The Harper government should move ahead with “made-in-Canada” climate change regulations – including a price on carbon dioxide emissions – rather than wait for the United States to act, a government-appointed advisory panel recommends.

In a report Tuesday, the national Roundtable on the Environment and Economy argues Canada would enhance its economic competitiveness if it acted now so as to avoid more costly actions later.

“Harmonization, where possible and when feasible, makes sense for Canada,” the roundtable’s chief executive David McLaughlin said.

“But in the face of persistent U.S. uncertainty as to its own climate policy future, Canada will need to look to its own options, in the right way, at the right time.”

The study concludes that it will be more costly for Canada to reduce emissions than the United States, in part because the American industrial infrastructure and coal-fired power plants are older and will need replacing sooner.

As a result, matching U.S. goals for emission reduction will require a higher carbon price in Canada. Alternatively, if Canada matched a U.S. price, it would fall short to cutting emissions by 17 per cent below 2005 levels by 2020 – a target to which both countries have committed.

Prime Minister Stephen Harper has rejected Canada’s more aggressive commitments under the Kyoto protocol and has instead sought to harmonize Canada’s ambition and policies with those of Barack Obama’s administration in the United States.

However, the President faces a major challenge from Republicans and conservative Democrats who oppose climate legislation and are seeking to block the Environmental Protection Agency from imposing emissions regulations on major industrial polluters.

Ottawa has matched U.S. regulations aimed at cutting emissions from cars, trucks and ships, and has signaled its intention to introduce regulations that will force utilities to eventually replace coal-fired power plants with cleaner ones. But it has refused to move on industry, including the heavily emitting oil sands.

The National Roundtable urges Ottawa to adopt a national cap-and-trade system that would set a limit on carbon emissions but allow industry to purchase credits from companies that can reduce them more efficiently. It also argues companies should be able to purchase credits from foreign sources, which would keep the cost of carbon credits lower than they would be in a purely domestic market.

It would set an initial limit of $30 per tonne of carbon dioxide emission, and ensure the cost never exceeds an eventual U.S. price by more than $30. The roundtable also urges Ottawa to recycle revenue raised into a technology fund to finance investment in emission-reduction technologies.

The panel said its proposed policies would shave one-tenth of a percentage point off economic growth. Without a climate policy, emissions will be 10 per cent above 2005 by 2020, rather than 17 per cent below.

“No single climate policy is risk free; realistically, each entails some cost,” the report says. “But if Canada desires to achieve its stated environmental goals of GHG emission reductions within a certain period, we will need to consider additional steps now, independent of U.S. actions and policy uncertainty.”

The National Roundtable on the Environment and Economy is an independent federal agency that advises the government on sustainable development. Its board members and chief executive officer were appointed by the Conservative government.