Ecological
Fiscal Reform (EFR) and Energy
Fiscal policy is one of the most powerful
means at the government’s disposal to influence
outcomes in the economy. 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.
The goal of the program was to demonstrate
how the government could use fiscal policy as a strategic
tool to achieve environmental and economic objectives
simultaneously. Through a series of case studies and
consultations, the Round Table examined how taxation
policy could broaden the array of available Canadian
energy options by enabling competitive production and
use of less carbon-intensive fuels, processes and technologies.
The NRTEE’s research and analysis
suggests that market-based instruments that use a mix
of economic incentives can be more effective in the
long run than measures typically used in the past by
governments – laws and regulations. EFR is an
example of a successful economic instruments and market-based
approach to stimulate a more innovative economy.
The Round Table recommends a constructive
and effective approach with a combination of broad-based
and targeted measures, including subsidies, tradable
permits, credits, user fees and taxes, to encourage
reductions in the long-term of greenhouse gases (GHG)
and the promotion of key energy technologies.
Economic Instruments for Long-term
Reductions in Energy-based Carbon Emissions –
State of the Debate report, released in August
2005, synthesizes the major conclusions of the two year
multistakholder process and includes a set of recommendations
aimed at helping the country take a leadership position
in the innovation of technologies that will lay the
foundations of a sustainable energy future, in Canada
and around the world.
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