Putting a price on carbon pollution is widely recognized as the most cost effective policy to cut emissions. And if there were any doubt about this, Canada is the proof. Canada has had carbon pricing in place in every jurisdiction since 2019. Since then, we’ve seen first-hand how this policy has helped cut emissions while putting money back in people’s pockets and spurring innovation.
We have set our carbon price trajectory all the way to 2030 to provide certainty for households and businesses. Our approach to pricing is flexible, adaptable, and focused on principles of equity. We use revenues to directly support households in a way that benefits low-income and vulnerable communities the most. We have different pricing systems in different parts of the country that are tailored to local economies. We have designed our systems to decarbonize industries while also supporting their competitiveness and limiting the risk of carbon leakage.
Pollution pricing is doable, it works, and it’s worth fighting for —not just in Canada but around the world. After all, climate action isn’t something any one country can do alone. That’s why at COP26, I challenged countries to adopt or expand carbon pricing, with a goal of tripling global coverage from around 20 percent of global greenhouse gas (GHG) emissions today to 60 percent by 2030. In the months since, I have been heartened to hear support for this goal from leaders around the world.
Countries are working together to align policies and coordinate efforts, through organizations like the G7 Climate Change Mitigation Working Group, the International Monetary Fund, the Organisation for Economic Co-operation and Development (OECD), and the Carbon Pricing Leadership Coalition. Through initiatives like the World Bank’s Partnership for Market Implementation, countries are sharing best practices and supporting emerging systems. The momentum is there. So let’s keep going.
I am calling on governments and businesses to make new carbon pricing commitments. For those already pricing pollution, it could be a commitment to higher prices, expanded coverage, or technical support for emerging systems. In Canada, our price on carbon pollution will rise to $170 per tonne by 2030. For those not yet pricing pollution, it could be a pledge to put a system in place. Canada will be ready with a new commitment of our own to help guarantee the future price of carbon pollution, so that businesses can plan investments knowing that the price will increase as planned.
I spent the first six years of my time as Prime Minister working for pollution pricing at home. I’m ready to spend the years ahead bringing this work to the world stage. Climate change is a daunting challenge that can only be met by fully deploying our best, most economically efficient tools. And that means backing a global effort to ensure it is no longer free to pollute anywhere.
This piece appears in the Carbon Pricing Leadership Report 2021-22. The full report is available for download here.
