Reducing
Sulphur Emissions from Heavy Fuel Oil Use —
A Quantitative Assessment of Economic Instruments:
Executive Summary
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KB)
Prepared by The Delphi
Group & Gardner Pinfold & Associates
Prepared for The National Round
Table on the Environment and the Economy
March 2003
1.0 Introduction
The National Round Table on the Environment and the
Economy (NRTEE) has initiated a program on Ecological Fiscal Reform
(EFR) to investigate the use of various economic instruments to
address environmental concerns. The case study on reducing sulphur
emissions from use of heavy fuel oil (HFO) focused on the relative
merits of using economic instruments – for example, increased
product tax or capital cost allowance incentives – compared
with more common approaches, such as regulation, in meeting environmental
policy objectives.
Previous experience from EFR case studies indicates the right conditions
must be present to investigate the practical application of economic
instruments, since environmental concerns that are already being
addressed farther along in the policy development process present
limited opportunities for a new approach. A preliminary review revealed
favourable conditions to study the use of economic instruments to
reduce sulphur emissions from HFO use, as follows:
- while Environment Canada had discussed action to
address sulphur levels in HFO, the issue was still at the “problem
definition” stage;
- the application of economic instruments had been
considered in the department’s Notice of Intent (NOI); and
- experience in the European Union (EU) suggests
economic instruments can be successfully employed to reduce sulphur
pollution from HFO use.
This Executive Summary presents background information
on HFO and its use, as well as the key findings and conclusions
of the cost-effectiveness analysis comparing economic instruments
to regulation.
Next: 2.0 What
is heavy fuel oil?
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