The National Round Table on the Environment and the Economy (NRTEE) released its report entitled Getting to 2050: Canada's Transition to a Low-emission Future, on January 7, 2008.

The key recommendation of the report is the establishment of an economy-wide price signal for carbon emissions as soon as possible. The NRTEE research shows the preferred policy would be market-based, such as an emissions tax, a cap-and-trade system, or a combination of the two. It also emphasizes the need for an integrated approach.

Getting to 2050 is a response to a request from the Minister of the Environment to explore how Canada could achieve deep, long term GHG emission reduction targets (20% by 2020 and 60-70% by 2050 below 2006 levels) and meet air pollutant reduction targets.

The report shows that the current government plan will likely not allow Canada to meet the targets referred to above. It advances the need for market-based mechanisms above and beyond what is currently planned and describes 3 alternatives:

  1. an economy-wide tax on GHG emissions;
  2. a downstream cap-and-trade system (capping emissions from large industrial emitters); and
  3. an upstream cap-and-trade system (capping emissions on the amount of carbon content in the fossil fuel that can be sold by Canadian energy producers and importers with tradable permits to entities covered by the program).

The research did not identify a best alternative. Findings suggest that a combination of these alternatives may be the most effective. For example, a carbon tax may be used to provide a price signal to those sectors not covered by the cap and trade system, therefore creating an economy-wide price signal while allowing for a trading regime to be developed to lower costs.

The report sets out five "enabling conditions" that the NRTEE recommends be reflected in Canada's long-term climate change policy framework and emphasises the importance of these conditions throughout the report. They are as follows:

  1. Canada will have to act in concert with the world, to address competitiveness issues;
  2. Policy certainty beyond the short term is critical, to ensure predictability for new investments;
  3. An economy-wide emission price signal with complementary regulatory policies is necessary, to foster investment, technology deployment, and change consumer behaviour;
  4. Technology deployment is imperative, and will need to be wide-spread throughout all segments of the economy; and
  5. An integrated approach to climate change and air pollution should be pursued, to reduce costs and improve outcomes.

The NRTEE reports that delaying action increases both economic and environmental risk and therefore recommends a deeper, faster, approach to achieve the government's long-term GHG reduction targets, stating:

"It is in Canada's national interest to begin the transition to a low-emission future immediately."

It did, however, warn that some sectors would be hit harder than others in the transition. Findings suggest that linkages to international markets and trading regimes will be a key component of a successful transition.

The research also showed that there are mutual benefits to both GHG and other air pollutant reductions when an integrated approach is taken. The report finds that an integrated approach may even result in lower costs associated with GHG reductions and greater air pollutant reductions. More information, including the full-text of the report can be found at the following link: