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PBO says Canada needs higher carbon prices to hit emissions targets

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Canada’s parliamentary budget watchdog says a higher price on carbon will be needed if Canada is to meet its Paris Agreement targets for greenhouse-gas emissions.

A Parliamentary Budget Office report ton Thursday says an extra price on carbon will be needed past 2023 to meet Canada’s targets, starting at $6 a tonne and rising to $52 by 2030.

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Combined with the current federal fuel charge, that would add up to $102 per tonne.

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Under current projections, Canada will reduce its emissions to 592 megatonnes of carbon dioxide by 2030, but the target is 513 megatonnes — a gap of 79 megatonnes.

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The PBO estimated an additional price on carbon after 2023 would cut emissions more and at a lower cost to the economy than the current fuel charge.

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The office notes that the estimates were made based on existing policies, and Environment and Climate Change Canada has said the effects of some new clean technologies have not yet been modelled.

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