The following is an op-ed written by Robert Parsons, an instructor in the Asper MBA program at the U of M. It was originally published in the Winnipeg Free Press on June 21, 2017.
The nationwide price-on-carbon proposed by the federal Liberal government to reduce greenhouse gas (GHG) emissions is a topical subject, with lots of debate and discussion. Provinces will be required to have a minimum price equivalent to $10 per tonne starting in 2018, rising $10 per tonne per year, up to $50 per tonne by 2022. What this action will really mean to the public at large, however, remains unclear.
As an exercise with real-world implications, MBA students studying sustainability economics at the Asper School of Business examined two key associated questions. First, what level of carbon price is needed in order for Canada to fulfill its commitment to the Paris Agreement, which means reducing GHG emissions 30 per cent by 2030 relative to 2005 levels? And second, what level of carbon price would likely result in damage to our country’s economy, particularly since our largest trading partner, the United States, has opted out of the Paris Agreement?