EcoFiscal Commission: The Relationship Between Carbon Pricing and Innovation

“Innovation” is buzzy these days, with lots of smart people thinking and writing about the role of policy in driving innovation to improve productivity and economic growth. And yes, innovation is great. It lets us use inputs—like capital, labour, and resources—more efficiently. It’s especially important in our efforts to reduce GHG emissions: innovation around new technologies and processes can help us reduce GHG emissions at lower costs.

In the midst of this growing conversation around innovation, let’s just take a few minutes to remind ourselves of a key innovation policy that’s right in front of us: carbon pricing.

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