The Morning After Optimal Greenhouse Gas Policies for Canada’s Kyoto Obligations and Beyond

In this issue... As the fortunes of the Kyoto Protocol ebb and flow, Canada should focus on a fundamental and enduring objective, which is to implement well-designed policies that lead to a cleaner energy system by fostering long-run technological change without wreaking short-run economic havoc. The Study in Brief In December 2002, after months of acrimonious national debate, the Canadian government ratified the Kyoto Protocol, an international agreement that commits Canada to reducing greenhouse gas emissions (GHG) to 6 percent below their 1990 level by 2010. Many of those opposed to ratification argued that the government committed Canada to an ambitious target without knowing the economic ramifications. Ottawa has since intensified its existing GHG policies while launching discussions with provincial governments and industry groups in an effort to develop additional programs. It is not yet possible to assess fully Canada's approach, but its emphasis on voluntary initiatives by businesses, consumers, and municipalities, supported by modest government subsidies, is similar to the dominant energy policie