Regulating Carbon Emissions in Canada

The document argues that GHG offsets are a critical component of effective climate policy, providing flexibility for regulated industrial emitters and expanding emission reductions to non-regulated sectors. Through a review of international and domestic systems and original CIMS modelling, the brief demonstrates that offsets can significantly lower the societal cost of carbon policies. It proposes two primary implementation paths: integrating offsets as a compliance mechanism within sector-by-sector regulations or establishing a separate, independent offset regime to cover sectors like agriculture and waste.

• Offset systems are widely integrated into operational GHG policies globally, with the EU ETS holding an estimated 80 per cent market share and the NSW GGAS holding 15 per cent.
• Offsets can substantially lower compliance costs for regulated emitters; for example, in the EU, regulated emitters saved at least $530 million annually over two years by using offsets instead of trading alone.
• Modelling indicates that for a target of 35.4 Mt of reductions, unlimited access to offsets could reduce overall compliance costs by 42 per cent, bringing the annual total from $886 million down to $513 million.
• Higher carbon costs increase the potential savings from offsets; in a scenario with an average carbon cost of $60, the addition of unlimited offsets reduced total costs by over $2 billion compared to an industry-only approach for 85 Mt of reductions.
• Offset systems allow for GHG reductions in sectors that are difficult to regulate through performance standards, such as agriculture, forestry, waste, and buildings.
• There is significant variability in offset volumes for the same project type across different systems; for instance, a manure management project's volume ranged from zero under the CDM to 466 tonnes under RGGI.
• Administrative costs for offset systems are typically high during the start-up phase due to protocol development, but operational costs are low; Alberta's system, which generates over 3.8 Mt of offsets annually, is operated by only three full-time staff.

APA

Sawyer, D., Stiebert, S., & Beugin, D. (2011). Regulating Carbon Emissions in Canada. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/ipog_offsets_canada.pdf

Chicago

Sawyer, Dave, Seton Stiebert, and Dale Beugin. Regulating Carbon Emissions in Canada. International Institute for Sustainable Development, 2011. https://www.iisd.org/system/files/publications/ipog_offsets_canada.pdf.

Wikipedia

{{cite report |last1=Sawyer |first1=Dave |last2=Stiebert |first2=Seton |last3=Beugin |first3=Dale |title=Regulating Carbon Emissions in Canada |publisher=International Institute for Sustainable Development |date=November 2011 |url=https://www.iisd.org/system/files/publications/ipog_offsets_canada.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sawyer2011regulating, author = {Sawyer, Dave and Stiebert, Seton and Beugin, Dale}, title = {{Regulating Carbon Emissions in Canada}}, institution = {International Institute for Sustainable Development}, year = {2011}, month = nov, url = {https://www.iisd.org/system/files/publications/ipog_offsets_canada.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }