Alberta is about to take the lead in reducing greenhouse gases says the non-partisan group Canada’s Ecofiscal Commission. In a recent report, they compared the four provinces that have a carbon price and concluded that Alberta will have the most stringent policy by 2020.
By stringent, they mean the most effective overall plan in reducing greenhouse gases in which carbon pricing is just one of five methods. Commission chair, Professor Chris Ragan, explains:
“When comparing provincial carbon pricing policies, it is useful to use metrics that take into account the various design details, such as coverage and trade that differ from policy to policy. That way we are comparing policies on a more level playing field.”
Of the five ways, carbon pricing is still the most important. For that reason, Alberta and British Columbia both have more stringent carbon pricing than Ontario and Quebec who use the cap-and-trade approach. Supporters of this approach argue that pricing alone through taxes is a misleading; that cap-and-trade will work.
The advantage of carbon pricing is that it is simple –it’s a direct tax applied at the gas pump. The cap-and-trade system uses market forces to determine the price of carbon by first setting a cap on the amount of carbon that any industry can emit and then allowing industries to buy and sell unused allowances. If one industry gets under the cap, they can sell the remainder to those who go over.
Watch out, you provinces without carbon pricing. The federal government is holding a big stick: if you don’t implement carbon pricing, the feds will. Federal Environment Minister Catherine McKenna said all governments will have to increase the stringency of their climate policies, including carbon pricing, in order for Canada to meet its international commitments.
Provinces aren’t used to federal leadership. In the past, the feds have been notoriously negligent in reducing greenhouse gases. As a result, Canada has become a international slacker in the fight to confront the global threat of climate change. Under the Chrétien Liberals, promises were made but never kept. Under the Harper Conservatives, no promises were made and provinces did as they pleased.
Several premiers have voiced opposition to any federal price on carbon – including Saskatchewan’s Brad Wall, Quebec’s Philippe Couillard and Nova Scotia’s Stephen McNeil.
Meanwhile, the clock is ticking, reports the Globe and Mail (July 27, 2016) and the commission’s report is timely. “Its report informs talks between Ottawa, the provinces and the territories as they attempt to reach a pan-Canadian climate strategy this fall. Officials are working through the summer on a series of policy issues, including efforts to forge a minimum national carbon price.”
While B.C. can take some pride in being the first province to implement carbon pricing, that lead is in jeopardy. With a B.C. election in less than a year, Premier Clark will have to walk the line between satisfying the business community that opposes higher carbon taxes and the progressive community who wants B.C. to keep the lead in the carbon-reduction.