Report Questions Canada's 'Politicization' of Climate Change Policy Options

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Fragmented climate policies costlier: report

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OTTAWA - The Conservative government has politicized its policy options at a time when harmonized federal and provincial carbon policies are needed to cut emissions as cheaply as possible, says a new report.

An increasingly fragmented national approach to carbon policy could result in higher costs, according to the International Institute for Sustainable Development.

The Conservative decision to go with complex, sector-by-sector regulation of emissions while provinces experiment with market-driven policies such as cap-and-trade systems, carbon offsets and carbon taxes makes for a confusing patchwork, said the year-in-review report, released Tuesday.

"The rules of this new game are not so clear, leaving uncertainty, confusion and the risk of unintended consequences in the face of increasing regulatory complexity," say the report's three authors.

"In 2013 we can expect a sense of rising unease with the emerging system."

The report does not take the Conservative government to task, and in fact praises Ottawa for "more policy action in 2012 by the federal government than in any previous year." It also states there were early signs of policy co-ordination between jurisdictions.

But the study goes on to make it clear that the anti-carbon tax rhetoric from Stephen Harper's Conservatives won't help harmonize policies.

"The federal government's 'job-killing carbon tax' refrain in September caught many by surprise, casting a shadow of uncertainty over ongoing consultations," said the report from the Canadian-based, international think tank.

"The government's position left no doubt that regulation is the word."

David Sawyer, one of the report's co-authors and the institute's vice-president, said in an interview that regulations are usually viewed by economists as less efficient and cost-effective than market mechanisms for reducing carbon.

"The question is, can the regulations that are emerging have flexibility?" said Sawyer. "To what extent can we design the regulations to lead to low-cost outcomes?"

The Harper government has pounded away for months at a proposed NDP cap-and-trade policy that Conservatives claim amounts to a "job-killing tax on everything. …