C.D. Howe Institute cautions Canada on clean fuel standards

In Canada, Ottawa should clear up confusion about its plans for clean fuel standards, according to a new report by the C.D. Howe Institute.  In “Speed Bump Ahead: Ottawa Should Drive Slowly on Clean Fuel Standards” author Benjamin Dachis argues federal policymakers must examine the inherent limitations and potential economic costs of a clean fuel standard system.

Among the author’s recommendations are:

The federal  government should complete and release its own estimates of the economic cost of a CFS. If the economic cost of the proposed CFS plan is higher than a price on emissions, the federal government should have specific cost/benefit reasons to justify a CFS in addition to a price on emissions.

Ottawa should be mindful of policies that are effective when targeted at households, but burdensome for businesses, particularly emissions-intensive, trade-exposed businesses.

To favour a price on emissions over a CFS, since it is the most cost-effective way to reduce emissions. A CFS should only be considered should effective carbon pricing become politically unachievable.