IDEAS home Printed from https://ideas.repec.org/a/ctf/journl/v73y2025i1p95-105.html
   My bibliography  Save this article

Policy Forum: Are Carbon Contracts for Difference Well Suited for Canada?

Author

Listed:
  • Wei Cui

    (Peter A. Allard School of Law, University of British Columbia)

Abstract

At least up to the release of the federal 2024 budget, many Canadian politicians, climate policy think tanks, and industry groups promoted carbon contracts for difference (CCfD) to complement carbon pricing. This commentary urges caution against the broad adoption of CCfDs. The author begins by noting that the current designs of provincial output-based pricing systems (OBPS) are not consistent with the expectation of the systems delivering robust price signals. He argues that CCfDs depend on such price signals, and they are not a plausible policy for encouraging the emergence of such signals. The author then argues that it is hard to justify the government making a bet against itself on the "policy price" of carbon. An extensive scholarly literature has long argued against providing businesses with "certainty" against future policy changes in general, and there is little reason to think carbon pricing is relevantly different. The author concludes that, overall, the use of CCfDs should remain narrowly targeted.

Suggested Citation

  • Wei Cui, 2025. "Policy Forum: Are Carbon Contracts for Difference Well Suited for Canada?," Canadian Tax Journal, Canadian Tax Foundation, vol. 73(1), pages 95-105.
    • Handle: RePEc:ctf:journl:v:73:y:2025:i:1:p:95-105
    DOI: https://doi.org/10.32721/ctj.2025.73.1.pf.cui.ccfd
    as

    Download full text from publisher

    File URL: https://www.ctf.ca/EN/Publications/CTJ_Contents/2025CTJ1.aspx
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.32721/ctj.2025.73.1.pf.cui.ccfd?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ctf:journl:v:73:y:2025:i:1:p:95-105. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jim Lyons (email available below). General contact details of provider: https://www.ctf.ca/EN .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.