Divergent Approaches: Greenhouse gas mitigation in Canada and Australia

The document analyzes the divergent paths taken by Canada and Australia to mitigate greenhouse gas emissions. While Australia implemented a unified national carbon pricing system (transitioning from a carbon tax to cap-and-trade), Canada adopted a decentralized, sector-by-sector regulatory approach utilizing provincial equivalency agreements. The authors argue that Canada's fragmented system is likely to result in higher regulatory costs for emitters compared to Australia's streamlined national approach, although the actual emission reductions of both schemes remain uncertain.

• Canada and Australia have adopted fundamentally different national strategies for GHG mitigation: Australia utilized a national carbon pricing mechanism, whereas Canada opted for sector-by-sector performance regulations.
• The two countries differ in how federal governments interact with subnational policies. In Australia, the federal government provided a unified approach that led states to vacate the policy space. In Canada, the federal government uses 'equivalency' to allow provinces to retain control over policy architecture, which may lead to historical policy fragmentation.
• Regulatory costs for emitters are expected to be higher in Canada than in Australia due to the complexity of managing multiple sector-specific standards across different regulators.
• Specific cost estimates for Canadian sectors indicate high marginal costs: electricity sector regulations showed marginal costs of roughly CAD$50 per tonne, and oil and gas sector regulations for a 20 per cent intensity improvement ranged between CAD$43 and $56 per tonne.
• Australia's carbon pricing system began with a fixed price of AUD$23 per tonne from 2012 to 2015, with plans to transition to a flexible cap-and-trade system linked to the European Union Emissions Trading System (EU ETS).
• Political instability and the 'job-killing' narrative surrounding carbon taxes led to the downfall of high-profile politicians in both nations, including Stephane Dion in Canada and Kevin Rudd and Malcolm Turnbull in Australia.
• Once carbon pricing systems are implemented, they become difficult to repeal because of the established flow of revenues and compensation payments to industry and the public.

APA

Gass, P., & Sawyer, D. (2012). Divergent Approaches: Greenhouse gas mitigation in Canada and Australia. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/divergent_approaches.pdf

Chicago

Gass, Philip, and Dave Sawyer. Divergent Approaches: Greenhouse gas mitigation in Canada and Australia. International Institute for Sustainable Development, 2012. https://www.iisd.org/system/files/publications/divergent_approaches.pdf.

Wikipedia

{{cite report |last1=Gass |first1=Philip |last2=Sawyer |first2=Dave |title=Divergent Approaches: Greenhouse gas mitigation in Canada and Australia |publisher=International Institute for Sustainable Development |date=November 2012 |url=https://www.iisd.org/system/files/publications/divergent_approaches.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{gass2012divergent, author = {Gass, Philip and Sawyer, Dave}, title = {{Divergent Approaches: Greenhouse gas mitigation in Canada and Australia}}, institution = {International Institute for Sustainable Development}, year = {2012}, month = nov, url = {https://www.iisd.org/system/files/publications/divergent_approaches.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }