By Aaron Wherry - Wednesday, May 1, 2013 - 0 Comments
In an essay for Policy Options, Thomas Mulcair lays out his vision for resource development.
Within a framework of sustainable development — including a cap-and-trade system and thorough environmental assessments — New Democrats would prioritize our own energy security and with it the creation of high-paying, value-added jobs, refining and upgrading our own natural resources right here in Canada — just as other resource-rich developed nations like Norway already have.
With unused refining capacity in eastern Canada already available, increasing west-east capacity is, in fact, a win-win-win — better prices for producers (and higher royalties for provinces), more jobs here at home and greater energy security for all Canadians. Shouldn’t that be Canada’s top priority for natural resource development?
As we move to seize these opportunities at home, we must also foster the international trade and foreign investment relationships that will ensure we have the capacity to meet them. In the past two years alone, state-owned Chinese companies like PetroChina and CNOOC have invested more than $25 billion in the Canadian oil and gas sector. That trend is expected only to grow.
New Democrats support breaking down trade barriers, lowering tariffs and reducing protectionism. We believe that government has a role to play in creating the predictability and clarity that potential investors count on. But we also believe that our government must stand first and foremost for Canadian interests, rather than ideological purity.
Mr. Mulcair actually mentions cap-and-trade twice, in the first reference he describes the NDP proposal as “a comprehensive upstream cap-and-trade system.”
A couple weeks ago, I noted the problems with the European carbon market and some questions about the future of carbon-pricing in Canada. I then sent those questions around to a few people. Here is a response from PJ Partington and Clare Demerse with the Pembina Institute. Continue…
By Aaron Wherry - Tuesday, April 30, 2013 at 1:47 PM - 0 Comments
It’s very true that oil companies are not charitable organizations–which is why it’s not a good idea to make policy based on the assumption that they will passively absorb the costs of new regulations. It’s not at all obvious why firms would pass along the costs of a carbon price but not the (larger) costs of regulation.
Meanwhile, Ryan Leef is being criticized for the information he has distributed on the polar bear population. And Natural Resources Minister Joe Oliver received a rebuke from the scientist—now a Green candidate in British Columbia—he had previously cited. (Andrew Weaver is also a fan of taxing carbon.)
In other news, the NDP motion that initiated last Thursday’s debate was defeated last night and various New Democrats took to Twitter to criticize Elizabeth May for voting against. Ms. May responded with a lengthy explanation of her problems with the motion.
I would have loved to have seen a unified group of MPs from all the Opposition Parties rise on principle and (hoping against hope) some of the Conservatives who understand the need for climate action might have voted with us to give the Parliamentary call for reductions in GHG a chance of passing. But since tonight’s motion forgot to call for climate action, maybe we could take a run at a properly worded motion another day.
There does exist, it should be noted, a multi-partisan climate change caucus. And Mr. Leef is one Conservative who attended its most recent meeting.
By Stephen Gordon - Tuesday, April 30, 2013 at 10:32 AM - 0 Comments
This is from last Thursday’s Hansard:
Mr. Dean Del Mastro (Parliamentary Secretary to the Prime Minister and to the Minister of Intergovernmental Affairs, CPC): Mr. Speaker, picking up a bit on where the hon. Minister of Canadian Heritage left off, it is not just that the Canadian public rejected Liberal proposals over the last three campaigns, of course mindful of the Liberals’ woeful record with respect to climate change, but it is something to hear the Liberals continue to retread through ideas that have been rejected and present them once again as though they are new and should be taken up even though Canadians have said something quite different.
Does the member understand that there is a world price for oil, there is a world price for gasoline and that oil companies like the idea of a carbon tax principally because they will get the world price for oil or gasoline regardless, but the carbon tax will then be paid by Canadian consumers and it will completely exempt them? However, if they are actually regulated, they will have to absorb these costs and only receive the world price for oil and gasoline. Oil companies are not charitable organizations. They are an important industry for Canada, but they are not charitable.
