"Does Emissions Pricing Hurt Affordability? Quantifying the Effects on Canadian Households" (with Trevor Tombe). IRPP. December 12, 2024.
We investigate the effect of climate policies like emissions pricing on the affordability of essentials such as food, shelter, and energy in Canada. We explore how these policies affect households differently across provinces, family types, and income levels.
We find that while there is considerable variation across households, emissions pricing has only a modest effect on price levels overall. Lump-sum rebates offset the negative effect on affordability for most households and dampen it for others. Policy design, such as output-based allocations within large-emitter systems, further dampen the effect of emissions pricing on the price of most goods and service.
I presented this work at the Canadian Economics Association Annual Meeting in Toronto, Ontario in June 2024, as the Environment and Climate Change Canada Keynote Lecture; slides here.
"Electricity Affordability and Equity in Canada's Energy Transition: Options for Rate Design and Electricity System Funding" (with Brett Dolter). 2022. Scoping paper, Canadian Climate Institute. (Not peer reviewed.)
Aligning Canada’s electricity systems with net zero emissions will increase electricity use and has the potential to increase households’ electricity expenditures. To inform policy discussion and actions for aligning electricity systems with net zero, we explore how net zero investments will affect electricity systems’ costs and households’ expenditures. We find that while electricity use will increase, households’ total electricity expenditures may not.
However, these changes could exacerbate pre-existing equity issues: with a status quo approach to funding electricity system investments, the resulting system is likely to increase electricity expenditures for lower-income households relatively more than higher-income households. We explore two options for mitigating this regressivity in electricity system costs: rate-design changes and tax-system funding of system investment costs. Both approaches are tools that, in different ways, can help address regressivity and electricity affordability.
"A Multiple Account Benefit-Cost Analysis of Coal Mining in Alberta" (with Megan Bailey, Emily Galley, Chris Joseph and Blake Shaffer). The School of Public Policy Publications 14(32). Posted on SSRN. (Peer-reviewed.)
We examine the positive and negative effects of coal mining in Alberta from a social perspective — that of the province of Alberta rather than the project proponent — using benefit-cost analysis. We find small economic benefits in the form of incremental tax revenues ($440 million, undiscounted dollars) and employment earnings by mineworkers ($35 million, undiscounted dollars). In contrast, costs to Alberta are likely to be significant. These costs come from displacing other economic activity (primarily ranching and tourism); significant and adverse environmental impacts on water, wildlife, vegetation and air; a non-zero probability the province will be responsible for reclamation liabilities; negative social impacts on nearby communities; and interference with Indigenous Peoples’ interests and rights. Overall, we conclude that coal mine development is not likely to be a net benefit to Alberta, and the costs are likely to outweigh the benefits.
"A Review of Barriers to Full-Scale Deployment of Emissions-Reduction Technologies" (with G. Kent Fellows and Victoria Goodday). 2021. The School of Public Policy Publications. (Peer-reviewed.)
We review the regulatory, economic, financial and policy environment for cleantech in Alberta, focusing on the petroleum industry, and identify challenges and barriers faced by cleantech proponents.
Working paper version
"Enabling Partial Upgrading in Alberta: A Review of the Regulatory Framework and Opportunities for Improvement" (with G. Kent Fellows and Victoria Goodday). 2019. The School of Public Policy Publications, 12 (December). (Peer-reviewed.)
We examine regulation in Alberta's petrochemical and oil and gas industries, in order to identify any potential regulatory gaps associated with partial upgrading of bitumen, a new technology.
"The Greenhouse Gas Emissions Coverage of Carbon Pricing Instruments for Canadian Provinces" (with Sarah Dobson and Brendan Boyd). 2019. The School of Public Policy Publications, 12 (February). (Peer-reviewed.)
We compare provincial pricing systems (current and former) and the federal benchmark and backstop in Canada, focusing on coverage of the carbon price (types of emissions and sectors of the economy).
Working paper version (Department of Economics Working Paper 2018-07).
"Assessing Policy Support for Emissions-Intensive and Trade-Exposed Industries" (with Sarah Dobson). 2018. The School of Public Policy Publications, 11 (October). (Peer-reviewed.)
We provide an overview of the EITE definitions and support policies in place in Canada and compare those to definitions and policies in Australia, California and the European Union. We evaluate both domestic and international EITE support policies using the metrics of administrative costs, economic efficiency, emissions reduction incentive, and equity across and within sectors.
"The Potential for Canadian LNG Exports to Europe" (with Sarah Dobson, G. Kent Fellows, Dexter Lam and Paul Craig). 2018. The School of Public Policy Publications, 11 (July). (Peer-reviewed.)
