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Global Warming – Economics/Policy

In 2007 I was asked to talk about emission pricing at a conference organized by Queen’s University. This powerpoint deck gives a quick overview and introduced the T3 concept.
  • McKitrick, Ross R. (2007) Emissions Pricing: Some Implementation Issues Invited presentation to Queen’s University Institute of Energy and Environmental Policy conference “The Future of Coal in Ontario.” Toronto, May 10 2007.

In 2007 the Ottawa Economics Association invited me to address the question of Canada’s options on global warming policy, on the eve of the new Conservative government’s announcement. In this paper I explain why pricing instruments are preferred to quantity targets, and what the literature says about the approximate marginal damages due to CO2 emissions.

During the debate over whether Canada should ratify Kyoto, Randy Wigle and I published (through the CD Howe Institute) a critical review of the federal government’s work on implementation costs. A little later I was asked to discuss the government’s plans as they were reflected (or not) in the 2003 budget, for a conference at Queen’s University.
  • *McKitrick, Ross R. and Randall M. Wigle (October 2002). The Kyoto Protocol: Canada's Risky Rush to Judgment. The C.D. Howe Institute Commentary.
  • McKitrick, Ross R. (April 2003) "Budget '03 and the Kyoto Process." In The 2003 Federal Budget: Conflicting Tensions edited by Charles Beach and Thomas Wilson, John Deutsch Institute, Queen's University.

In 2007 I gave a talk at Wilfrid Laurier University's Viessmann European Research Centre, comparing US and European approaches to climate change. My point was that while they have outlined different objectives, the constraints are so tight that the outcomes are pretty much the same.

This little paper sets out an argument that if we are unable to tell, ex post, whether a given weather event was due to global warming or not, we are unlikely ever to be able to compute the marginal damages due to carbon dioxide emissions. As such, we are better off planning to compensate victims ex post rather than trying to mitigate damages ex ante. If I was smarter and less distracted I would develop it into a more formal revision to the Integrated Assessment Model approach, which assumes away all the uncertainty over attribution.

In 2001 I wrote this paper for the Competitive Enterprise Institute (they paid me a thousand bucks) explaining why cap and trade and similar methods for controlling CO2 emissions are bad ideas. I will have a new report for CEI this year going into more detail in light of the proposals before the US Congress.

This paper came out of my PhD thesis work, using a computable general equilibrium model to show that revenue-neutral carbon taxes can achieve some emission reductions at no net macroeconomic cost. It wouldn’t get us to the Kyoto target, but I do believe that a low carbon tax of up to about $20 per tonne, if fully recycled into payroll and income tax cuts, would not harm the economy. Of course it wouldn’t reduce emissions much either.