By Aaron Wherry - Friday, April 26, 2013 at 2:53 PM - 0 Comments
Canuck Politics has been busy over the last 12 hours, uploading a variety of political ads from the last decade. Here is one from 2008.
Luckily, the Conservatives formed government after the 2008 election and won a majority in the 2011 election and now we need not fear that the Canadian government would do anything so crazy as impose tariffs on trading partners like China, Brazil, India and Russia.
As for carbon tariffs, Joyce Murray says they’re being imposed on Canada.
By Aaron Wherry - Thursday, April 18, 2013 at 12:05 PM - 0 Comments
Backloading failed because even in very green Europe, economic concerns seemed to trump environmental ones. European Parliamentary members worried that any action that would cause the price of carbon to rise would add to European industry’s already high energy costs. Europe, unlike the U.S., doesn’t have relatively cheap, relatively clean natural gas to help cushion that blow. At the same time, European nations like Germany are rethinking some of their renewable energy policies, concerned by the rising cost of electricity. It looks like a textbook example of what Roger Pielke Jr. calls the “iron law of climate policy“: when climate policy starts to hurt economically, even the greenest states start to back away.
It’s possible that backloading may get a second chance before the European Parliament, and even without a viable carbon market, Europe is still the global leader in climate action. Nor is the ETS the only game in town. California launched its own cap-and-trade system this year—though that’s come under political pressure as well—and Australia has introduced a price on carbon. China may do so as well. But the hope that we may be able to reduce carbon emissions the same way we cut pollutants like sulfur dioxide and nitrous oxide—through a well-run cap-and-trade —seems to be dimming, a victim of its own complexity and a sluggish global economy. That might leave the door open for other policies, including a straight carbon tax, more support for renewables or increases R&D funding for carbon-free power. We could use all three, but carbon markets may be finished. If carbon trading can’t make it in Europe, it can’t make it anywhere.
China is apparently undeterred.
The developments in Europe might be interpreted in one of two ways: either it is evidence that carbon markets won’t work or it puts the onus on those who propose carbon markets to explain how their proposal accounts for the shortcomings of the European system.
There is, it seems to me, another looming issue, another one which the NDP will have to account for. Let’s say that, by 2015, British Columbia has expanded its carbon tax (as the BC NDP currently proposes), Alberta has increased its carbon tax (as the Progressive Conservative government there seems to be considering), Quebec has a cap-and-trade system linked with California (as both jurisdictions are moving towards) and, say, one other province has implemented a carbon-pricing mechanism of some kind (Manitoba? Ontario? Newfoundland?). How then does the NDP reconcile its proposal for a national cap-and-trade system with all of that? What do the Liberals—Mr. Trudeau having offered vague support for a price on carbon—propose? Do we end up with a number of different approaches—carbon taxes, carbon markets and regulatory regimes—functioning within the country? Does that make sense? Is it feasible or political possible to build a national carbon-pricing mechanism, or at least a national approach that takes into account provincial jurisdiction?
Jean Charest thinks the country is headed towards a carbon tax. Somewhere Stephane Dion is either nodding grimly or screaming.
Update 4:19pm. Further to this post, I sent along a question to the NDP side: How would an NDP government reconcile a national cap-and-trade system with provincial jurisdictions that already have carbon-pricing mechanisms? The response from Thomas Mulcair’s office is as follows.
We will deal with this as we’ll deal with every other issues of shared responsibility: by cooperation.
I’ve asked a few smart people if they have any thoughts on the way forward and hope to post those in the next while.
By Aaron Wherry - Wednesday, April 17, 2013 at 11:40 AM - 0 Comments
The most immediate concern is, then, that the current approach will fall significantly short of yielding the reductions required to meet Canada’s stated target (17% below 2005 levels by 2020). Indeed, there is presently no basis for a serious claim that we will meet our Copenhagen commitment. Current Environment Canada projections are for a 113 megatonnes shortfall in reduction by 2020 (that is assuming that all the measures and regulations that governments across Canada are putting in place have the desired effect). That would mean that we will have succeeded in reducing emissions compared to 2005 levels by only 20 megatonnes or less than 3%.15 No government could be proud of such ‘achievement’.
