Canada announces carbon price of $50 a tonne

The Canadian government has announced that it will implement a carbon price of CAD 50 a tonne by 2022. The carbon pricing scheme is needed to help Canada meet its emission targets under the Paris climate agreement, said Prime Minister Trudeau.

Justin Trudeau has given Canadian provinces a choice: either adopt a carbon pricing scheme by 2018 or the federal government will impose a carbon price for them.

The Canadian prime minister has clear ideas of what this price should be.

“The government proposes that the price on carbon pollution should start at a minimum of CAD 10 per tonne in 2018, rising by CAD 10 each year to CAD 50 a tonne by 2022,” he said on Monday in the Canadian House of Commons.

Trudeau is putting the provinces under pressure to take action: if a province doesn’t adopt a carbon price or a cap-and-trade system by 2018, the government would implement a price for them.

Whatever approach a province chooses, any revenues generated under the system would stay in the province where they are generated, he added.

The objective of a carbon pricing scheme or price is to reduce Canada’s greenhouse gas emissions by 30 per cent over 2005 emissions by the year 2030.

Trudeau insisted that a fixed and rising carbon price will be good for the country. It would encourage innovation because businesses will have to find new ways to reduce their emissions. This would bring new job prospects for Canadians.

A number of leading businesses in Canada, as well as energy producers and natural resource companies, have spoken in favour of carbon pricing.

At CAD 10 per tonne, the Canadian carbon price would be significantly lower than that in Europe, which is currently being traded on the European Energy Exchange (EEX) at EUR 5.20 per tonne.

 

Image credit: Wisconsin Department of Natural Resources, flickr/Creative Commons

 

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