Carbon pricing systems need to be good, not perfect, economist advises

When considering carbon pricing systems, governments in Atlantic Canada shouldn't fuss too much about the details to start with, says a McGill economics professor.

Regulations can be difficult to design, warns Chris Ragan

Different industries require different rules, making regulations complicated. (CBC)

When considering carbon pricing systems, governments in Atlantic Canada shouldn't fuss too much about the details to start with, says a McGill economics professor.

Chris Ragan was speaking at a panel discussion sponsored by the Atlantic Provinces Economic Council.

Chris Ragan spoke at a panel discussion sponsored by the Atlantic Provinces Economic Council. (CBC)

Ragan discussed several options for reducing carbon emissions in the region. He preferred carbon pricing to regulation.

"The key advantage of a carbon price is that it will reduce greenhouse gas emissions at a lower economic cost than regulatory approaches," said Ragan.

"The design of regulations is often done on a sector-by-sector basis and requires a great deal of information on the part of government about technologies within those sectors. Generally, that information is not easy to obtain for government, and sometimes not easy to obtain or express for the firm itself."

Ragan said policy makers should not worry about trying to launch a perfect system. He advised getting a system in place, and then modifying it as information about how well it is working comes together.