Striving for Equivalency Across the British Columbia, Alberta, Québec and Ontario Carbon Pricing Systems: The Pan-Canadian Carbon Pricing Benchmark

Climate Policy, 18:8, 1012-1027, DOI: 10.1080/14693062.2018.1470489

25 Pages Posted: 2 Jun 2019

See all articles by Sharon Mascher

Sharon Mascher

Faculty of Law, University of Calgary; Faculty of Arts, Business, Law and Education, University of Western Australia

Date Written: May 1, 2018

Abstract

The Pan-Canadian Framework on Clean Growth and Climate Change is designed to put Canada on track to meet its Paris commitments. A key pillar of the plan is the introduction of a pan-Canadian carbon price by 2018. However, four Canadian provinces, nearly 85% of the Canadian economy and population, have already implemented carbon pricing systems. British Columbia (BC) has a carbon tax. Alberta has transitioned from an output-based allocation system for industrial emitters to a hybrid system combining a carbon levy and refined output-based system. Québec and Ontario have implemented cap-and-trade systems, linked to California. Recognizing these existing systems, rather than impose a single carbon pricing mechanism, the Pan-Canadian Approach to Carbon Pricing gives provinces and territories the flexibility to adopt a carbon tax, a hybrid system, or a cap-and-trade system. To address concerns relating to ‘fairness’ and equivalency of carbon price, a federal carbon pricing benchmark establishes criteria relating to minimum ‘common scope’ and ‘increases in stringency’ that provincial and territorial carbon pricing systems must meet. This paper explores the design features of the existing Alberta, BC, Ontario and Québec carbon pricing systems, and considers how the benchmark affects stringency and addresses equivalency of carbon price across these different systems. *Tables excluded.

Keywords: Carbon Pricing, Equivalency, Carbon Tax, Output-Based Allocation, Cap-and-Trade, Pan-Canadian Framework

JEL Classification: H00, K20, K32

Suggested Citation

Mascher, Sharon, Striving for Equivalency Across the British Columbia, Alberta, Québec and Ontario Carbon Pricing Systems: The Pan-Canadian Carbon Pricing Benchmark (May 1, 2018). Climate Policy, 18:8, 1012-1027, DOI: 10.1080/14693062.2018.1470489, Available at SSRN: https://ssrn.com/abstract=3378715

Sharon Mascher (Contact Author)

Faculty of Law, University of Calgary ( email )

University Drive
Calgary, Alberta T2N 1N4
Canada

Faculty of Arts, Business, Law and Education, University of Western Australia ( email )

M253
35 Stirling Highway
Crawley, Western Australia 6009
Australia

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