Divergent Approaches: Greenhouse gas mitigation in Canada and Australia

This policy brief by the International Institute for Sustainable Development (IISD) compares the greenhouse gas (GHG) mitigation strategies of Canada and Australia as of November 2012. It contrasts Australia's unified national carbon pricing approach with Canada's decentralized, sector-by-sector regulatory framework, analyzing the political risks, subnational dynamics, and estimated regulatory costs associated with each model.

• Canada and Australia have adopted divergent national strategies for GHG mitigation: Australia implemented a national carbon pricing mechanism, while Canada opted for sector-by-sector performance regulations. Australia's approach involves a carbon tax from 2012 to 2015, transitioning to a cap-and-trade system from 2015 onwards, covering the 500 largest emitters over 25,000 TPA.
• 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 contrast, Canada uses 'equivalency agreements' that allow provinces to retain policy control, which the authors suggest could lead to 'historical policy fragmentation' and higher regulatory burdens for emitters.
• Political instability has been a common theme in both nations, with carbon pricing becoming a liability for political leaders. The document cites the resignations or removals of Stephane Dion in Canada, and Kevin Rudd and Malcolm Turnbull in Australia, as examples of the political risks associated with climate policy instrument choice.
• Preliminary analysis suggests that regulatory costs for emitters are likely higher in Canada than in Australia. For example, IISD research indicated marginal costs of roughly CAD$50 per tonne for draft electricity sector regulations in Canada, whereas Australia's initial carbon tax was set at AUD$23 per tonne.
• The document argues that once carbon pricing systems are implemented, they become difficult to repeal due to the momentum of revenue streams and the resulting compensation payments to industry and the public.
• Canada's 2020 national target is 17% below 2005 levels (607 Mt), with expected reductions of approximately 130 Mt, leaving it 113 Mt short of the target. Australia's target is 5% below 2000 levels by 2020 (530 Mt), with expected reductions of approximately 160 Mt, which is projected to meet the target.

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} }