Recommendation Two – Implement Financial Instruments for Carbon Reduction

Electricity investments in Canada will unavoidably entail significant costs to ratepayers and taxpayers in the coming decades. It is important that economic policies be well-coordinated to ensure costs are considered in the proper context and weighed against the benefits of the investments, in light of the alternatives and over the long-term. A North American carbon price that is implemented across the economy holds potential for very significant carbon reductions at lower cost than alternatives. Vision 2050 recommends implementing financial instruments that support carbon reduction at multiple levels: for households, for the electricity sector, for electricity in conjunction with transportation and for the economy as a whole.

Federal Government

  • Phase out operating subsidies
  • Continue providing R&D and early-adopter capital subsidies
  • Provide loan guarantees for beneficial interprovincial projects

Provincial Governments

  • Phase out operating subsidies
  • Continue providing R&D and early-adopter capital subsidies
  • Develop (or maintain) loading order policies for new transmission to give priority to low carbon generation resources

Regulators and System Operators

  • Support technical issues arising from implementation of carbon policies

Utilities

  • For generators, develop corporate plans for ongoing carbon reductions in fleets

 

Read more about Vision 2050’s recommendations in the full report. Download Vision 2050.