IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Electricity Market Deregulation and CO2 Emissions Reduction: Dancing at Different Tunes Across Canada and U.S. Border

Listed author(s):
  • Bernard, Jean-Thomas
  • Clavet, Frederic
  • Ondo, Jean-Cleophas

Canada has ratified the Kyoto Protocol while the United States, its main trading partner, have not. A major concern of Canadian industrial producers is the negative impact on competitiveness of programs designed to reduce greenhouse gas emissions (GHG). To alleviate this concern, the Government of Canada is proposing an approach that pus a ceiling on the price of emission permits paid by industrial users and that allocate emission permits on the base of output. We analyze how such a scheme would affect electricity production and trade among three Canadian provinces (Ontario, Québec and New Brunswick) and two U.S. regions (New England and New York), which are linked by large interconnections and which exchange electricity on other wholesale markets. We find that the Canadian government approach has almost no effect on electricity production and trade flows; so it is very effective at protecting the competitive position of electricity producers. However it does little to reduce GHG emissions. If we were to unbundle emission permits allocation and production and let the Canadian electricity producers face the permit price ceiling of $15 per tonne of CO2 equivalent, then the effect on electricity production in Canada depends on whether the U.S. regions persue an aggressive or lenient policy with respect to GHG emissions. The overall impact on GHG emissions in the five regions is rather small.

If 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.

File URL:
Download Restriction: no

Paper provided by Université Laval - Département d'économique in its series Cahiers de recherche with number 0308.

in new window

Date of creation: 2003
Handle: RePEc:lvl:laeccr:0308
Contact details of provider: Postal:
Pavillon J.A. De Sève, Québec, Québec, G1K 7P4

Phone: (418) 656-5122
Fax: (418) 656-2707
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:lvl:laeccr:0308. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Manuel Paradis)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.