Study Reveals Canadian Energy Companies Are Anticipating Higher Carbon Costs

This article was last updated on April 16, 2022

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A study conducted on the energy companies of Canada recently revealed that a majority energy countries have begun anticipating higher carbon-related costs while calculating their investment, planning, and technology decisions. The Ottawa-based think-tank, Sustainable Prosperity, revealed in its study that companies are currently assuming a self-imposed, internal carbon price while making plans for future, which optimistically suggests that they are prepared for a time when carbon tax or cap-and-trade systems will be implemented more extensively throughout the country.

A senior director at Sustainable Prosperity, Alex Wood, highlighted that even with no apparent clarity of country’s energy strategy in the coming future, companies are actively assuming their own carbon price for making an appropriate long-term strategic planning and investment decisions. He stated that “at some future point, there will be a price on carbon,” so “what they are doing is essentially anticipating that and they’re factoring that into their decisions and so are addressing that risk.”

Carbon pricing is essentially a very generic term for enforcing a price on carbon through a carbon tax or a cap-and-trade system, which is ultimately intended to persuade wider reductions in carbon emissions and spurring innovation in low-emissions technology. The study claims that using a so-called shadow carbon price will aid companies in deciding whether or not to proceed with a certain project and help choose technologies that are best possible and practice to implement. Sustainable Prosperity, i.e. based at the University of Ottawa, comprehensively sampled 10 major companies for the study, which includes energy giants such as BP, Shell, Suncor, and Enbridge.