With all the talk about carbon taxes lately, Sustainable Prosperity (SP) set out to examine the status of environmental taxes in Canada, define them and measure their value.

If you want to get someone’s attention and change their behaviour, do you appeal to their heart and sense of greater good, or do you hit them in the pocketbook and offer dollars to sway their decision-making? In some ways, this is the policy-maker’s dilemma – given a public policy objective, what is the best policy tool to achieve it?

Responding to climate change will require some significant changes in where investments flow in our economy. If we think about the role that investment plays in addressing climate change, we can compare between two investment actions: investing money to promote a low carbon economy, or divesting away from the fossil fuels that cause climate change in the first place.

Let’s start with divestment.

Ecosystem valuation is still an academic undertaking or one that is limited to raising awareness around the value of protecting or restoring nature.

Earlier this year, SP published an Issue Summary that described how a carbon price could help bridge the gap between Canada’s GHG-reducing ambitions and its performance to meet those ambitions.

The numbers are in for Quebec and California’s first joint auction of GHG allowances (for convenience’ sake, I will use “allowance” and “permit” interchangeably in this post). The auction held on November 25th marked the last step in the linking of their cap-and-trade systems.

Addressing climate change is going to require a lot of investment. The International Energy Agency estimates that the transition to a global low carbon economy will require upwards of US$53-trillion in cumulative investment in energy supply and energy efficiency by 2035. The National Round Table on the Environment and the Economy estimated in 2012 that an “annual investment on the order of $13 to $17 billion” was required in Canada to achieve our climate change objectives.

“Do you have a baby boom in Copenhagen Mr. Gehl?” asked a concerned Mrs. Lan – an employee at the Danish embassy in Hanoi, Vietnam.

“No at all Mrs. Lan, Denmark’s population is actually shrinking.” Jan Gehl’s was puzzled and surprised by this question.

Have you spent any time lately reading the financial statements of a business or other organization? If you have, you probably noticed that they contain a lot of information – there are balance sheets, with information on assets and liabilities; there are income sheets, with information on income, profits and losses; and there are statements of cash flows, with information on operations, investments and financing. These financial statements tell you a lot about what matters to companies – they reflect business decisions, and they inform future decisions.