Better Together? The Implications of Linking Canada-US Greenhouse Gas Policies
AbstractThe Canadian and American economies are inextricably intertwined through trade. As the two countries debate plans to curb greenhouse gas (GHG) emissions, policymakers in both countries must consider how emissions policies, such as an emissions trading system that sets economy-wide limits on GHG emissions and allows firms to trade GHG emissions permits for the right to pollute, might coexist. This paper analyzes the implications of linking elements of potential Canadian and American GHG emissions trading systems, including the scope of emissions covered by the systems, national emissions-reduction targets, emissions permit prices, and cross-border trade of emissions permits. This assessment indicates that linked allowance trade with the US would not necessarily be the best policy for Canada to pursue, as the US develops its own system. Instead, Canada should forge ahead with its own system, while minimizing the risk of getting too far out of step with the US on relative carbon prices. A policy of “go-it-alone” with similar carbon price expectations, and a targeted innovation agenda, seems to be a low-risk strategy for Canada as it develops its emissions policies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by C.D. Howe Institute in its journal C.D. Howe Institute Commentary.
Volume (Year): (2010)
Issue (Month): 307 (August)
Economic Growth and Innovation; greenhouse gas (GHG) emissions; Canada; US; emissions trading system;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F18 - International Economics - - Trade - - - Trade and Environment
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Angelo Melino & Michael Parkin, 2010. "Greater Transparency Needed," e-briefs 102, C.D. Howe Institute.
- Robert Knox, 2010. "Who Can Work Where: Reducing Barriers to Labour Mobility in Canada," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 131, June.
- William B.P. Robson & Colin Busby, 2010. "Freeing up Food: The Ongoing Cost, and Potential Reform, of Supply Management," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 128, April.
- Lawrence L. Herman, 2010. "Trend Spotting: NAFTA Disputes After Fifteen Years," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 133, July.
- John Richards, 2010. "Reducing Lone-Parent Poverty: A Canadian Success Story," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 305, June.
- Jan Carr, 2010. "Power Sharing: Developing Inter-Provincial Electricity Trade," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 306, July.
- David Johnson, 2007. "School Grades: Identifying Albert's Best Public Schools," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 104, September.
- Kevin D. Moore & William Robson & Alexandre Laurin, 2010. "Canada’s Looming Retirement Challenge: Will Future Retirees Be Able to Maintain Their Living Standards upon Retirement?," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 317, December.
- Stuart Landon & Constance Smith, 2010. "Energy Prices and Alberta Government Revenue Volatility," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 313, November.
- Philippe Bergevin & David Laidler, 2010. "Putting Money Back into Monetary Policy: A Monetary Anchor for Price and Financial Stability," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 312, October.
- Andrew Green & Michael Trebilcock, 2010. "The Eco-Fee Imbroglio: Lessons from Ontario’s Troubled Experiment in Charging for Waste Management," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 316, December.
- Benjamin Dachis, 2010. "Picking up Savings: The Benefits of Competition in Municipal Waste Services," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 308, September.
- David Longworth, 2010. "Warding Off Financial Market Failure: How to Avoid Squeezed Margins and Bad Haircuts," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 135, December.
- Bob Baldwin & Brian FitzGerald, 2010. "Seeking Certainty in Uncertain Times: A Review of Recent Government-Sponsored Studies on the Regulation of Canadian Pension Plans," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 310, September.
- Pierre Siklos & Andrew Spence, 2010. "Faceoff: Should the Bank of Canada Release its Projections of the Interest Rate Path? – The Cases For and Against," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 134, October.
- Clyde Goodlet, 2010. "Too Big to Fail: A Misguided Policy in Times of Financial Turmoil," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 311, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristine Gray).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.