We explore market potential in Europe for East Coast Canadian liquefied natural gas (LNG) projects, and assess the competitiveness of those projects relative to U.S. East Coast projects. As a slower-moving and higher-cost jurisdiction, Canada will face challenges entering this market. However, European desire for alternative suppliers may be sufficient to support Canadian projects.
“The Ground Rules for Effective OBAs: Principles for Addressing Carbon-Pricing Competitiveness Concerns through the Use of Output-Based Allocations” (with Sarah Dobson, G. Kent Fellows and Trevor Tombe). 2017. The School of Public Policy Publications, 10 (June). (Peer-reviewed.)
We explain the key principles desirable in implementing output-based allocation systems to mitigate competitiveness concerns from emissions pricing.
"Public-Interest Benefit Evaluation of Partial-Upgrading Technology" (with G. Kent Fellows, Robert Mansell and Ron Schlenker). 2017. The School of Public Policy Publications, 10 (January). (Peer-reviewed.)
Approximately 60 per cent of Alberta’s oil sands production is non-upgraded bitumen which, after being mixed with a diluting agent (diluent) to allow transport, is exported. A popular view within Alberta — and particularly among Albertan politicians — is that a much larger share of oil sands bitumen should be upgraded in the province. We evaluate the potential of partial-upgrading technology from a private and social perspective for Alberta. Based on a model of a single 100,000-barrel-a-day partial upgrader, the value uplift could be $10 to $15 per bitumen barrel.
"Energy Projects, Social Licence, Public Acceptance and Regulatory Systems in Canada" (with John Colton, Kenneth Corscadden, Stewart Fast, Monica Gattinger, Joel Gehman, Martha Hall Findlay, Dylan Morgan, Judith Sayers and Adonis Yatchew). 2016. The School of Public Policy Publications, 9 (May). (Peer-reviewed.)
This white paper reports on the results of a year-long interdisciplinary collaboration aimed at identifying and summarizing extant research regarding social licence and related concepts, with a particular emphasis on understanding its implications for public acceptance of energy projects in Canada, and their related regulatory processes.
“The Case for a Carbon Tax in Alberta” (with Sarah Dobson). 2015. The School of Public Policy Publications, 8 (November). (Peer-reviewed.)
We review and assessing the efficacy of Alberta’s Specified Gas Emitters Regulation (SGER), the major policy instrument the used to regulate and reduce emissions in Alberta. While Alberta displayed leadership as the first jurisdiction in North America to introduce a price on carbon in 2007, SGER has been less than effective in reducing emissions. We find that SGER has only reduced emissions by a maximum of three per cent (relative to what emissions would have been in the absence of the policy) between 2007 and 2014. We discuss alternative policy approaches, and the pros and cons of each, before outlining our preferred policy, a carbon tax, and the upper bound on costs to the Alberta economy and consumers.
“Risky Business: The Issue of Timing, Entry and Performance in the Asia-Pacific LNG Market” (with Michal C. Moore, Roman Karski, Dave Hackett, Leigh Noda, Mark Pilcher). 2014. The School of Public Policy Publications, 7 (July). (Peer-reviewed.)
We assess the costs associated with liquefied natural gas exports from the B.C. coast, global competition and demand in the Asia-Pacific region for Canadian LNG. Canada has potential as an exporter, but a limited time frame in which to sign contracts and develop facilities.
“Aboriginal-Canadians and Energy Literacy: A Survey of Opinions and Thoughts on Energy” (with Andre Turcotte and Michal C. Moore). 2014. The School of Public Policy Publications, 7 (February). (Peer-reviewed.)
We survey Aboriginal-Canadians on their knowledge of and opinions on energy. This survey reveals their knowledge and opinions about Canada’s energy system are similar to that of Canadians polled in previous surveys. Aboriginal-Canadians place less trust in business, industry groups and the government as reliable sources of information about energy issues.
"The "Green Jobs" Fantasy: Why the Economic and Environmental Reality Can Never Live Up to the Political Promise" (with Michal C. Moore). 2013. The School of Public Policy Publications, 6 (October). (Peer-reviewed.)
Summarize the green jobs literature and various definitions. We argue it is bad policy to use "green jobs" as a measure of policy success in environmental mitigation. Instead, policy-makers and politicians should focus on energy intensity and GHG intensity of industries.
"The Importance of Policy Neutrality for Lowering Greenhouse Gas Emissions" (with Trevor Tombe). 2013. The School of Public Policy Publications, 6 (March). (Peer-reviewed.)
We estimate the benefits of energy taxes relative to intensity standards in the Canadian economy. Intensity standards create distortions between firms that lower productivity; taxes avoid these distortions and are therefore superior. We investigate means to mitigate the negative consequences of intensity standards.
