The Governing Board of the Institute of New Economic Thinking (INET) together with the Centre for International Governance Innovation (CIGI) have jointly awarded Department of Economics Prof. Ross McKitrick a $107,250 grant for his 3-year project “State-Contingent Environmental Policy”.

The CIGI-INET Program on New Economic Theory, Practice and Governance serves to advance research on issues of critical importance to economics and international governance.

McKitrick proposes to analyze an approach to climate policy that involves tying the level of a tax on greenhouse gas emissions to observations of actual climatic changes. This has the potential to resolve some existing roadblocks in the development of climate policy. 

First, it creates incentive for more accurate climate change forecasting since the results would automatically be incorporated into policy making and private sector investment. Second, even though the direction of the policy is unpredictable, policy makers would know that by tying the stringency of the policy to the state of the climate, over time the policy will always move in the right direction. As a result, everyone would expect to get the policy they think is the right one, regardless of their view on the future path of global warming. 

Using a simulation model, McKitrick will study various aspects of this approach such as its impact on investment decisions, political coalitions, and the stability of the policy.

The professional objective of environmental economist Prof. Ross McKitrick of the Department of Economics is to get people to think about environmental policy with the tools of economic analysis. “Let’s think about environmental policies the way we think about other policies,” he urged, meaning applying academic rigour and metrics to come up with workable strategies.

McKitrick, who has a BA in economics from Queen's University and an MA and PhD from UBC, joined the University of Guelph in 1996. He is also Acting Associate Dean of Research in the College of Management and Economics until May 2012.

McKitrick’s work on climate change and environmental policy has involved wide-ranging academic debates, as well as frequent media interviews and several appearances before government hearings in Canada and the US.

In December 2011, McKitrick and a team of three climatologists testified before the Senate Standing Committee on Energy, Natural Resources and the Environment. The committee was doing a cross-country set of hearings on the development of energy resources and climate change policy in Canada and was interested in talking to people who have been critical of past policy decisions.

In his presentation McKitrick focused on two main points. First, that the Kyoto commitments didn’t work for Canada because the targets were unrealistic. The technology doesn’t yet exist to allow the energy sector to continue growing while reaching greenhouse gas targets set by former governments. Second, the advisory process needed to be revised. Why, he wonders, did so many agree to these targets when they wouldn’t work? Obviously, the decision making process is in need of reform.

McKitrick has published in journals such as Proceedings of the National Academy of Sciences, Energy Journal, the Journal of Environmental Economics and Management, Geophysical Research Letters, Journal of Geophysical Research and Canadian Journal of Economics. He has written op-eds for the National Post, the KW Record, and Newsweek. In 2002 he published the book Taken by Storm: The Troubled Science, Policy and Politics of Global Warming which won a Donner Prize for Best Book on Canadian Public Policy. In 2011 he published the textbook Economic Analysis of Environmental Policy.