Economic
Instruments for Long-term Reductions in Energy-based Carbon
Emissions
By the National Round Table on the Environment and the Economy
Federal and provincial governments should consider
a range of fiscal instruments to promote long-term reductions
in carbon emissions.
Canada is committed to large-scale greenhouse
gas (GHG) reductions and will host the world at the upcoming
United Nations meeting in Montreal this November. New and
innovative methods are needed to effectively address this
monumental task as the global community turns to Canada to
lead the next phase of discussions in the fall.
In Economic Instruments for
Long-term Reductions in Energy-based Carbon Emissions,
the NRTEE’s Task Force on Ecological Fiscal Reform and
Energy recommends a constructive and effective approach to
addressing this issue with a combination of broad-based and
targeted measures, including subsidies, credits, user fees
and taxes, to encourage reductions in the long-term of greenhouse
gases and the promotion of key energy technologies.
Market-based instruments include the concept of “ecological
fiscal reform (EFR)” – an integrated strategy
to redirect taxes and government spending to encourage a shift
toward sustainable development. EFR is based on the understanding
that how the government taxes and spends has a tremendous
effect on the way the economy works – and the way to
maximize this impact is to ensure policies that work together
to support goals such as sustainable energy.
The appropriate signals from governments to industry and consumers
encourage the optimal allocation of resources to achieve environmental
and economic policy objectives at a lower cost.
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