Monday, August 29, 2016

Will Federal Liberals Be Champions or Chumps on Carbon Pricing?

If you’re serious about wanting to take real, effective action on climate change, you’ve got to put a rapidly escalating price on carbon pollution.  That was the message speakers gave to Sudbury MP Paul Lefebvre earlier this month at his climate policy town hall.  With Catherine McKenna, the Federal Minister of Environment and Climate Change, expected to release a draft national climate change strategy later this fall, Members of Parliament across the nation have been engaged in public consultation all summer long (see: “Yellowknifers join Catherine McKenna to talk climate change,” CBC, July 12, 2016).  

If Minister McKenna wants her Liberal government to be taken seriously by Canadians clamouring for action on climate change, she’ll have to ignore some provincial leaders like Saskatchewan Premier Brad Wall, and put a national price on carbon pollution.  But pricing carbon is the easy part. Determining how the carbon fee will be collected, and how the revenues used are the more difficult decisions the Liberals will need to make.

“To work, the price on carbon has to be high enough to change behaviour,” says Laurentian University Professor of Economics Dr. David Robinson, who gave a presentation to MP Lefebvre about the need to send clear and strong signals to consumers (see: “Why Ontario’s Climate Plan Has Already Failed,” Dr. David Robinson, Economics for Northern Ontario, June 19, 2016). “That means the [carbon] price is high enough to convince most people to stop using gasoline cars and stop using natural gas for heating.”

Robinson and others have suggested that an initial carbon price somewhere between $30 and $50 per tonne is an appropriate place to start.  To be effective, the price will need to rise to $100 to $150 per tonne by 2030. Right now, British Columbia has the highest carbon fee in the nation, at $30 per tonne, where it’s been stalled since 2012.  Alberta and Ontario’s climate plans call for an initial price of less than $20 per tonne, starting in 2017.

An effective climate change plan will require our government to convince the public that it’s serious about following through on escalating the price.  That means talking about how much more everything is going to cost consumers – and convincing voters that rising prices on goods and services are beneficial.  That hardly sounds like a winning political strategy.

Certainly, Ontario’s Liberal government was reluctant to go down that road. After hearing from the public about the need to put a transparent price on carbon, Premier Wynne and provincial Minister of Environment and Climate Change Glen Murray decided to use the most opaque method available for pricing carbon – a cap and trade scheme that exempts many of Ontario’s biggest emitters for several years.  Ontario’s plan hardly provides the right signals that the government is serious about the need to change consumer habits (see: "A Failure of Ambition: Ontario's Climate Change Plan," Sudbury Steve May, July 10, 2016).

Ontario and Alberta are going about carbon pricing the wrong way, treating it as a cash cow to fill government coffers.  Yes, the money collected from carbon fees is earmarked for new green infrastructure projects, like improving our public transit systems – but these are the sorts of investments that our governments should be making anyway, in the interests of our collective future economic prosperity, with existing tax dollars.

If elected officials like Lefebvre and McKenna are serious about climate change and want to champion the rapidly rising price on carbon needed to reduce emissions and incent alternative energy development, there is only one way to do it: give the lion’s share of revenue collected back to taxpayers in the form of a dividend cheque or an income tax reduction. The extra money in people’s pockets will help offset rising prices, and smart consumers will save money by selecting low-carbon options.

Canadians are looking for real leadership from Prime Minister Justin Trudeau. Let’s hope the federal Liberals choose to be climate champions, rather than climate chumps like their provincial cousins here in Ontario.

(opinions expressed in this blogpost are my own and should not be considered consistent with the policies and/or positions of the Green Parties of Canada and Ontario)

Originally published in the Sudbury Star as, "Will feds be champions or chumps on carbon pricing?" in print and online as "Sudbury column: champions or chumps on carbon pricing?" August 27, 2016. 

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