Unfortunately, constructive dialogue on how we might reduce the gap has ceased, and name-calling has taken its place. Carbon pricing of any type is characterized as a ‘tax on everything’. This serves neither the goals of the government nor the well-being of Canadians, particularly since it is far from clear that the targets to which we are committed are adequate for the long term.
By Aaron Wherry - Monday, April 15, 2013 at 9:28 AM - 0 Comments
The Canadian Press notes the recent visits of Alberta Premier Alison Redford and Environment Minister Peter Kent to the Washington, DC.
In separate appearances and meetings, Kent and Redford both stressed that Canada was taking climate change very seriously and that strong measures were in the works to reduce greenhouse gas emissions in the oil and gas sector … Gone was the federal talk about any form of carbon pricing being akin to a carbon tax that would raise the price of everything. Indeed, Kent took pains to stress that while Ottawa likes its regulatory approach to emissions, he was open to provinces setting up their own plans — as long as such arrangements lead to actual reductions in emissions.
So the Harper government might believe that putting a price on carbon is a terrible idea, but it respects provincial jurisdiction enough to refrain from criticizing provincial governments that decide to implement cap-and-trade systems or carbon taxes. That’s an entirely admirable and mature approach to federalism.
Peter Kent explains…
“There hasn’t been a great deal of subtlety in talking about carbon pricing…
… There are those carbon taxes where the revenues go into general revenue and do not guarantee the reduction of a single ton of greenhouse gases. (But) Alberta has a tech fund wherein their revenues are focused only, and in isolation, on technology to achieve further ghg reductions than the emitters in that province are already able to achieve.”
Less than a year ago, Mr. Kent ventured that “carbon pricing in any form is a carbon tax.” There would not seem to have been any subtlety left at that point, at least so far as the Conservatives were concerned. A few months later, Conservative MP John Williamson explained that “cap and trade or cap and tax, a price on carbon is a tax on carbon.”
Over the subsequent weeks and months, the Conservatives have repeatedly criticized the NDP’s plan to implement a cap-and-trade system: saying, for instance, that ”a carbon tax like the NDP is proposing would critically hurt Canadian families” and that “the economy would be lost and family would be lost” and that “this costly new tax that will kill jobs, stall the economy and ruin winter” and so on.
So what is Mr. Kent saying now? Is he saying that carbon taxes aren’t necessarily bad? Is he saying that Alberta’s carbon tax is somehow okay or at least somehow less ruinous?
Let’s go back to CP’s report of last Wednesday—when CP paraphrased Mr. Kent as saying the federal government is not against carbon pricing. Here is what Mr. Kent was quoted as saying in that piece.
“I’m saying that carbon taxes where the taxes go into general revenues…
The general “revenue” argument is not new, but I’m still not sure how that matters if, in Mr. Kent’s opinion, any price on carbon is equivalent to a carbon tax and if, as it seems the government wishes to convey, a carbon tax is an inherently bad idea. Unless, again, we’re allowing now that a price on carbon isn’t necessarily a terrible thing…
…, as the NDP’s would, for social engineering, not for the reduction of (greenhouse gases)…
This particular matter of revenue is perhaps an interesting and worthwhile nuance to explore: that any revenue derived from cap-and-trade or a carbon tax should not be used for social programs. If that’s what Mr. Kent means by “social engineering.” This point has been raised in the past: Stephane Dion’s Green Shift used some of the revenue to reduce poverty and Brian Topp raised it as a point of concern during the NDP leadership race.
In 2011, the NDP committed almost all of the revenues from cap-and-trade to what it termed “green initiatives.” And when I spoke with Thomas Mulcair in December, I asked him about this point. He said then that “there has to be an equivalent amount that goes into environmental purposes” and “it has to be concentrated in those provinces, those areas where that money is being generated.”
Is there a possible difference between “environmental purposes” and “the reduction of (greenhouse gases)”? Maybe. But is that suddenly all that remains of this apparent disagreement over the NDP’s cap-and-trade platform?
… that’s something we would consider to be … unworthy,” he said.
