CBC News - Aaron Wherry
Climate change could cost Canada as much as $43B each year, Timothy Lane notes
speech in Montreal
on Thursday, warning that climate change and actions to address it will
have "material and pervasive effects on Canada's economy and financial
system."
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, Timothy 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.
Noting that climate change is associated with extreme weather events,
Lane pointed to the wildfires in Alberta that reduced Canada's GDP by
one per cent in the second quarter of 2016.
Lane said moving to a low-carbon economy will require profound structural changes to the Canadian economy.
In terms of addressing climate change, Lane focused on two options
for policymakers: pricing carbon and financing green initiatives.
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."
Climate change costs
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 a price.
"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."
Despite the skepticism of some, Lane said, price incentives work to
change behaviour, pointing to an estimate that emissions have been
reduced in British Columbia as a result of that province's carbon tax.
The deputy governor acknowledged that it can be costly for businesses
and households to reduce their carbon footprint, but he noted that the
revenue a government receives from pricing carbon can be used to lower
other taxes and assist industries and families.
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.
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