Supporting Carbon Pricing: How to identify policies that genuinely complement an economy-wide carbon price (Ecofiscal Canada)

Carbon pricing is the simplest and most cost-effective way to lower greenhouse gas (GHG) emissions, so it should do most of the heavy lifting in reducing our emissions. However, it can’t quite do it all. Some emissions are difficult to measure and price, and some market problems can impede the effectiveness of the carbon price. Other climate policies are therefore likely to be needed to complement—and not undermine—carbon pricing. This report by the Canadian Ecofiscal Commission presents a framework to identify genuinely complementary policies that can support carbon pricing. It provides key considerations that should be used in the design and evaluation of individual climate policies as well as overall policy packages. The report is available to download on the website of Canada’s Ecofiscal Commission.