Sharing the Burden for Climate Change Mitigation in the Canadian Federation

46 Pages Posted: 28 Jan 2014 Last revised: 23 Oct 2015

Christoph Böhringer

University of Oldenburg - Economic Policy; Centre for European Economic Research (ZEW)

Nicholas Rivers

University of Ottawa - Graduate School of Public and International Affairs

Thomas F. Rutherford

University of Wisconsin - Madison

Randall Wigle

Wilfrid Laurier University - School of Business & Economics; Balsillie School of International Affairs

Date Written: July 6, 2014

Abstract

Dividing the burden for greenhouse gas abatement amongst the provinces has proven challenging in Canada, and is a major factor contributing to Canada’s poor historic performance on greenhouse gas abatement. As the country aims to achieve substantial cuts to emissions over the next decade and by mid-century, such burden sharing considerations are likely to be elevated in importance. This paper uses a detailed Canadian computable general equilibrium model to compare a number of archetypal rules for sharing the burden of a joint commitment amongst members for the case of greenhouse gas reductions in Canada. Because of the substantial heterogeneity amongst Canadian provinces, these different burden sharing rules imply significantly different relative abatement effort amongst provinces, and also significantly different welfare implications. We compare these archetypal burden sharing rules to existing provincial emission reduction commitments, and find that none of the standard burden sharing rules comes close to existing commitments. We argue that future efforts to share the burden of greenhouse gas abatement in Canada would be more successful if they were informed by a formal analysis such as the one presented here.

Keywords: climate change, burden sharing, policy, computable general equilibrium model

JEL Classification: C68, Q50

Suggested Citation

Böhringer, Christoph and Rivers, Nicholas and Rutherford, Thomas F. and Wigle, Randall, Sharing the Burden for Climate Change Mitigation in the Canadian Federation (July 6, 2014). ZenTra Working Paper in Transnational Studies No. 30 / 2014. Available at SSRN: https://ssrn.com/abstract=2386508 or http://dx.doi.org/10.2139/ssrn.2386508

Christoph Bohringer (Contact Author)

University of Oldenburg - Economic Policy ( email )

Centre for European Economic Research (ZEW) ( email )

D-68161 Mannheim
Germany
+49 6211235200 (Phone)
+49 6211235226 (Fax)

Nicholas Rivers

University of Ottawa - Graduate School of Public and International Affairs ( email )

75 Laurier Avenue East
Ottawa, Ontario K1N 6N5
Canada

Thomas F. Rutherford

University of Wisconsin - Madison ( email )

Randall Wigle

Wilfrid Laurier University - School of Business & Economics ( email )

Waterloo, Ontario N2L 3C5
Canada
226 772-3164 (Phone)

Balsillie School of International Affairs ( email )

67 Erb Street West
Waterloo, ON N2L 6C2
Canada
226 772-3164 (Phone)

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