Craig Johnston is a Principal Economist of the Climate Analysis Team in the Financial Stability Department. In this role he conducts analysis and research on the macroeconomic and financial stability implications of climate change. Part of this work includes incorporating climate-related risks into the Bank of Canada’s financial system risk assessment framework. In addition, Craig represents the Bank of Canada on various domestic and international engagements in this area, including the Network of Central Banks and Supervisors for Greening the Financial System.

Before joining the Bank of Canada, Craig held an academic position at the University of Wisconsin-Madison and was previously a lecturer in economics at the University of Victoria. Craig holds a Ph.D. in Economics from the University of Victoria.

Staff discussion papers

Transition Scenarios for Analyzing Climate-Related Financial Risk

Climate transition scenarios clarify climate-related risks to our economy and financial system. This paper summarizes key results of Canada-relevant scenarios developed in a pilot project on climate risk by the Bank of Canada and the Office of the Superintendent of Financial Institutions.

Scenario Analysis and the Economic and Financial Risks from Climate Change

Staff Discussion Paper 2020-3 Erik Ens, Craig Johnston
This paper adapts climate-economy models that have been applied in other contexts for use in climate-related scenario analysis. We consider illustrative scenarios for the global economy that could generate economic and financial risks. Our results suggest there are significant economic risks from climate change and the move to a low-carbon economy.

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Staff working papers

An Investigation into the Effects of Border Carbon Adjustments on the Canadian Economy

We examine the economic implications of border carbon adjustments (BCAs) for Canada. We find that, BCAs, in the form of import tariffs, reduce Canada’s carbon leakage and improve its competitiveness when Canada is part of a broad coalition of BCA-implementing countries. Welfare also improves when tariff revenues are transferred to households.
Content Type(s): Staff research, Staff working papers Topic(s): Climate change, International topics, Trade integration JEL Code(s): C, C6, C68, F, F1, H, H2, Q, Q3, Q37, Q5

Do Protectionist Trade Policies Integrate Domestic Markets? Evidence from the Canada-U.S. Softwood Lumber Dispute

Staff Working Paper 2020-10 Jinggang Guo, Craig Johnston
We consider the effects of protectionist trade policies on international and domestic market integration, using evidence from the long-standing softwood lumber trade dispute between Canada and the United States.

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Technical reports

Assessing Climate-Related Financial Risk: Guide to Implementation of Methods

A pilot project on climate transition scenarios by the Bank of Canada and the Office of the Superintendent of Financial Institutions assessed climate-related credit and market risks. This report describes the project’s methodologies and provides guidance on implementing them.

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Journal publications

Refereed journals

  • “Do protectionist trade policies integrate domestic markets? Evidence from the Canada-U.S. softwood lumber dispute” (with J Guo) Forest Policy and Economics 130(2021): 102525
  • “Knock on Wood: Managing Forests for Carbon in the Presence of Natural Disturbance Risk” (with A Siebel-Mckenna and GC van Kooten) Spatial Economic Analysis 15(2020): 299-310.
  • “The Global Warming Potential of CO2 Emissions from Bioenergy with Carbon Capture and Storage.” (with P Withey, and J Guo) Renewable and Sustainable Energy Reviews, 115 (2019), 109408.
  • “Global Mitigation Potential of Carbon Stored in Harvested Wood Products,” (with V Radeloff) Proceedings of the National Academy of Sciences. 16 (2019): 14526-14531.
  • “From Source to Sink: Past Changes and Model Projections in Carbon Sequestration in the Global Forest Sector,” (with J Buongiorno, P Nepal, and J Prestemon) Journal of Forest Economics 34(2019): 47-72.
  • “Carbon Uptake and Forest Management under Uncertainty: Why Natural Disturbance Matters,” (with GC van Kooten and F Mokhtarzadeh) Journal of Forest Economics 34(2019): 159-185.
  • “Shared Socioeconomic Pathway Narrative Development for Global Forest Sector,” (with A Daigneault, A Korosuo, J Baker, N Forsell, J Prestemon, and B Abt) Journal of Forest Economics 34(2019): 7-45.
  • “Effects of Parameter and Data Errors on Predictions in a Model of the Global Forest Sector,” (with J Buongiorno, J) Forest Policy and Economics 93(2018): 10-17.
  • “Potential Effects of United States Protectionism and Trade Wars on the Global Forest Sector,” (with J Buongiorno, J) Forest Science 64(2018): 121-128.
  • “Managing Forests for Carbon and Timber: A Markov Decision Model of Uneven-Aged Forest Management with Risk,” (with P Withey) Ecological Economics 138(2017): 31-39.
  • “What’s Next in the U.S.-Canada Softwood Lumber Dispute? An Economic Analysis of Restrictive Trade Policy Measures,” (with R Parajuli) Forest Policy and Economics 85(2017): 135-146.
  • “Risk Aversion and Risk Seeking in Multi-Criteria Forest Management: A Markov Decision Process Approach,” (with J Buongiorno and M Zhou) Canadian Journal of Forest Research 47(2017): 800-807.
  • “Assessing Economic Impacts of Internet Adoption through Reduced Pulp and Paper Demand,” (with T Ochuodho and P Withey) Canadian Journal of Forest Research 47(2017): 1381-1391.
  • “Impact of Brexit on the Forest Products Industry of the United Kingdom and the Rest of the World,” (with J Buongiorno). Forestry: An International Journal of Forest Research 90(2017): 47-57.
  • “An Assessment of Gains and Losses from International Trade in the Forest Sector,” (with J Buongiorno and S Zhu) Forest Policy and Economics 80(2017): 209-217.
  • “Impact of inefficient quota allocation under the Canada-US softwood lumber dispute: A calibrated mixed complementarity approach,” (with GC van Kooten.) Forest Policy and Economics 74(2015): 71-80.
  • “Global Paper Market Forecasts to 2030 under Future Internet Demand Scenarios,” Journal of Forest Economics 25(2016): 14-28.
  • “Global Trade Impacts of Increasing Europe’s Bioenergy Demand,” (with GC van Kooten) Journal of Forest Economics 23(2016): 27-44.
  • “The Economics of Forest Carbon Offsets,” (with GC van Kooten) Annual Review of Resource Economics 8(2016): 227-246.
  • “Back to the Past: Burning Wood to Save the Globe,” (with GC van Kooten) Ecological Economics 120(2015): 185-193.
  • “Economics of Co-Firing Coal and Biomass: An Application to Western Canada,” (with GC van Kooten) Energy Economics 48(2015): 7-17.
  • “Economic Consequences of Increased Bioenergy Demand,” (with GC van Kooten) Forestry Chronicle 90(2014): 636-642.
  • “Global Impacts of Russian Log Export Restrictions and the Canada–U.S. Lumber Dispute: Modeling Trade in Logs and Lumber,” (with GC van Kooten) Forest Policy and Economics 39(2014): 54-66.
  • “Wind versus Nuclear Options for Generating Electricity in a Carbon Constrained World: Strategizing in an Energy Rich Economy,” (with GC van Kooten and L Wong) American Journal of Agricultural Economics 95(2013): 505-511.