So is there a kind of carbon tax that Mr. Kent would consider worthy? Is Alberta’s carbon tax worthy?
The global debate about how to reduce carbon has not really taken a hard look at how effective carbon taxes are in actually cutting emissions, he added.
Fair enough. There are certainly questions to be asked. Which approach would be most effective in reducing greenhouse gas emissions? Cap-and-trade, a carbon tax or regulations. Which would be the most cost-effective and efficient option? Here is Stephen Gordon’s take. Here is Jack Mintz’s take. If Mr. Kent is willing to engage it, there is certainly an interesting debate to be had.
I asked Mr. Kent’s office two questions after reading CP’s story on Wednesday. Here are those questions, with the responses provided.
Does Mr. Kent not categorically oppose all forms of carbon pricing?
Our government has been clear: we will not implement a carbon tax.
And what is Mr. Kent’s opinion of the kind of carbon tax used in Alberta?
With regards to Alberta, the Minister was very clear in the press conference and I refer you to the following statement from the presser on Wednesday: “Well, we’ve been working in terms of our federal sector by sector regulatory process with the oil and gas sector since late 2011. We continue to work with – with the sector, with stakeholders, with the provinces – Alberta and other provinces that are blessed with oil and gas. But I think it would be premature today to talk about where we are.”
These responses didn’t seem to sufficiently explain Mr. Kent’s position on carbon pricing, so I tried again.
The minister is quoted today as saying: “There hasn’t been a great deal of subtlety in talking about carbon pricing There are those carbon taxes where the revenues go into general revenue and do not guarantee the reduction of a single ton of greenhouse gases. (But) Alberta has a tech fund wherein their revenues are focused only, and in isolation, on technology to achieve further ghg reductions than the emitters in that province are already able to achieve.” Is he saying that carbon taxes are not necessarily bad policy?
To that I was told to refer to the previous responses.
By Aaron Wherry - Thursday, April 11, 2013 at 12:38 PM - 0 Comments
The Harper government’s promise of a North American cap-and-trade market is now nearly sort of realized as California Governor Jerry Brown has formally approved linking California’s carbon market with Quebec.
Meanwhile, Erica Alini has a thorough guide to Alberta’s carbon levy.
By Erica Alini - Wednesday, April 10, 2013 at 5:12 PM - 0 Comments
So Alberta hasn’t really proposed to increase its carbon price to $40, as reported last week. Speaking with Luiza Savage in Washington, D.C. yesterday, Premier Alison Redford said the much debated 40-40 plan isn’t something “we’ve in any way landed on or proposed.” (Read the full interview here.)
You still need to know about Alberta and its system for pricing carbon. Why? Because it might be the blueprint for federal emission regulations for the oil and gas industry that are expected to — forgive the pun — come down the pipe later this year. Alberta and Ottawa are collaborating “intensely” on the upcoming federal rules for the oil and gas industry, Redford told Maclean’s.
But is Alberta’s setup the model the nation should follow? Here’s what you need to know to start making up your mind:
1. Provincial vs. federal regulations, a bit of history.
In 2006 Ottawa let it be known via the Canada Gazette that it intended to regulate greenhouse gas emissions. The approach the government had in mind was the following: target the largest polluters, those with emissions over 100,000 tonnes per year, and use “intensity targets.” That would limit the amount of GHGs per unit of output rather than putting a cap on aggregate emissions. However, the government added, such targets should be “ambitious enough to lead to absolute reductions in emissions and thus support the establishment of a fixed cap on emissions.” (A big hat-tip to University of Alberta professor Andrew Leach here, who wrote this paper.)
Deeds, however, did not follow those words speedily, and a few provinces have since pressed ahead with their own rules. Alberta was the first to put a price on carbon in 2007; a few months later, Quebec imposed a carbon levy on energy producers and a cap-and-trade system in 2011. B.C. followed suit in 2008 with a carbon tax on gasoline and other fuels.
