Canadian economists urge action on climate change

Canada's economists have written An Open Letter to the Leaders of Canada’s Federal Political Parties regarding climate change policy.

Here is a summary of their letter:

What Needs to be Done

1. Canada needs to act on climate change now.
2. Any substantive action will involve economic costs.
3. These economic impacts cannot be an excuse for inaction.
4. Pricing carbon is the best approach from an economic perspective.
   
   1. Pricing allows each business and family to choose the response that is best and most efficient for them.
   2. Pricing induces innovation.
   3. Carbon is almost certainly under-priced right now.
5. Regulation tends to be the most expensive way to meet a given climate change goal.
6. A carbon tax has the advantage of providing certainty in the price of carbon.
7. A cap and trade system provides certainty on the quantity of carbon emitted, but not on the price of carbon and can be a highly complex policy to implement.
8. Policies that impose costs on producers (big or small) affect consumers.
9. Price mechanisms can be regressive and our policy should address this.
10. A pricing mechanism can allow other taxes to be reduced and provide an opportunity to improve the tax system.