The objective of climate policy should be to reduce climate change risks while minimizing the overall cost to society.
- Market based solutions should replace current mandates.
- GHG pricing should be determined by markets to ensure a uniform and predictable cost across all sectors, and provide a cost signal to consumers and investors. Funds generated through a revenue neutral policy should be used equitably to encourage economic growth.
- A GHG emissions fee on transport fuels would be the preferred market based policy option meeting our policy principles. The price component of the GHG emissions fee would be linked to the Emissions Trading System (ETS).
- Transport under ETS cap could be another market based mechanism for reducing transport emissions.
- Near term cost effective emissions reduction is likely easier found in other sectors of the economy. However, a market based policy will allow fuel and technology options in transport to compete.