Emissions Trading vs. Carbon Taxes: What Gets Us Closer to a Zero Emissions Future? Lessons from European Implementations

In 2017, following the Paris Agreement, the current federal government changed Canada’s stance on climate change policy by requiring provinces to implement their own carbon pricing mechanisms by 2018. The provinces are to choose between Carbon Taxes and Emissions Trading Systems. I ask which produces the best results for provinces who have not yet implemented pricing. Using Denmark, Norway, Ireland, and Spain, along with the European Union Emissions Trading System I assess the results these mechanisms have produced over an extended period of time. I find that emission reductions across jurisdictions are inconsistent but provide policy lessons for Canada, both federally and provincially. I also find that federalism in Canada provides its own toughest challenges when it comes to the implementation of consistent policies. As global pressure intensifies on carbon mitigation and emissions reduction, I find three types of costs for the federal government’s consideration to reduce its carbon footprint.