2024 Independent Assessment of Carbon Pricing Systems

The 2024 Independent Assessment finds that Canadian carbon pricing systems are effective, delivering between a third and a half of all projected emissions reductions by 2030. While systems have harmonized in coverage and stringency since 2020, some large-emitter trading systems (LETS) in Alberta, British Columbia, and Saskatchewan are at risk of losing effectiveness due to credit oversupply and adverse policy interactions. The report also notes that while LETS generally mitigate competitiveness risks for large emitters, small and medium-sized enterprises (SMEs) face varied exposure, with some sectors like water and truck transportation showing high vulnerability.

• Carbon pricing is projected to be a primary driver of climate goals, accounting for between one-third and one-half of all emissions reductions attributable to climate policies in 2030 under the legislated policies scenario.
• National carbon pricing coverage is estimated at 77% of emissions (excluding land use, land-use change, and forestry), with jurisdictional coverage ranging from 41% to 84%.
• The marginal cost incentive is generally aligned with the 2024 federal price of $80 per tonne, though it is lower in Quebec's cap-and-trade system and potentially lower in Alberta due to offset availability.
• Large-emitter trading systems (LETS) are significantly more impactful than fuel charges, with a maximum potential impact roughly 4.5 times greater.
• There is a risk that LETS in Alberta, British Columbia, and Saskatchewan could see their marginal cost incentives erode by 2030 due to an oversupply of credits caused by policy interactions and generous benchmarks.
• In Alberta, the marginal cost for large emitters is projected to collapse to $46 per tonne by 2030 in the 'announced, less stringent' scenario due to the interaction with the proposed federal oil and gas emissions cap and surplus credits from the electricity sector.
• Average costs for large emitters remain low, with national averages in six of seven major sectors below $10 per tonne in 2024, which helps protect competitiveness but may discourage long-term structural changes.
• Competitiveness risks for large emitters are generally mitigated; no large-emitting sector is projected to face a profit impact where significant financial hardship is likely under all legislated policies.
• Small and medium-sized enterprises (SMEs) exhibit diverse carbon exposure; water, truck, and rail transportation are identified as high-risk sectors based on profit and sales tests.
• The Canada Carbon Rebate for Small Business provides limited relief for the most emissions-intensive SMEs, as the flat per-employee rebate does not scale with higher carbon costs.
• A lack of public data on credit markets and facility-specific performance standards creates opacity that threatens the overall effectiveness of carbon pricing systems.

APA

Ross, L.-F., Sawyer, D., Harrison, S., & Stiebert, S. (2025). 2024 Independent Assessment of Carbon Pricing Systems. Canadian Climate Institute. https://climateinstitute.ca/wp-content/uploads/2025/02/2024-Independent-expert-assessment-carbon-pricing.pdf

Chicago

Ross, Linden-Fraser,, Dave Sawyer, Sam Harrison, and Seton Stiebert. 2024 Independent Assessment of Carbon Pricing Systems. Canadian Climate Institute, 2025. https://climateinstitute.ca/wp-content/uploads/2025/02/2024-Independent-expert-assessment-carbon-pricing.pdf.

Wikipedia

{{cite report |last1=Ross |first1=Linden-Fraser, |last2=Sawyer |first2=Dave |last3=Harrison |first3=Sam |last4=Stiebert |first4=Seton |title=2024 Independent Assessment of Carbon Pricing Systems |publisher=Canadian Climate Institute |date=March 2025 |url=https://climateinstitute.ca/wp-content/uploads/2025/02/2024-Independent-expert-assessment-carbon-pricing.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ross20252024, author = {Ross, Linden-Fraser, and Sawyer, Dave and Harrison, Sam and Stiebert, Seton}, title = {{2024 Independent Assessment of Carbon Pricing Systems}}, institution = {Canadian Climate Institute}, year = {2025}, month = mar, url = {https://climateinstitute.ca/wp-content/uploads/2025/02/2024-Independent-expert-assessment-carbon-pricing.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }