Fiscal Policy for Long-term Carbon Emission Reductions

Briefing Note and Budget Advice
The National Round Table on the Environment and the Economy

The program on Ecological Fiscal Reform and Energy has, through its analysis and consultation processes, generated a number of findings and recommendations that are of direct relevance to current deliberations for the 2005 budget. What is provided in this briefing note are the program's key findings and recommendations. Both the findings and recommendations should be seen as directional in nature, although they do contain some proposals relating to program expenditures and tax measures. The findings relate to the broad lessons that emerged in the context of the program's examination of "fiscal policy that consistently and systematically reduces energy-based carbon emissions in Canada, both in absolute terms and as a ratio of GDP, without increasing other pollutants". The recommendations focus more on economic instruments themselves, and draw directly from the three case studies carried out, on (i) industrial energy efficiency, (ii) emerging renewable energy technologies, and (iii) hydrogen. We believe this note will provide decision-makers with some critical perspective on the opportunities and challenges that lie in the use of fiscal policy to promote long-term carbon emissions. Next Background