By Luiza Ch. Savage - Tuesday, April 9, 2013 at 4:33 PM - 0 Comments
Alberta premier Alison Redford is in Washington, DC today to speak about her province’s energy resources and environmental policies as the Obama administration continues to review the proposed Keystone XL pipeline.
She is having meetings on Capitol Hill and gave a speech to the Brookings Institution, in which she made the case that if the cross-border pipeline is rejected, the winner will be Venezuela. Said Redford:
“The opponents of Keystone are, in effect, tilting the playing field in favor of Venezuela, which would be the biggest beneficiary in the absence of Keystone. If it is not Canadian oil sands in those US refineries, it will be Venezuelan heavy oil. Yet Venezuela’s oil has the same carbon footprint, while Venezuela has little of the environmental policies and commitment that we do in Alberta. And importing oil from Venezuela does far less for the US economy and US jobs than Canadian imports.”
I asked her about reports that her government is planning to raise Alberta’s $15 per tonne carbon price to $40 per tonne as a means to getting American approval for the pipeline project — a price that environmental critics say would be still too low. Below are highlights of our conversation:
Q: Washington, DC is very polarized on the issue of oil sands and Keystone XL. So who is left for you to persuade here on your trip?
A: It’s funny. This is my fourth trip down here in the last 18 months. I was thinking about it on my way down yesterday that in some ways the conversation hasn’t changed. But this happens to be a point in time when people are very focused on this issue. So from our perspective, it’s not about a roster of people we are trying to convince. It’s to make sure that we are present in the discussion. So that as the dialogue changes and more people get engaged, we have more of an opportunity to talk about the issues related to the project.
This is an issue about Keystone but we never come to say, ‘We are proponents of Keystone and please approve the project.’ We come to say, ‘We know that in your considerations with respect to this project you are asking questions about Canada and Alberta – what does environmental sustainability look like? How do you balance environmental sustainability and economic development? What are the priorities for Canada and the U.S.?’ For me, part of that dialogue is to have thoughtful conversations with people so that they understand that we are thinking about the same issues, that our values as Canadians are not different than the values of people who are involved in these issues in the United States.
Q: What is the question you get asked most often?
A: I think that the approach that we’ve taken, which gets a very good response, is we don’t ever have people sit down and interrogate us. But what we say is we’re here to talk about what our environmental record has been in Canada. We have a commitment to ensuring that we are reducing greenhouse gas emissions; that we understand that climate change of course is real; and that there are different approaches to deal with this. You have to ensure that you are developing your energy resources in a sustainable way, you have to ensure you are investing in technology, ensure that your extraction is sustainable; that integrated land use management is important and we understand that you need to have a strong regulatory process with respect to water usage, land management, air quality; that communities matter, and that First Nations matter. We want to be able to talk about the fact we have an integrated approach and have had for well over a decade.
Q: It has been reported that you have a carbon tax plan – the 40/40 plan. Is that a part of your effort to get Keystone XL passed?
A: There are two separate pieces to this. One is that Keystone is a particular project and because people are making a decision around that project, they are looking to see what Canada and Alberta are doing around their environmental record, and so we come and talk about that. This story about 40/40 is sort of – how would I say it – it was reported as ‘news.’ It’s actually part of the work we just do on an ongoing basis with the federal government. This happens to be a point in time when Alberta and Ottawa are working intensely on what our new oil and gas regulations will look like with respect to emissions. So 40/40 isn’t a number that we’ve in any way landed on or proposed. I know that is the story out there. But that’s just a story. It’s very much around what are we doing to make sure we continue to be competitive – that we ensure that we are putting in place an integrated approach to economic development and energy.
This can never be a quid pro quo. This isn’t about saying [to the Obama administration], ‘If we were to make changes, please approve the deal.’ That’s not right. That’s not good public policy. In fact, we have never taken that approach with respect to the work that we do on environmental sustainability. So even though it’s been reported as a particular step or a point in time, nothing has dramatically has shifted. It really is just an evolution, an ongoing dialogue we have with the federal government and industry about what we can do to make sure we are still able to achieve our targets in a competitive way.
Q: So you are saying this did not come out of the effort to approve Keystone?
