LASER TALK: Carbon Pricing is the Way Forward

Canada’s Ecofiscal Commission released a report in April 2015 titled “The way forward”. The Ecofiscal study used an economic model that analyzed where Canada would be in 2020 if regulation or carbon pricing were used to manage carbon pollution. The carbon pricing model they used was revenue-neutral.


In this model, Canada’s gross domestic product (GDP) in 2020 is 3.7% better under carbon pricing than it is under a regulatory approach. The “gain” breaks down as follows: 0.4% from provinces linking their carbon pricing systems; 0.9% from recycling revenue into income tax deductions; and 2.4% from carbon pricing alone. The study was agnostic towards which carbon pricing mechanism was used. However it did stipulate that the carbon tax or cap and trade had to be “well-designed”.

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