Canadian Subnational Climate Change Policy

Using a framework, this paper evaluates British Columbia’s and Alberta’s carbon tax and Ontario’s and Quebec’s cap and trade system, to determine how effective these policies will be at reducing GHG emissions cumulatively. The framework has been primarily shaped via a literature review. The framework consists of the following evaluative criteria: A) policy effectiveness, B) allocation of public resources and C) policy design. Each criterion consists of multiple questions and sub-questions which are used to determine the effectiveness of the policy. The criterions take into account things such as the carbon scope, price of carbon, the extent of emission reductions, actual and anticipated reductions, allocation of generated revenues, political acceptability, gaming prevention, policy rigorousness, evaluation, and transparency. Since all policies besides BC’s are in their infancy, to satisfy the criteria, this paper primarily utilizes government documents, working paper, and commentaries. Recommendations and findings are summarized in the appendix.

Current modeling and data suggest that all four policies will not result in enough emission reductions to allow the respective provinces to achieve their emissions reduction goals. Although, some are further off the mark than others. However, it is blatantly clear that the recommendations that are required with the timeframe allotted is steep to say the least. Ultimately, each policy can benefit from a price on carbon that is significantly greater than $30/tCO2e and a much leaner scope. Particularly, Alberta and Ontario damage their scope substantially to preserve their large emitters. Blanketed exemptions seem to be a popular theme between these two provinces. Better redistribution of revenues to achieve further reductions can also be had, particularly from British Columbia. Notably, Quebec sets the pace for good transparency and something that the other three policies should aspire too. All provinces can also improve their reporting and evaluation processes.