Q: So what was the genesis?
A: There was not a genesis. We have a minister of environment and a minister of energy who meet with their federal counterparts to make sure we are putting in place policies and approach to environmental sustainability that make sense for Canada and Alberta. So it’s not as if there was a point in time that people sat down and said it’s time to make a decision to go in a different direction.
Q: What have you heard from the U.S. administration – how explicit or blunt or vague have they been in saying, “Look, we can’t approve this unless you do more on emissions?” Have you ever heard a message like that?
A: No. I haven’t had any either pointed or vague conversation with respect to these issues that is any different than if I’m sitting in Edmonton and talking to people at a coffee shop. This is what we talk about now, as citizens of the world.
Q: Is 40/40 a specific proposal or a jumping off point? Some environmentalists say you would need $100 per tonne, or $150 per tonne to really get the remissions reductions…
A: But that’s the point. This isn’t a specific proposal. This is part of an evolution with respect to what we do around policy. We’re not negotiating on specifics with environmental groups, we’re not negotiating with anyone. We’re not negotiating on this issue. We are simply developing a policy approach — because at the end of the day, that’s what matters. It has to be sustainable. It has to make sense for Canada’s economy. It has to make sense for Alberta.
Q: So the 40/40 thing is not a policy, it’s just an idea put out there for discussion.. So at the end of the day, it could not happen at all, or it could be a different number?
Q: So you are collecting input into this?
A: Everyone is. If you were to sit down right now with industry in Alberta they would tell you they run numbers like this all the time. It’s not even related to environmental issues. It could be numbers with respect to this issue or with respect to pipeline capacity or how many rail cars they need to be able to contract to export product.
Q: Is it your expectation that at some point the carbon tax in Alberta will be raised from where it is now?
A: I don’t know. And it’s not a carbon tax, it’s a price on carbon – and that’s different. A carbon tax is when you tax emitters and use the money for whatever government may choose to do. We don’t do that. We have a price on carbon, of $15 per tonne, that goes into a technology fund that is then used to invest in projects that will allow for more sustainable development of the resource. It’s not a carbon tax, it’s a price on carbon. There is a difference.
Q: So do you expect to change that $15 – maybe not to $40, but to something else?
A: I don’t know.
Q: Is there some timeline at which these decisions are being made?
Q: So it’s been reported as a new policy but really it’s just an internal conversation?
A: Think about what politicians do every single day, what governments do. We continually try to get ahead of public policy issues.
Q: So this is an internal policy discussion?
A: It’s not even internal. We are talking to industry they are talking to the federal government, and the federal government is talking to us. This is our job. This is what we do.
Q: So you don’t have a particular vision of where this might go?
Q: Will you be discussing it here [in Washington, DC] while you are meeting with people?
A: What we’ve talked about is the fund we have in place. There are still a lot of people here who are surprised by the fact that we have legislation that has put a price on carbon. The governor of Colorado was visiting two weeks ago and I had a chat with him, and he said he didn’t know we had a price on carbon. And it’s important for people to know that.
We’re not down here to pitch a project and say, ‘Boy, if you approve this project, we’ll do all these things.’ What we are here to do is say, ‘We want to tell you what we’ve done because we are proud of what our record has been.” The technology fund, carbon capture and storage, integrated land use planning, ensuring that land, air and water are developed in a sustainable way, an independent monitoring agency that provides real time data, a strong regulatory process. These are all things we’ve already done and we want to make sure people know that.
Q: Do you expect to be coming out with in the next months or a year new steps to get closer to meeting emissions targets?
A: Well, we’re very confident with respect to where we are going already. If there are innovative approaches that allow us to do more, that’s great.
By Aaron Wherry - Friday, April 5, 2013 at 11:19 AM - 0 Comments
Alberta’s environment minister has apparently floated the possibility of increasing the province’s carbon tax to $40 per tonne. Questions abound and the Alberta government is apparently keen to explain that federal regulations are what would lead them to increase the levy.
