Canadian Carbon Pricing: The Path of Retreat

Event Description

The Canadian public widely anticipates the demise of the federal fuel charge in 2025, and politicians and journalists now frequently refer to "industrial carbon pricing" as the main line of defense still holding in Canada's GHG emission reduction plan. This talk examines this key component of Canadian carbon pricing, namely federal and provincial output-based pricing systems (OBPS). The research assembles hitherto obscure information with respect to eligibility for participation in OBPS, stringency of emission reduction requirements, total cost to emitters, the size of emission trading markets, as well as methods of controlling the supply of emission credits on each market. Drawing on recent economic research, the talk critically evaluates OBPS design, as well as the use of carbon contracts for difference (CCfD) in connection with carbon pricing. It argues that as provinces rush to reduce the cost of OBPS for major emitters, a political discourse that achieving emission reduction can be relatively costless for Canada's economy is gaining ascendence. This obscures the basic rationale for robust carbon pricing, namely that it is likely the least costly way of achieving emissions reductions.

The talk builds upon and extends two essays forthcoming in the Canadian Tax Journal, “Comparing Canadian Output-Based Pricing Systems” and “Are Carbon Contracts for Difference Well-Suited for Canada?” Those interested can access the essays through the embedded links. 

Please contact burchill@allard.ubc.ca for the Zoom link.

Speaker

Professor Wei Cui joined the law faculty at the University of British Columbia in 2013. His research and writing span a wide range of topics in tax law and policy, including international taxation, tax administration and compliance, tax and development, the value added tax, and tax and spending policies targeted at the labor market. His current research projects examine the design of international taxation in light of the evolution of international trade, and compare redistributive policies in democratic v. authoritarian countries. Wei also has secondary research interests in the modern administrative state, especially the analysis of interactions among the legislative, executive, and judicial branches of government in parliamentary polities and in non-democratic regimes.