon leakage is what happens when government carbon policy causes emissions to be displaced to another jurisdiction.

If Canada puts a price on carbon, it could reduce emissions and provide taxes that could be reinvested into innovative new technologies that could replace the lost energy and grow the economy. This would leave Canada with a “double dividend” of reduced emissions and economic improvement.

But if instead other nations respond to reductions in Canadian production of natural gas by producing more themselves, then our jobs and prosperity could leak over the border while global emissions increase, especially if the extra emissions are more carbon intensive in other countries, leaving us in a “green paradox.”

If we agree that Canada should be a global leader and do more than its share on climate change we need to think globally.  Canadians are the best in the world in many areas and enjoy comparative advantages in carbon that can help the planet.

So what’s going to happen? Will Canada reap a “double dividend,” suffer with a “green paradox,” or will we land somewhere in between?

Videos

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Counter-Points

Counter-Point The Government will still retain tax revenue from the added GST on fuel, etc.

Counter-Point: Carbon taxes shift jobs out of Canada and increase emissions in other countries.

Reversing carbon leakage by attracting high-emission offshore production in areas where Canada is a lower-emissions producer will generate a double dividend of new economic benefits and lower global emissions.
https://c2cjournal.ca/2019/05/think-globally-act-profitably/

Studies

The Layered Costs of Government Policies

Title: The Layered Costs of Government Policies Author: Calgary Chamber Publisher: Calgary Chamber of Commerce Date: December 14, 2017 Full Text Article Summary: The Calgary Chamber of Commerce finds that “Minimum wage increases, rising municipal property taxes, carbon taxes, new labour code reforms, increasing personal and corporate income taxes, greater future Canadian Pension Plan contributions, and

Reversing Carbon Leakage In The Aluminum Sector

Title: Reversing Carbon Leakage In The Aluminum Sector Author: Mikela Hein, Jotham Peters Publisher: Navius Research Date: March, 2019 Full Text Article Summary: Canada has competitive advantages in its sectors when it comes to greenhouse gas and CO2 emissions. When Canada’s production is displaced due to policy, domestic greenhouse gas emissions decrease while global

Carbon Tax – Flawed Implementation Across Canada

Title: Carbon Tax – Flawed Implementation Across Canada Author: Kenneth P. Green Publisher: Fraser Institute Date: May 5, 2017 Full Text Article Summary: The Fraser Institute examines carbon taxes across the country and finds that they are questionable both in impact and implementation, with revenues often being spent on government projects of dubious value:

The Cost of a Cleaner Future

Title: The Cost of a Cleaner Future Author: Len Coad, Robyn Gibbard, Alicia Macdonald, and Matthew Stewart Publisher: Conference Board of Canada Date: September 6, 2017 Full Text Article Summary: This analysis studies three distinct policy measures—the impact of a carbon price and a shift in the electricity generation mix, the impact of substantially decarbonizing our electricity

Carbon Tax Experiment is a Danger to New Brunswick

Title: Carbon Tax Experiment is a Danger to New Brunswick Author: Marco Navarro-Génie Publisher: Atlantic Institute for Market Studies Date: March 23, 2018 Full Text Article Summary: While good intentions matter a great deal, results matter most. The federal decision to impose a national carbon tax policy may be well-intentioned, but its effects may

Canada’s Climate Action Plans: Are They Cost-effective?

Title: Canada’s Climate Action Plans: Are They Cost-effective? Author: Kenneth P. Green Publisher: Fraser Institute Date: November 16, 2017 Full Text Article Summary: Climate policy across Canada has been characterized by inefficient spending, over-regulation, rejection of market principles, and ineffective attempts to transition to renewables, culminating in large costs to taxpayers and little environmental

Global Petroleum Survey 2017

Title: Global Petroleum Survey 2017 Author: Ashley Stedman & Kenneth P. Green Publisher: Fraser Institute Date: November 28, 2017 Full Text Article Summary: The Fraser Institute’s annual survey compares the attractiveness of various jurisdictions for investment in energy development.

Energy Costs and Canadian Households

Title: Energy Costs and Canadian Households Author: Kenneth P. Green, Taylor Jackson, Ian Herzog, Milagros Palacios Publisher: Fraser Institute Date: March 2016 Full Text Article Summary: The Fraser Institute finds that a growing number of Canadians are experiencing “energy poverty,” defined by “devoting more than 10% of total expenditures to energy” (electricity, natural gas,

You Asked For It? – Is Canada’s oil and gas industry subsidized billions?