The feds are about to release their own rules. The only way Alberta can avoid bowing to them is to enact provincial standards that are equally tough; or, better still, just a bit more stringent. This meets the current buzzword requirement: equivalency. To run its own environmental regime, a province must have a system that meets or exceeds federal targets. Then there’s the revenue thing. If there’s to be a bigger emissions penalty, Alberta damn well wants the cash pouring into the anemic local treasury, rather than the federal one.
So, similar to what was suggested on Tuesday, the federal Conservatives, having spent the last several months opposing the sort of cap-and-trade system they once supported, might now be responsible for precipitating the increase of a carbon price at the provincial level.
Thing is, Tzeporah Berman argues, $40 per tonne isn’t enough.
The reality is that you don’t really open up many more opportunities for innovation and reduction with anything under $40 per tonne. In order to truly change the economic playing field in favour of clean energy, it needs to progress to $100 or $150 over the next decade so that big investments such as carbon capture and storage start making sense economically. Currently, they don’t.
By Aaron Wherry - Thursday, April 4, 2013 at 10:37 AM - 0 Comments
Mike De Souza finds that the Conservatives purchased carbon offsets to account for emissions related to the Vancouver Olympics.
The Harper government paid $226,450 to conserve trees in a British Columbia forest to prevent its activities at the 2010 Vancouver Olympics from contributing to global warming, say newly released internal memos obtained by Postmedia News. The three memos, prepared for Environment Minister Peter Kent, said the money was used to buy certified credits to compensate for about 16,000 tonnes of carbon dioxide equivalent emissions generated from federal employee travel, security, the torch relay and other government activities at the Vancouver Olympics, which were hailed as the first carbon neutral games in history…
The total would be equivalent to paying a carbon tax worth about $13.55 per tonne of emissions. It does not include other credits that were donated and purchased by suppliers and sponsors to make the Vancouver event entirely carbon neutral.
But it gets worse. Not only did the Harper government pay for its emissions, it apparently did so with an official pronouncement of pride in having done so.
Today, Canada’s Environment Minister, the Honourable Jim Prentice, announced the Government of Canada’s commitment to offset federal greenhouse gas emissions for the 2010 Olympic and Paralympic Winter Games.
“Canada is proud to be the first host country in history to help offset the greenhouse gas emissions of its Olympic Games,” said Minister Prentice. “This commitment is one of many ways our Government is contributing to sustainable Games and meeting our global climate change responsibilities.”
Of course, the Olympics occurred in 2010, a year before the Conservatives started criticizing Liberal and NDP plans for cap-and-trade and two years before the Conservatives decided that to put a price on carbon was to wish great suffering upon Canadian families.
That said, the Prime Minister, presumably unaware until now of this price paid, will no doubt now wish to reconsider his generally fond assessment of the Vancouver Olympics. And it is probably a good thing that Jim Prentice quit in November 2010 for he would surely have to resign if he was in cabinet this morning.
The Conservatives on pricing carbon: For it before they were against it before they precipitated it?
By Aaron Wherry - Tuesday, April 2, 2013 at 12:35 PM - 0 Comments
John Ivison explains how the Harper government’s regulations on the oil and gas sector might be implemented.
Mr. Kent was said to be in Alberta last month, meeting with industry executives and there seems to be a broad agreement on both sides. Companies like Exxon, Cenovus Energy and Total are on record as saying a greenhouse gas levy at least brings cost certainty and reduces concern about trade restrictions on oil sands bitumen based on carbon density. While the feds will not impose that tax, their regulations will inevitably lead to a price being placed on carbon…
… eventually, the deal that Mr. Kent is currently negotiating will be released for public discussion. What is it likely to look like? One thing is certain — Ottawa will not be imposing directly anything that walks, talks or quacks like a carbon tax. The most likely scenario would see Ottawa set a target for large emitters across the country. Then, provincial governments would create mechanisms to meet those targets, via a carbon tax or cap and trade system.
For their part, the Harper Conservative are intent on basing the next election campaign message around the NDP’s “dangerous” new taxes and spending schemes.
