Clean Prosperity has developed a set of recommendations to help the Canadian federal government meet its 2030 Paris Agreement climate target, and achieve the goal of net zero emissions by 2050. The recommendations address carbon pricing, carbon removal, and complementary policies.
Revenue-neutral carbon pricing like the system we have in Canada is widely recognized as the lowest-cost, most pro-growth way to reduce emissions, due to its simplicity, transparency, and flexibility. Carbon pricing has been endorsed by hundreds of economists in Canada, the US, and around the globe.
Carbon pricing is like a tailwind that moves all boats in the right direction—it incentivizes every part of our economy to reduce emissions, and rewards those who make low-carbon choices. It signals to businesses that there will be money to be made in new technology and innovation that reduces carbon footprints.
Carbon taxes work. The Canadian government has estimated that current carbon pricing policies will reduce emissions by 50-60 Mt by 2030, the largest reduction of any policy in the Pan-Canadian Framework on Clean Growth and Climate Change.
In Canada, decarbonization will require a massive program of atmospheric carbon removal.
First, we’ll need to remove carbon from the atmosphere to counteract emissions from sectors that will be too difficult or costly to decarbonize before 2050, like aviation.
Then, even after reaching net zero by 2050, we’ll need to pull carbon out of the air and sequester it in order to reduce levels of atmospheric carbon enough to stay below a 1.5°C increase in temperature by 2100.
Natural solutions like tree planting, better forest management, and regenerative agriculture can play an important role. But we’ll need much more carbon removal than these solutions can provide in order to meet our targets.
We’ll need negative emissions technologies like direct air capture to get us to our net-zero goal by 2050. Canada should be acting now to develop the technologies that will be needed in the coming decades. Rising carbon prices can help to unlock them
A third component of Canada’s climate plan should be to develop smart climate policies that can complement carbon pricing in three ways:
- Addressing emissions in sectors that do not respond well to carbon pricing, such as buildings and agriculture.
- Advancing promising technologies—like clean hydrogen—that need targeted policy support in the early stages of development, before market forces and carbon pricing can help scale them up.
- Establishing an alternative policy pathway to address harder-to-abate emissions in case negative emissions technologies don’t scale up as quickly as expected.
Carbon Budget Approach
The total amount of carbon we can emit before risking dangerous levels of planetary warming is called the global carbon budget.
Climate models disagree, but almost all predict that global emissions are likely to warm the planet past the red line of 1.5°C in the coming decades. We’ll have to remove enough carbon from the atmosphere to cool the Earth back down below that 1.5°C threshold by 2100.