Alex Paterson

Think Tank Round-Up Volume 2: March 6, 2013

March 6, 2013

It has been a busy week for us at Canada 2020, with our Equality of Opportunity panel and our Skilled Trades in the Energy Sector conference. If you missed our events, follow the links to watch exclusive video, flip through photos, and download presentations. And while you’re at it, make sure you’re signed up for our next event in The Canada We Want in 2020 Speaker Series: Asia’s cities, Canada’s opportunity?

But just as we’ve been very active so too have other organizations in our network. Here’s another round-up of the policy thinking and writing from Canadian and international think tanks from the past two weeks.

Carbon and the environment have taken center stage. President Obama has been more aggressive in his statements regarding climate change and the plans he has to tackle it, which seems to have created the momentum for discussion.

On March 4th, The Brookings Institution published a short piece (The Climate Change Rebound) on how shifting public opinion might be the root cause of this renewed policy interested in climate change: an increasing number of Americans appear to believe that extreme weather events are caused by climate change and that something should be done about it.

Another piece (The Many Benefits of a Carbon Tax) by the Brookings Institution’s Adele Morris argues that a modest carbon tax would create economic growth, reduce budget deficits, reduce redundant and inefficient regulation, reduce unnecessary subsidies and reduce the costs associated with climate change. The author defines `modest’ as a tax of $16 per ton of CO2 that would rise annually by 4% over inflation until 2050.

This figure is in line with the lower range that many companies seem to be using already, at least in Canada, according to Sustainable Prosperity, an Ottawa based environmental think tank. SP’s report on how Canadian companies in the energy sector have been using shadow carbon pricing (Shadow Carbon Pricing in the Canadian Energy Sector) make an interesting read. Although the federal government has not put in place a carbon price, some companies have decided to go ahead and do it themselves to improve their risk management, innovation and market access. This suggests a readiness that would facilitate the adoption of carbon pricing were it to take place. However, less optimistically, Sustainable Prosperity found that even the upper range of shadow carbon prices being employed are significantly below the carbon price that is estimated to be necessary in 2020 to shift Canada to a lower GHG emissions pathway (National Roundtable on the Environment and the Economy).

Also last week, the Centre for American Progress produced a report on the potential of offshore wind energy development. It concluded that there was much scope for advancement of an energy source that is not only cleaner but would reduce the dependence of the country on external sources of energy. However, this is based on the analysis at the macro level while most studies at the project level are less optimistic about the potential impact of offshore wind energy. You can read about it here.

Closer to home, The International Institute for Sustainable Development in Manitoba produced an evaluation of federal government action on carbon in 2012 in its latest report Regulating Carbon Emissions in Canada: Canadian Carbon Policy Year in Review and Emerging Trends. The Winnipeg research institute argues that although the federal government was more active on this file in 2012, it should be wary of increased fragmentation between provinces, which increases compliance costs and potentially undermines Canada’s ability to reach its Copenhagen greenhouse gas emission targets. However, IISD is optimistic due to early signs of policy coordination between provinces and the federal government, which bodes well for effective future for long term policy. IISD puts forward four policy recommendations: (i) learn from a fragmented policy landscape; (ii) build on current carbon bridges toward a unified, harmonized policy; (iii) enable compliance flexibility; and (iv) establish clear rules in the meantime.


Join the conversation on Carbon pricing in Canada and attend our event How to Sell Carbon Pricing to Canadians on April 27th, 2013.

The other prominent and persistent public policy debate is around income inequality. The Brown Centre Chalkboard of the Brookings Institution explored in some detail the President’s pre-K plan (Obama’s Preschool Plan). The plan is not to subsidize children of the middle class but rather to help disadvantaged families provide equal opportunities to their children, through taxpayer-funded (shared costs with states) preschools. The report highlights that for the US to continue to be competitive in the global economy it must reduce the gap between advantaged and at-risk children.

The Economic Policy Institute also looks at income inequality but through the lens of the minimum wage. The debate on minimum wage in the US has been reignited by President Obama’s State of the Union address calling for an increase of the federal minimum wage from $7.25 to $9. The debate about the aggregate effect of raising minimum wages (on employment and economic well-being) rages on. The report Declining Value of the Federal Minimum Wage is a Major Factor Driving Inequality argues that real wages in the US have not kept up to the productivity gains and the average American has experienced a “lost decade” of wage gains in the 2000s. This, the EPI argues, should change if the American economy is to regain its strength and recover.

That’s it for another two weeks of policy debate. Remember to sign up for our mailing list to keep up to date with all of the latest news and events from Canada 2020.

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