"Energy and Energy Literacy in Canada: A Survey of Business and Policy Leadership" (with Michal C. Moore, Andre Turcotte and Bernie Walp). 2013. The School of Public Policy Publications, 6 (February). (Peer-reviewed.)
Results from a Canada-wide survey of business and policy leaders on their attitudes about and knowledge of energy. The survey revealed thought leaders have knowledge levels very similar to the Canadian public, and there is a clear preference for more planning and systematically adapting to changing energy markets and environmental conditions through the development of some form of public policy energy strategies.
"Pacific Basin Heavy Oil Refining Capacity" (with Dave Hackett, Susan Grissom, Leigh Noda and Michal C. Moore). 2013. The School of Public Policy Publications, 6 (February). (Peer-reviewed.)
A survey of coking capacity (as a proxy for heavy oil refining capacity) and the market for heavy oil products in the Pacific Region.
"Energy Literacy in Canada" (with Andre Turcotte and Michal C. Moore). 2012. The School of Public Policy Publications, 5 (October). (Peer-reviewed.)
Results from a Canada-wide survey about energy literacy. The survey revealed Canadians have a good general knowledge of energy use and relative cost but lack detailed knowledge about sources of energy fuels, as well as sources and linkages with environmental impacts.
“Size, Role and Performance in the Oil and Gas Sector” (with Robert Mansell, Matt Krzepkowski and Michal C. Moore). 2012. The School of Public Policy Publications, 5 (July). (Peer-reviewed.)
We examine the relative performance of exploration and production firms in Alberta's oil and gas sector.
"Comment on ‘Reducing Canada’s landfill methane emissions: Proposed regulatory framework’." 2023. The School of Public Policy Publications (Briefing Paper), 16 (November).
I provide comments on the Government of Canada's proposed regulatory framework for landfill methane emissions, identifying several opportunities for improvement.
"Cities, Emissions and Mitigating Climate Change." 2022. Who Does What Series: The Municipal Role in Climate Policy, Institute for Municipal Finance and Governance, University of Toronto.
I discuss municipalities' emissions mitigation toolkit and implementation challenges in transportation, buildings, waste, and land-use and zoning.
"Measuring the Economic Impact of Alberta’s Crude Oil Curtailment Policy" (with Brandon Schaufele). 2021. Ivey Energy Policy and Management Centre Policy Brief.
We measure the short-run economic impact of Alberta’s 2012-2020 oil curtailment policy. The curtailment policy led to an estimated increase in producer operating income of $658 million per month, while consumers, predominantly refiners in the US Midwest, lost economic benefits equal to $763 million per month.
"An Overview of Global Liquefied Natural Gas Markets and Implications for Canada" (with Sarah Dobson, G. Kent Fellows, Dexter Lam and Paul Craig). 2018. The School of Public Policy Publications (Briefing Paper), 11 (July).
We review the current state of global liquefied natural gas (LNG) markets and the potential role for Canada. A second wave of new LNG capacity is likely needed by the mid-2020s, creating an opportunity for Canadian projects to move forward.
"Who Is Getting A Carbon-Tax Rebate?" (with Sarah Dobson). 2016. The School of Public Policy Publications (Communique), 9 (June).
With its 2016 budget, the Government of Alberta laid out the basic details of the carbon tax rebate. The rebate is constructed to increase based on household size, and will decrease with income after a pre-set cutoff. The government has stated six in 10 households will be eligible for a full rebate, with an additional six per cent receiving a partial rebate. We examines the income distribution of Albertans, to determine how the rebate and income cutoffs affect different types of Alberta families. Using easily available data from Statistics Canada, we shed light on the question of who will receive a carbon-tax rebate.
"Safety in Numbers: Evaluating Canadian Rail Safety Data" 2014. The School of Public Policy Publications (Communique), 7 (April).
I evaluate the state of public available data on rail accidents and incidents in Canada, and conclude the data is not adequate to properly assess rail safety, though one can determine average probabilities of occurrences.
"The Future of Energy Regulation and Policy Development: A Summary Paper" (with Shantel Jordison (nee Beach) and Andrew Wilkins). 2014. The School of Public Policy Publications (Summary Paper), 7 (August).
This paper summarizes the discussion and main themes, policy-related implications and observations arising from a symposium on the future of energy regulation in Canada, held in September 2013.
"Grasping at Straws: Comments on the Alberta Pipeline Safety Review." 2013. The School of Public Policy Publications (Communique), 6 (October).
I evaluate thirteen of seventeen recommendations from the "Alberta Pipeline Safety Review" commissioned by the Alberta Government. In general, the recommendations are superficial and of little practical use for improving pipeline safety in Alberta.