The federal government should act decisively to modernize industrial carbon pricing

The Canadian Climate Institute advocates for the federal government to accelerate the modernization of industrial carbon pricing to address economic uncertainty and climate goals. The author proposes three primary actions: strengthening emissions performance standards to prevent credit gluts, harmonizing and linking provincial carbon markets to remove trade barriers, and providing long-term policy certainty through price trajectories beyond 2030 and carbon contracts for difference. The document argues that the current 2026 review timeline for provincial and territorial systems is too slow and should be accelerated to protect investment and competitiveness against global peers like the EU, UK, and China.

• Industrial carbon pricing is identified as Canada's most effective climate policy for reducing emissions and protecting competitiveness, including shielding exports from carbon tariffs in the UK and EU.
• To prevent credit gluts and plummeting prices in carbon markets, the federal government should more strictly enforce the 'benchmark' for provincial systems by predictably strengthening emissions performance standards.
• The federal government should facilitate the linkage of provincial carbon markets to increase liquidity and stability, which requires harmonizing critical design elements and emissions standards across provinces.
• Investment certainty for industry can be improved by establishing a carbon price trajectory beyond 2030 and implementing broadly-applied carbon contracts for difference.
• The existing schedule to review provincial and territorial carbon pricing systems in 2026 for 2027 updates is considered too slow and should be accelerated by the federal government.

APA

Canadian Climate Institute (2025). The federal government should act decisively to modernize industrial carbon pricing. https://climateinstitute.ca/federal-government-should-act-decisively-to-modernize-industrial-carbon-pricing/

Chicago

Canadian Climate Institute. The federal government should act decisively to modernize industrial carbon pricing. 2025. https://climateinstitute.ca/federal-government-should-act-decisively-to-modernize-industrial-carbon-pricing/.

Wikipedia

{{cite press release |author=Canadian Climate Institute |title=The federal government should act decisively to modernize industrial carbon pricing |date=8 May 2025 |url=https://climateinstitute.ca/federal-government-should-act-decisively-to-modernize-industrial-carbon-pricing/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{canadianclimateinstitute2025federal, author = {{Canadian Climate Institute}}, title = {{The federal government should act decisively to modernize industrial carbon pricing}}, publisher = {Canadian Climate Institute}, year = {2025}, month = may, url = {https://climateinstitute.ca/federal-government-should-act-decisively-to-modernize-industrial-carbon-pricing/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }