Industrial carbon pricing the top driver of emissions reductions, new analysis shows

Between now and 2030, industrial carbon pricing will do more than any other policy to cut Canada’s emissions

OTTAWA—Climate policies are reducing Canada’s greenhouse gas emissions, and industrial carbon pricing is the single biggest driver, according to new analysis by the Canadian Climate Institute. 

The paper, Which Canadian climate policies will have the biggest impact by 2030?, features the first rigorous analysis attributing emissions reductions to collective and individual climate policies. It examines, first, how policies implemented to date have affected Canada’s emissions trajectory and, second, how major climate policies are expected to impact emissions between 2025 and 2030. 

By 2030, industrial carbon pricing (which includes various types of large-emitter trading systems) is projected to contribute between 23 and 39 per cent (or 53 to 90 Mt) of avoided emissions from all policies implemented to date. And between now and 2030, these large-emitter trading systems—such as Ontario’s emissions performance standard or Alberta’s TIER system—will do more than any other policy to cut emissions, delivering between 20 and 48 per cent of emissions reductions expected from Canada’s Emissions Reductions Plan moving forward. 

Based on modelling by Navius Research, the analysis found that, by 2030, all existing climate policies in Canada combined will prevent 226 megatonnes of carbon pollution—roughly equal to the total annual emissions of Ontario and Quebec. In other words, without the various climate policies provincial, territorial, and federal governments have legislated to date, Canada’s emissions would be more than 40 per cent higher in 2030 than they are currently on track to be. 

Accounting for and addressing counterproductive policy interactions could drive additional emissions reductions. In particular, strengthening large-emitter trading systems can deliver deeper emissions reductions while protecting industrial competitiveness.


“This analysis clearly demonstrates that climate policy is delivering results—with industrial carbon pricing leading the pack. Robust large emitter trading systems are fundamental to any credible climate policy package in Canada.”

Rick Smith, President, Canadian Climate Institute 

“Any constructive assessment of Canada’s options in tackling climate change should be grounded in credible numbers—and for the first time, it’s clear how individual policies are contributing to Canada’s climate goals. While there’s still work ahead to reach Canada’s 2030 climate target, any backtracking or failure to implement measures that are working today will set back Canada’s progress unless they’re replaced by robust, evidence-based alternatives.” 

Anna Kanduth, Director, 440 Megatonnes 

“Large emitter trading systems are already the single biggest driver of emissions reductions between now and 2030. Strengthening these systems will reduce emissions even more while protecting investment and jobs in industries competing in a global market moving to net zero emissions.” 

—Dale Beugin, Executive Vice President, Canadian Climate Institute 



Catharine Tunnacliffe
Communications Director
Canadian Climate Institute
(416) 527-1777