Significantly reducing Canada's energy-related greenhouse gas emissions will likely require aggressive policies to encourage energy efficiency, low carbon secondary energy generation (from renewables, nuclear, or fossil with carbon capture), and/or fuel switching. There is much support amongst academics, as well as considerable momentum in the policy process, towards market-based approaches to implementing these policies, which involve directly or indirectly imposing a price on carbon emissions.

This primary objective of this report is to outline previous literature and theory relating to the distributional impacts of carbon policies, with a particular focus on the Canadian context. Throughout the paper, the focus is on intra- rather than inter-regional distribution of a carbon policy's impacts. That is, the paper does not examine how carbon policies might concentrate impacts on certain provinces within Canada, but instead outlines how such policies might impact households across demographic groups that are common to all provinces.