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For two decades, Canadian governments have set ambitious targets for reducing greenhouse gas emissions, but their policies have consistently failed. Like previous governments, today's federal Conservative government promises that its [...]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.reseneeco.2006.03.002 Byline: Mark Jaccard, Nic Rivers Keywords: Climate policy; Timing; Delay Abstract: Some recent research suggests benefits to a delayed CO.sub.2 emission reduction strategy. If the target level of atmospheric CO.sub.2 concentration can be achieved in spite of delay, several factors suggest economic benefits to a delay strategy. However, the analyses that lead to these conclusions typically ignore or underestimate the significant heterogeneity in the turnover rate of society's capital stock. This research explores the relationship between the turnover rate of capital stocks and the delay decision using a model and empirically estimated abatement costs. The results suggest that under many different assumptions, an early start at CO.sub.2 abatement for long-lived capital stocks would be economically optimal. Author Affiliation: School of Resource and Environmental Management, Simon Fraser University, Vancouver, Canada V5A 1S6 Article History: Received 9 April 2004; Revised 21 December 2005; Accepted 8 March 2006

The relation between the timing decision for carbon dioxide abatement and turnover rate of capital stocks of manufacturing industries is studied.

Various hybrid economic models for representing technologies that can bring correlation between energy and economic policies are presented.

Byline: Nic Rivers, Mark Jaccard Canada has committed internationally to several agreements to limit climate change, most recently by ratifying the Kyoto Protocol in 2002. However, its domestic climate change policy is not reflective of these international commitments. In particular, federal government climate change policy over the last decade has emphasised noncompulsory policies such as voluntarism, information provision, and modest subsidies. These policies are designed primarily to engender minimal political resistance, and have been relatively ineffective in providing the incentives and regulatory structure for the dramatic technological and behavioural change required for significant greenhouse gas emissions reductions. Without a major change in direction towards more compulsory policies, it seems unlikely that Canada will achieve significant domestic greenhouse gas reductions over and beyond the Kyoto Protocol time frame. We suggest a more compulsory policy approach dominated by market-oriented regulations. When designed appropriately, this type of policy stimulates the development and commercialisation of new technologies without dramatically affecting prices of energy or goods.

The article examines the federal and provincial policies in Canada on climate change mitigation. It presents the medium-term emission reduction commitments that have been made and the federal government business-as-usual forecast for each province and for the country. Carbon pricing policies proposed and implemented are discussed. It is concluded that government policies at both the federal and provincial levels are less stringent than will be required to meet the commitments by the same governments.

To reduce greenhouse gas emissions from large industries the Canadian government proposed using a tradable emissions performance standard approach, where the intensity of emissions, rather than the absolute level, is regulated. Unlike a cap and trade system, an emissions performance standard does not guarantee a certain overall level of emission reductions, a fact that has led to significant criticism. However, because of the dynamics of performance standards, they may reduce concerns over reductions in international competitiveness in cases where a country has climate policies that are more aggressive than those of some of its trade partners. Likewise, a performance standard may mesh more efficiently with existing taxes and therefore cause less overall economic impact than an absolute cap and trade system. This paper considers the theoretical arguments for and against such a performance standard system and evaluates it in comparison to a cap and trade system using a dynamic general equilibrium model applied to Canada.