Towards Assessing the Distributional Impacts of Meeting Kyoto Targets in Canada

This research paper introduces MARKAL-Equity, a model developed to assess the distributional impacts of meeting Kyoto Protocol emission targets on different income groups in Canada's residential sector. The study finds that low-income households are the most vulnerable to energy price increases, experiencing the greatest reductions in energy service demand and consumption, and lacking the financial capacity to switch to more efficient technologies compared to middle- and high-income groups.

• Low-income households in Canada spend a significantly higher proportion of their budget on energy than high-income households; specifically, the percentage of total expenditure spent on energy by low-income households is four times greater than that of high-income households.
• Low-income households are more sensitive to energy price changes than higher-income groups, particularly regarding space heating, where they are twice as responsive to price changes as high-income households.
• Under the Kyoto target scenario, all income groups see a reduction in demand for energy services, but the impact is uneven. In British Columbia's existing apartments, the low-income group experiences a demand loss of up to 16% by 2020, while the high-income group sees a smaller drop of up to 10%.
• The low-income group is less able to adapt to carbon constraints through technological changes. While they reduce their demand for energy services, they do not fundamentally change their fuel consumption patterns or replace technologies as readily as other income groups.
• Middle-income groups exhibit a distinct behavioral pattern by favoring wood stoves over electric space heating when facing emission constraints. Because wood stoves are less efficient, this choice leads to a slight increase in overall energy consumption for this group by 2020, despite a reduction in the demand for energy services.
• High-income groups are the most responsive in terms of switching to cleaner technologies to adapt to carbon constraints, clearly favoring electric space heating over natural gas and oil furnaces.
• In an emissions-constrained scenario, the residential sector's total energy consumption is projected to decrease by approximately 10% below 1995 levels by 2020, whereas it would have increased by 17% under a business-as-usual scenario.
• Solar space heating emerges as a technology under carbon constraints, but the model indicates it is primarily suited for higher-income groups due to high investment costs, though the simulation showed an unexpected emergence for the low-income group (5.1 PJ by 2020).
• The study suggests that transitional policies should specifically target low-income households to mitigate the burden of energy price increases. Recommended interventions include fiscal policies and assistance to help these households purchase more efficient space heating technologies, which account for about 68% of total residential energy consumption.

APA

Guertin, C., Loulou, R., & Kanudia, A. (2003). Towards Assessing the Distributional Impacts of Meeting Kyoto Targets in Canada. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/energy_markal_equity.pdf

Chicago

Guertin, Chantal, Richard Loulou, and Amit Kanudia. Towards Assessing the Distributional Impacts of Meeting Kyoto Targets in Canada. International Institute for Sustainable Development, 2003. https://www.iisd.org/system/files/publications/energy_markal_equity.pdf.

Wikipedia

{{cite report |last1=Guertin |first1=Chantal |last2=Loulou |first2=Richard |last3=Kanudia |first3=Amit |title=Towards Assessing the Distributional Impacts of Meeting Kyoto Targets in Canada |publisher=International Institute for Sustainable Development |date=2003 |url=https://www.iisd.org/system/files/publications/energy_markal_equity.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{guertin2003towards, author = {Guertin, Chantal and Loulou, Richard and Kanudia, Amit}, title = {{Towards Assessing the Distributional Impacts of Meeting Kyoto Targets in Canada}}, institution = {International Institute for Sustainable Development}, year = {2003}, url = {https://www.iisd.org/system/files/publications/energy_markal_equity.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }