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Beugin, Shaffer – The Climate Policy Certainty Gap And How To Fill It – C.D. Howe Institute

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Canada now has a pan-Canadian carbon price that is due to rise to $170 per tonne by 2030. Yet some firms appear to be holding off on investing capital in expensive, long-lived, low-carbon projects that make sense at $170. Why? The source of that gap, in a word, is uncertainty. It’s one thing for the federal government to commit to $170 per tonne in 10 years. It’s another thing for firms and investors to have the confidence to make big investments now that rely on that future carbon price, given future governments might set a different course. Expectations around future carbon prices matter as much as the price today. As a result, future carbon prices play a key role in determining rates of return for emissions-intensive projects. Expectations of future carbon prices also create an incentive for low-carbon innovation, helping to unlock the wild cards critical for Canada’s path to net zero. This certainty gap is a problem for policymakers because it dilutes the incentives from carbon pri

Home / Publications / Intelligence Memos / Beugin, Shaffer – The Climate Policy Certainty Gap And How To Fill It Media Releases Intelligence Memos | June 4, 2021 Beugin, Shaffer – The Climate Policy Certainty Gap And How To Fill It Share Print DOWNLOAD Cite Summary: Citation . 2021. Beugin, Shaffer – The Climate Policy Certainty Gap And How To Fill It. Intelligence Memos. Toronto: C.D. Howe Institute. Page Title: Beugin, Shaffer – The Climate Policy Certainty Gap And How To Fill It – C.D. Howe Institute Article Title: Beugin, Shaffer – The Climate Policy Certainty Gap And How To Fill It

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