Association Webinars: Carbon Pricing Costs for Households and Revenue Recycling Options in Canada



Using household microdata, we quantify the costs of carbon pricing for households in each province and across the income distribution, and analyse revenue-recycling options based on existing provincial policies (where appropriate) as well as alternative revenue recycling options. Specifically, we quantify both direct and indirect costs for households, and using revenue-recycling policies, identify the net costs to households. To do this, we construct estimates of household energy use (electricity, natural gas, gasoline and home heating oil) by province and income quintile. Our methodological approach to including indirect costs allows us to investigate the effect of complementary policies - such as the federal output-based pricing system for large emitters - in mitigating costs to households. We then use Statistics Canada's Social Policy Simulation Database and Model (SPSD/M) to analyse revenue-recycling options: (1) an HST tax rate reduction; (2) an increased basic exemption for personal income taxes; (3) a GST rebate; and (4) a lump sum dividend. We find the carbon tax is generally regressive, the GST rebate and lump sum rebate are progressive, the HST tax rate reduction has mixed effects, and the income tax change is regressive. Importantly, the large-emitters system mitigates indirect costs that exacerbates the effect of carbon pricing on households.

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Dr. Jennifer Winter is an Associate Professor in the Department of Economics and Scientific Director of the Energy and Environmental Policy research division at The School of Public Policy, University of Calgary. Her research evaluates climate policies, and examines the consequences and trade-offs of government regulation and policy on energy development. She has testified to the Senate of Canada on emissions pricing policies, and has advised the Governments of Alberta and Canada in several capacities. Dr. Winter is actively engaged in increasing public understanding of energy and environmental policy issues. She serves on several boards and advisory committees, and is a member of Global Affairs Canada's Environmental Assessment Advisory Group.

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Event Date: October 7, 2020

Event Time: 10:00 - 11:00 AM Eastern Time

Topic: Carbon Pricing Costs for Households and Revenue Recycling Options in Canada

Price: FREE

Speaker:Dr. Jennifer Winter

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