Saturday, December 30, 2017

To Meet Paris Commitments, Canada Needs a National Energy Strategy

What’s becoming increasingly clear is that a lack of federal leadership on climate change is undermining Canada’s Paris commitment to reduce greenhouse gas emissions 30% from 2005 levels by 2030 (see: “The Emission Reduction Plans Of All Major Ontario Political Parties Fall Short,” Mark Winfield, the Toronto Star, December 19, 2017).  The so-called ‘Pan-Canadian Framework on Clean Growth and Climate Change’, which still hasn’t been greenlighted by Manitoba or Saskatchewan more than a year after it was unveiled by the feds (see: “Manitoba could join climate change agreement to access millions in funding, but won't agree to carbon tax rate,” CBC News, December 19, 2017), will establish a $50 per tonne price on carbon pollution by 2022 – a price far less than what experts tell us is needed to compel consumers to switch to low-carbon goods and services.

Missing entirely from the framework is any mention of border tax adjustment, necessary to protect Canada’s industries from competition based in jurisdictions that haven’t priced carbon.  If Canada was serious about getting in the clean tech investment game, we’ve got to start sending the right market signals to investors.

Instead, what we’ve seen in this past year is a federal government approving the Kinder Morgan Trans-Mountain bitumen pipeline, and the Premier of Alberta giving speeches to the well-heeled business community about expanding production in the tar sands (see: “Rachel Notley urges political foes, allies to support Alberta pipeline projects,” CBC News, November 22, 2017).  Meanwhile, Canada continues to lose ground in the booming global clean tech market.

A new report from the Organization of Economic Co-operation and Development (OECD) outlines the magnitude of the mess we’re in (see: “OECD Environmental Performance Reviews, Canada, 2017,” OECD, December 19, 2017).  The OECD report indicates that while emissions have fallen from 2005 levels in most provinces – and Canada as a whole, thanks largely to Ontario’s decision last decade to phase out coal-fired electrical generation – emissions are continuing to rise in Alberta to the point that this one province is now responsible for 40% of our nation’s overall emissions (see: “Canada must reduce emissions from oilsands to meet climate goals: OECD report,” CBC News, December 19, 2017).  The growth of the Alberta tar sands threaten to undermine all of the greenhouse gas reductions achieved by the rest of Canada.

Alberta’s “Climate Leadership Plan”, which has been touted by oil patch leaders and more than a few misguided environmentalists, is a recipe for our failure to meet our Paris targets (see: “Opinion: Alberta's climate plan stands in the way of Canada's,” Gordon Laxer, the Edmonton Journal, December 3, 2015). While there are many good measures included in Alberta’s plan, including a commitment to phase out coal by 2030, the plan nevertheless contemplates offsetting those gains by allowing oil and gas emissions to grow by over 40%.

That’s something the OECD says simply can’t happen.  According to the report, “Without a drastic decrease in the emissions intensity of the oilsands industry, the projected increase in oil production may seriously risk the achievement of Canada’s mitigation targets.”

But since Canada lacks a national energy strategy or a carbon budget, it’s not at all clear which provinces are going to be on the hook to do more than their fair share to reduce emissions, so that Alberta can continue to grow the tar sands (see: “National energy strategy an ongoing discussion, not single report: Carr,” Mia Rabson, the National Post, October 13, 2017).  And without a serious price on carbon pollution externalities, we can’t rely on the invisible hand of the market to help make necessary course corrections.

What’s needed is real leadership at the federal level.  That means border adjustment taxes to protect Canadian businesses from a hefty national price on carbon pollution, starting in the range of between $80 to $120 per tonne and rising.  It means putting a mechanism in place to return pollution revenue to citizens so that families are insulated from rising prices.  And it means finally getting serious about developing a national energy strategy tied to our climate change commitments and caps total annual emissions through provincial carbon budgets, leaving high-carbon assets stranded safely in the ground as unburnable carbon.

Subsidies for fossil fuels must be ended, along with public investments in fossil fuel infrastructure.  Those are the kinds of market signals that investors are looking for from our federal government.  That’s what climate change leadership has to look like, going forward.

(opinions expressed in this blog are my own and should not be interpreted as being consistent with the views and/or policies of the Green Parties of Ontario and Canada)

Originally published as "May: To meet commitments, we need energy strategy," in the Sudbury Star, December 23, 2017 (print version) and December 24, 2017 (online) - without hyperlinks.

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