Right across Canada and around the world, jurisdictions are moving away from coal-fired electricity generation in favour of cleaner options, and this critical debate has finally come to the mainstream in Alberta.
The Alberta NDP has reignited this much-needed discussion with its platform commitment in the current election to “phase out coal-fired electricity generation to reduce smog and greenhouse gas emissions and expand cleaner, greener sources, including wind and solar”.
Canada’s new Ecofiscal Commission, chaired by McGill University macroeconomics professor Chris Ragan, has a mandate to propose reforms to the fiscal system that reduce pollution and environmental damage while also increasing economic efficiency.
The core idea is to move towards a polluter-pay approach, whereby environmental costs are reflected in the market prices of economic activities. By taxing polluting activities, eco-fiscal policies incentivize actions that reduce harm to the environment and generate new revenues that could be used to reduce other taxes.