Smart Policies Can Moderate Regional Economic Harm of Greenhouse Gas
Reduction: C.D. Howe Institute

TORONTO, Nov. 25 /CNW/ - Policymakers have the policy tools needed to ameliorate the regional economic harm that taxing GHG emissions can cause, says a study released today by the C.D. Howe Institute. In Taxing Emissions, Not Income: How to Moderate the Regional Impact of Federal Environment Policy, authors Jotham Peters, Chris Bataille, Nic Rivers and Mark Jaccard recommend returning to the provinces the revenues collected through auctioned emissions permits, so that they may offer personal and corporate income tax relief, all to moderate the regional impact of GHG carbon policy.

A price on GHG emissions will affect Canadian provinces differently, possibly undermining support for a policy that incurs regional transfers of income. This Commentary measures the financial transfers leaving regions under different policy scenarios; comparing the effects of an intensity-based cap-and-trade system, auctioning emissions permits coupled with federal corporate and personal income tax cuts, and an auction with provincial corporate and income tax cuts.

Allowing provinces to retain the revenues collected from auctioned emissions permits would achieve a greater degree of regional equity than the other policy options.

For the Commentary go to www.cdhowe.org/pdf/Commentary_314.pdf

For further information:

Mark Jaccard, Professor, Simon Fraser University;
Jotham Peters, Research Associate, Simon Fraser University; or
Ben Dachis, Policy Analyst,
C.D. Howe Institute. Phone: [phone]