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General Electric Canada CEO Elyse Allan, shown in a 2010 photo, says ‘carbon pricing will have a transformative impact on the rate at which we adopt new technology.’

JENNIFER ROBERTS/The Globe and Mail

GE Canada chief executive Elyse Allan has endorsed the Liberal government's national carbon-price plan, even as some critics argue it would put this country at a competitive disadvantage given president-elect Donald Trump's avowed skepticism on climate change.

General Electric Co. is a major supplier in the global energy market and is expanding its presence in the fossil-fuel sector by merging its oil-and-gas services business with Baker Hughes Inc., creating the world's second-largest oilfield-services operation.

But at a dinner in Toronto Thursday night, Ms. Allan said energy companies need to embrace innovation in order to reduce costs and lower their environmental footprint, while their major customers have to increase their efficiency – and that carbon pricing is a key tool to drive the necessary investment.

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"Carbon pricing is the most tangible and cost-effective policy tool available to achieve what Canadians are demanding – striking the right balance of being a responsible actor in the fight against climate change, and maintaining our legitimate role as an energy supplier to the world," she said.

"Carbon pricing will have a transformative impact on the rate at which we adopt new technology because it changes the fundamental economic equation around risk and reward."

Ms. Allan was named "energy person of the year" by the Energy Council of Canada, an advocacy group that draws its members from all facets of the industry, including oil and gas and its key suppliers. She also serves on Finance Minister Bill Morneau's Advisory Council of Economic Growth that has recommended the Liberal government aggressively pursue an innovation agenda.

Despite the severe slump in the oil and gas sector, Ms. Allan said Canada – once touted as an "energy superpower" – can still be a leader, but "it will come less from our production capacity and more from our innovative capacity."

In an interview after her speech, she said, despite the election of Mr. Trump, the federal government and provinces need to carry on with the pan-Canadian climate strategy, which includes provincial carbon-pricing plans and a federal minimum carbon tax that will be imposed on provinces that don't adopt their own.

Mr. Trump once characterized climate change as a hoax perpetrated by the Chinese, threatens to pull the United States out of the United Nations climate agreement reached last year in Paris and pledged to kill President Barack Obama's signature policy to cut emissions in the electricity sector.

Prime Minister Justin Trudeau said Thursday that he would not pull back from his climate policies despite fears that a carbon tax could hurt Canadian firms selling in the U.S. market or competing for investment with American rivals. However, Conservative Party interim leader Rona Ambrose said this week that pursuing a carbon tax now that Mr. Trump is the president-elect is "complete insanity."

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In a brief interview after accepting her award, Ms. Allan suggested Canada will have to move cautiously to protect its competitiveness, but that it should nonetheless proceed with carbon-pricing plans.

"We have a world out there that wants energy that is produced in a cleaner way, and we have an opportunity and great capability to supply that energy to the world," she said. "But the only way we can do it is if we show our absolute commitment and progress on making it cleaner."

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