Carbon pricing systems have emerged in Canada at provincial and federal levels as a means to reduce CO2 emissions.However,cross-border electricity trade with the U.S.is extensive,and although Canada is currently a net exporter,policy changes could alter these trade dynamics.Since CO2 emissions are currently unregulated in most U.S.states,there is a concern that this incomplete regulatory coverage will lead to emissions leakage,as electric generation and emissions shift toward these unregulated locations.This analysis assesses potential power sector leakage and distributional implications across provinces from Canadian carbon pricing.
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