Thomas, William

Project title: Carbon Pricing Effects on Canadian Manufacturing Sectors and Final Product Importation Rates

Department: Economics

Faculty supervisor: Dr. Emma Hutchinson

"Carbon pricing (CP) is implemented on carbon emitting inputs such as gasoline in order to reduce emissions of CO2. This method of CP, however, fails to account for emissions resulting from production of goods that are imported from outside of the CP system. This can have detrimental effects on carbon pricing locations such as hindered production as well as carbon leakage (where firms relocate to outside of CP zones). Current research has theorized the negative repercussions of CP and even empirically identified real world cases; however, no empirical paper has analyzed all of the provinces across Canada together. I propose an empirical analysis of the effects of carbon pricing on manufacturing and final-product importation rates in the provinces across Canada. I would use panel data and difference-indifference regressions to remove bias and identify any causal relationships present with the implementation or removal of carbon pricing systems. This method would work well with Canada as there is national data on provincial manufacturing/importation as well as each province has a diverse history with regards to carbon pricing (such as: steady implementation, intermittent implementation, and no implementation). This diversity in carbon pricing will aid in removing bias and isolating any repercussive effects of the carbon pricing systems."