Thanks very much, Madam Chair. I'm honoured by the opportunity to appear before you today.
I'm a senior associate with the International Institute for Sustainable Development. I'm an economist with 35 years of experience. I'll be co-presenting with my colleague, Steven Haig, who's a policy adviser with IISD's energy program. IISD is a globally recognized think tank headquartered in Winnipeg, with over 300 experts working around the world to advance sustainable development.
This is a critical juncture for Canada's industrial carbon pricing regime. The federal government has an ongoing review of the regime's adequacy and equivalency provisions for provinces and territories. The recent federal Alberta MOU commits Alberta to an expeditious and significant strengthening of its industrial carbon pricing regime. Meanwhile, major climate policies in Canada have been abandoned or weakened, with assurances that a strengthened industrial carbon price will be able to pick up the slack.
With this in mind, we’ve distilled five messages from our extensive research on industrial carbon pricing in Canada.
Number one, industrial carbon pricing works. As an economist, I know that my professional colleagues don’t agree on much, but there is widespread agreement that a carbon price is the most efficient way to achieve industrial decarbonization. Canada’s large-emitter trading systems are a model. They give carrots to firms that innovate and sticks to those that lag, and they maintain high incentives to act while protecting against competitiveness impacts and carbon leakage. CCI analysis shows them to be Canada’s most effective climate policy tool by far.
Importantly, industrial carbon pricing is not just climate policy. Decarbonizing Canadian industry is essential to maintaining competitiveness in global markets that increasingly care about low-carbon production.