Better Environmental Policy Through Full-Cost Pricing

The School of Public Policy Releases Paper Calling for Less Regulation, More Predictable Taxation

CALGARY, March 8, 2012 /CNW/ - In a study released today by The School of Public Policy and sponsored by the Manning Foundation for Democratic Education, author Nancy Olewiler issues a fundamental challenge to the way federal environmental policy is approached in Canada.

Olewiler calls for the adoption of full-cost pricing, which she describes "means that we find ways to adjust market prices to reflect not only the direct costs of production of goods and services, but the impact production and consumption have on the environment."

The author believes that the current system of complex environmental regulation as well as subsidies to particular industries is highly inefficient. A better replacement would be the reduction or elimination of subsidies and regulation, and the imposition of a transparent and equally applied system of full-cost pricing. That would include full-cost pricing on energy production including, potentially, a carbon tax.

"In conclusion, three policy directions — phasing out subsidies; investing in natural capital and its ecosystem goods and services; and full-cost pricing of energy — can form the foundations of an environmental policy direction in upcoming budgets that will move the country closer to achieving the goals of a clean and healthy environment with an efficient and productive economy."

The study can be found online at www.policyschool.ucalgary.ca/publications.

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