The CAE’s joint project with the Conference Board of Canada examining the economic impact of implementing the recommendations of the Trottier Energy Futures Project is drawing to a conclusion, with the final report issued on 6 September. The two organizations will jointly present a webinar on the results on 8 September and have briefed a number of federal government officials on the results.
Our analysis reached several conclusions:
- Introducing a carbon tax leads to higher prices across the economy which reduce purchasing power.
Revenue recycling and the depreciation of the exchange rate provide important offsetting impacts.
Overall, the negative impact on the economy from the carbon tax studied in this analysis is small, but so also is the reduction in GHGs.
Pricing carbon and decarbonizing our electricity system will need to be accompanied by trillions in investment spending on clean energy infrastructure and significant changes to the way we consume energy to achieve our commitments under the Paris Agreement.
The full report may be downloaded here: