ENERGY

Ecological Fiscal Reform

Fiscal policy is sometimes at odds with Canada?s stated sustainable development objectives. While the federal government has embraced the importance of sustainable development as a policy objective, the NRTEE notes that ?it has employed fiscal policy, its single most powerful instrument to achieve that objective, only to a very limited degree?.

Fiscal instruments ? such as taxes and tradeable emission permits ? can be the most environmentally effective. They are simple, flexible and economically efficient because they provide a continuous incentive to firms and individuals to find innovative and cost-effective ways to reduce pollution. Taxation policy could therefore expand the array of available energy options in Canada by encouraging, for example, the use of less carbon-intensive fuels, processes and technologies.

Our research and analysis suggests market-based instruments that use a mix of economic incentives can be more effective at stimulating an innovative economy?and encouraging greenhouse gas reductions?in the long run than the laws and regulations past governments have typically relied upon.

The NRTEE research was conducted in two phases:

• Phase 1: 2001-2002 ? the role that economic instruments can play in advancing sustainable development objectives.
• Phase 2: 2003-2005 - the use of economic instruments in achieving long-term reductions in energy-based carbon emissions.

Status: Reports Released.

News Release

August 18, 2005 ? ?Canada Can Reduce Greenhouse Gas Emissions by Using Fiscal Instruments and Incentives, New National Round Table Report Says?

Meetings and Events

• Hydrogen Scoping Group Meetings ? May 28, 2003, January 13, 2004, April 7, 2004
• Renewable Power Scoping Group Meetings ? June 3, 2003, January 14, 2004, April 6, 2004
• Energy Efficiency Scoping Group Meetings ? June 18, 2003, January 15, 2004, April 5, 2004
• Meeting on Research and Methodology ? January 14, 2004
• Ecological Fiscal Reform Workshop - October 12?13, 2004