1. Carbon Pricing Options Adriana Mugnatto-Hamu adriana@danforthgreens.ca 416-273-8247 Climate Change Conference 2010 2010 August 14

2. Carbon Pricing Options Forget everything you know.

3. Carbon Pricing Options 1.Cap or tax 2.Protect high-emitters or not 3.Targeted or economy-wide 4.Auctioned or distributed 5.Revenue-neutral or funding source 6.Distribution options 7.Border adjustment options 8.At source or emission point 9.Offsets 10. Appropriate levels 11. Hybrids 12. A global deal

4. 1. Cap or tax

5. Supply and demand curve

6. Cap or tax

7. Good times and bad

8. 2. Protect high emitters or not

9. Protect high emitters or not Grandparenting What it is Why it's done

10. Protect high emmitters or not Problems with grandparenting Emissions rise in evaluation period Perverse incentives Long time to implement Inaccurate market signal

11. Protect high emmitters or not Cap doesn't imply grandparenting Taxes can have similar problems

12. Protect high emmitters or not Sweden's carbon tax at introduction $100 per tonne of CO 2 Industrial rate: 25% High-energy industry exempt

13. Protect high emmitters or not Prevent off-shoring Purpose of carbon tax

14. 3. Targeted or economy-wide

15. Targeted or economy-wide Advantages of economy-wide mechanism Cheaper More elegant, less bureaucratic Appropriate related market signals

16. 4. Auctioned or distributed

17. Auctioned or distributed Advantages of auctioning Faster Industrial emmissions don't go up in the evaluation period Appropriate rewards and punishments Accurate market signals

18. 5. Revenue-neutral or funding source

19. Revenue-neutral or funding source Reasons to avoid spending the revenue Tax grab Creating industry lobbies No reason to

20. 6. Distribution options

21. Distribution options Income tax Dividend Quota

22. 7. Border adjustments

23. Border adjustments

24. Objectives Protecting Canadian market from imports Protecting market for Canadian exports

25. 8. At source or emmission point

26. 9. Offsets

27. 10. Appropriate levels

28. 11. Hybrids

29. 12. A global deal

30. Carbon Pricing Options 1.Cap or tax 2.Protect high-emitters or not 3.Targeted or economy-wide 4.Auctioned or distributed 5.Revenue-neutral or funding source 6.Distribution options 7.Border adjustment options 8.At source or emission point 9.Offsets 10. Appropriate levels 11. Hybrids 12. A global deal