Upstream Emissions Trading: the Great Leap Forward for Ecological Tax Reform?

Two trends -- increased political interest in ecological tax reform and the increasing urgency of reducing greenhouse gas emissions -- could see ecological tax reform being the next major trend in environmental law in Canada. The auctioning of allowances to emit greenhouse gases or sell fossil fuels for combustion could be used to encourage lowest cost greenhouse gas emissions. It is likely the most environmentally effective, economically efficient and equitable way of implementing an emissions trading system. Combined with ecological tax reform -- i.e. using revenue from auction allowances to reduce taxes -- it could help move Canada toward a healthier, cleaner economy with fuller employment.