Title: You Asked For It? – Is Canada’s oil and gas industry subsidized billions? Author: Jeff Dowes Publisher: Canadian Taxpayers Federation Date: Fall 2017 Full Article Here Summary: Jeff Dowes from the Canadian Taxpayers Federation explains the subsidies received by the oil and gas industry. He shows that the stats cited by activists groups

Think Global, Act Profitable

Title: Think Global, Act Profitable Author: Michael Binnion Publisher: C2C Journal Date: May 13th, 2019 Full Text Article Summary: We already have some of the world’s toughest emissions standards and practices in numerous areas of manufacturing, processing and resource extraction, delivering very high rates of productivity per unit of greenhouse gas emissions. This points

Canada’s Carbon Leak Problem

Title: Canada’s Carbon Leak Problem Author: Michael Binnion Publisher: Policy Options Date: February 1, 2017 Full Text Article Summary: Most people I talk to have never heard of carbon leaks, which is when carbon policy causes emissions to be displaced to another jurisdiction. Yet the recent election in the United States heightens the importance

Carbon Leakage – a vacuum more than a leak

Title: Carbon Leakage – a vacuum more than a leak Author: Peter Boag Publisher: Canadian Fuels Association Date: June 13, 2017 Full Text Article Summary: “The announced withdrawal of the United States from the Paris Accord highlights the carbon ‘leakage’ risks from aggressive Canadian GHG reduction policies that don’t take into account the integrated

Strategic Energy Management for Businesses in Quebec

Title: Strategic Energy Management for Businesses in Quebec Author: Johanne Whitmore and Pierre-Olivier Pineau (Executive Summary) Publisher: Conference Board of Canada Date: October 2015 Full Text Article Summary: In 2012, 67 percent of the energy consumed in Quebec was consumed by industrial, commercial, and institutional users.

Strategic Energy Management for Businesses in Quebec

Title: Strategic Energy Management for Businesses in Quebec Author: Johanne Whitmore and Pierre-Olivier Pineau (Executive Summary) Publisher: Conference Board of Canada Date: October 2015 Full Text Article Summary: We explore conditions determining which anti-leakage policies might be more effective complements to domestic greenhouse gas emissions regulation. We consider four policies that could be combined with

Carbon Pricing In Alberta

Title: Carbon Pricing In Alberta Author: Robert P. Murphy Publisher: The Frasier Institute Date: February 27th, 2019 Full Text Article Summary: Supplemental goals undercut the logic of carbon pricing, in which policymakers use a carbon tax to correct incentives and then allow the market to find the least-cost methods of reducing emissions. Another problem

Trade is the lifeblood of our prosperity – that is why we must protect it

Title: Trade is the lifeblood of our prosperity – that is why we must protect it Publisher: Resource Works Date: September 19, 2017 Full Text Article Summary: Carbon pricing in BC may do more harm than good, hurting trade-dependent Canadian industries and increasing carbon leakage to other jurisdictions. Increased production costs may drive resource

CARBON TAXES: ARE THE POLICIES OF OTTAWA AND THE PROVINCES EFFICIENT?

Title: CARBON TAXES: ARE THE POLICIES OF OTTAWA AND THE PROVINCES EFFICIENT? Author: Dr. Germain Belzile Publisher: Montreal Economic Institute Date: July 2019 Full Article Here Summary: There are certain consensuses in the economic literature regarding the best policies that aim to reduce emissions of a given pollutant. We identified three conditions, in particular,

Don’t link climate change to increasing costs of disasters

Title: Don’t link climate change to increasing costs of disasters Author: Bjorn Lomborg Publisher: Hindustan Times Date: Sept. 8, 2017 Full Text Article Summary: To reduce the human costs of natural disasters, governments should focus on poverty reduction and strategic urban planning rather than carbon cuts.

Comparing policies to combat emissions leakage: Border carbon adjustments versus rebates

Title: Comparing policies to combat emissions leakage: Border carbon adjustments versus rebates Author: Carolyn Fischer and Alan K. Fox Publisher: Journal of Environmental Economics and Management Date: September 2012 Full Text Article Summary: In 2012, 67 percent of the energy consumed in Quebec was consumed by industrial, commercial, and institutional users. Ho

The Carbon Market: Chasing Away Job s and Capital Without Reducing GHGs

Title: The Carbon Market: Chasing Away Job s and Capital Without Reducing GHGs Author: Germain Belzile and Mark Milke Publisher: MEI: Ideas for a More Prosperous Society Date: June 2018 Full Text Article Summary: A carbon market, like a carbon tax, aims to modify behaviors in order to reduce GHG emissions by settinga price

We Need Common Sense Climate Policy

Title: We Need Common Sense Climate Policy Author: Michael Binnion Publisher: Policy Options Politiques Date: April 3, 2018 Full Text Article Summary: The world has always been able to count on Canada to punch above its weight on issues of global concern, including the potential impacts of climate change. However, doing the right things

Canada’s Oil and Gas Sector at Risk? How Excessive Taxes and Regulations Undermine Our Competitiveness

Title: Canada’s Oil and Gas Sector at Risk? How Excessive Taxes and Regulations Undermine Our Competitiveness Author: Germain Belzile Publisher: Montreal Economic Institute Date: October 2017 Full Text Article Summary: Germain Belzile discusses how over-regulation is making Canada’s energy industry less competitive, especially when compared to the United States. To counteract this, he recommends

Trans Mountain Pipeline ULC – Trans Mountain Expansion Project Review of Related Upstream Greenhouse Gas Emissions Estimates

Title: Trans Mountain Pipeline ULC – Trans Mountain Expansion Project Review of Related Upstream Greenhouse Gas Emissions Estimates Author: Environment and Climate Change Canada Date: May 19, 2016 Full Text Article Summary: This document provides an estimate of the upstream greenhouse gas emissions (GHG) associated withthe transportation capacity on the Trans Mountain Expansion

Fact Sheets