Can we have a healthy environment and a healthy economy? This is one of the most important questions of our time. The answer is “yes”, but only if the right policy and fiscal signals are in place. If we are to solve our escalating environmental problems we need to fix the economic system that is causing them – by making market prices start to tell the environmental truth.

The market economy is arguably the most powerful driver of humans’ impacts on the planet. Our economy currently fails to count most environmental costs and benefits, and thus sends flawed signals that contribute inexorably to an unsustainable way of life. The result is that, although neither companies nor consumers want to cause excessive environmental harm, they operate in a system that inevitably does just that -- through millions of anonymous, economically rational decisions each day that fail to reflect environmental costs.

By changing the economic rules to count environmental costs, markets can start to work for the environment not against it. This lecture will discuss various ways to do this, using market-based regulatory tools for putting a price on environmental harm. It will look at the evidence of their effectiveness and limitations, drawing on three decades of global experience, and explore the obstacles that often impede their adoption. Finally, it will examine the role that market-based tools could play in shifting Canada to a greener economy, and preparing us to prosper in the emerging low-carbon global marketplace.

Watch this lecture by Professor Stewart Elgie.