{"id":72946,"date":"2017-03-02T23:21:47","date_gmt":"2017-03-02T23:21:47","guid":{"rendered":"http:\/\/usa.timesofnews.com\/bank-of-canada-official-touts-pricing-carbon-to-reduce-climate-change-costs.html"},"modified":"2017-03-02T23:21:47","modified_gmt":"2017-03-02T23:21:47","slug":"bank-of-canada-official-touts-pricing-carbon-to-reduce-climate-change-costs","status":"publish","type":"post","link":"https:\/\/usa.timesofnews.com\/breaking-news\/political\/bank-of-canada-official-touts-pricing-carbon-to-reduce-climate-change-costs.html","title":{"rendered":"Bank of Canada official touts pricing carbon to reduce climate change costs"},"content":{"rendered":"

The deputy governor of the Bank of Canada\u00a0touted the case for pricing carbon during a speech in Montreal<\/a> on Thursday, warning that\u00a0climate change and actions to address it will have “material and pervasive effects on Canada’s economy and financial system.”\u00a0<\/p>\n

Citing estimates by the now defunct National Roundtable on the Environment and the Economy, a former federal agency that was disbanded by Stephen Harper’s Conservative government,\u00a0Timothy Lane noted that Canada could “face annual costs of between $21 billion and $43 billion by the 2050s” if action is not taken to mitigate global warming.<\/p>\n

Noting that climate change is associated with extreme weather events, Lane pointed to the wildfires in Alberta\u00a0that reduced Canada’s\u00a0GDP by one per cent in the second quarter of 2016.<\/p>\n

Lane said moving to a low-carbon economy will require\u00a0profound structural changes to the Canadian economy.<\/p>\n

In terms of addressing climate change, Lane focused on two options for policymakers: pricing carbon and financing green initiatives.<\/p>\n

A price on carbon can be established through a carbon tax or a cap-and-trade system, but “either way, we create incentives to reduce greenhouse gas emissions in the most efficient way.”<\/p>\n

Climate change costs<\/h2>\n

Pricing carbon is a central element of the Liberal government’s national framework on climate change. Federal Conservatives and Saskatchewan Premier Brad Wall have loudly criticized the Trudeau government’s plan to establish\u00a0a price.<\/p>\n

“In economic terms, climate change is a negative externality. Any individual or company that engages in activities that generate greenhouse gases imposes a cost on everyone else by contributing to climate change,” Lane said. “Establishing a price for carbon emissions forces polluters to bear those wider social costs.”<\/p>\n

Despite the skepticism of some, Lane said,\u00a0price incentives work\u00a0to change behaviour, pointing to an estimate that emissions have been reduced in British Columbia as a result of that province’s carbon tax.<\/p>\n

The deputy governor acknowledged that it can be costly for businesses and households to reduce their carbon footprint,\u00a0but he noted that the revenue a government receives from pricing carbon can be used to lower other taxes and assist industries and families.<\/p>\n

In the prepared text of his remarks, Lane also noted that pricing mechanisms can be designed to address competitiveness concerns that trade-exposed industries might have.<\/p>\n