So, under this scenario, the Conservatives, who promised and advocated for cap-and-trade while opposing a carbon tax, but then decided that cap-and-trade was the same thing as a carbon tax and proceeded to loudly and repeatedly criticize the NDP’s proposal of cap-and-trade, will soon introduce greenhouse gas emission regulations that will lead the provinces to implement carbon taxes or cap-and-trade systems, but then the Conservatives will maybe still spend the next election campaign criticizing the NDP’s interest in cap-and-trade.
British Columbia and Alberta already have carbon-pricing policies in effect. Ontario is committed to a cap-and-trade system.The Quebec government is moving forward with a cap-and-trade system. Manitoba has already implemented a price on emissions from coal and would like to see a federal system of carbon pricing established. The Saskatchewan government is willing to put a price on carbon. And the Newfoundland government is considering a carbon tax or cap-and-trade system as options.
President Barack Obama favours cap-and-trade. Asked in February what the Harper government would do if the United States implemented cap-and-trade, Joe Oliver said that scenario was a hypothetical he didn’t want to get into.
By Aaron Wherry - Tuesday, March 19, 2013 at 11:15 AM - 0 Comments
On the environment, Redford said she would like to see the federal government adopt a strategy similar to Alberta’s $15-per-tonne carbon levy on large industrial emitters that are unable to meet their greenhouse-gas reduction targets, with the cash then used to improve environmental outcomes. “We think that’s the right approach,” Redford said, when asked whether Ottawa should introduce a federal carbon levy on large emitters.
Alberta’s carbon tax of sorts has generated more than $300 million for a technology fund used to green operations and improve environmental performance. “The federal government needs to be supportive of that policy (setting a carbon price) in areas where it can actually make a difference to the outcome. Simply symbolically setting a price doesn’t actually achieve an outcome,” she added. “So I think it’s fine to set targets, I think it’s time to be supportive of sectors that are looking to try to reduce emissions and to be able to partner together on that.”
But Ms. Redford’s office now says that she wasn’t quite endorsing a national carbon tax.
Premier Alison Redford did not advocate for a national carbon tax as today’s PostMedia story implies. The Premier was clear that Alberta’s climate change actions to date—including the creation of a fund for clean technology projects—have been successful and are driving innovation. Clean technology initiatives are worthy of consideration as the federal government develops new greenhouse gas emission regulations for the oil and gas industry.
John Baird once bragged of plans to establish a clean technology fund with the proceeds of a $15-per-tonne carbon price, but the Harper government has since decided that any price on carbon is a carbon tax.
But then Ms. Redford also prefers her province’s carbon levy to a cap-and-trade system (another policy the Harper government used to support).
Redford, however, doesn’t believe a widespread cap-and-trade emissions reduction scheme is necessary or the best approach for the federal government, questioning whether it would actually be effective in reducing emissions. “The goal is not to do something as a PR stunt; it’s to actually do something that is going to make a difference to outcomes. It can be a price on carbon, it can be work on consumer policies, energy efficiency, dealing with greening the (electricity) grid, that kind of thing,” she said.
But then the Alberta NDP doesn’t think the province’s carbon levy is sufficient.
“The ad is extremely misleading with respect to Alberta’s environmental record. It says that we have put a price on carbon. What we have is a very low price put on carbon intensity emissions,” Mason said.
By Aaron Wherry - Tuesday, March 12, 2013 at 1:59 PM - 0 Comments
Keith Neuman of Environics argues the public is willing to accept a tax on carbon emissions.
Let’s start with the B.C. carbon tax, which was introduced by then-Premier Gordon Campbell with surprisingly little advance preparation of the political or public ground. Public opinion surveys conducted just after the announcement showed a modest majority of British Columbians in support of the new policy. This support wavered later in the year when the tax came into effect at the same time gas prices spiked, but later recovered and subsequently withstood a frontal attack by the NDP in the 2009 provincial election. Today, the B.C. carbon tax is supported by a clear majority (64 per cent) of provincial residents, and unlikely to be an issue in the upcoming May election.
Does British Columbia represent an anomaly that could not be repeated in other parts of the country? In fact, research conducted by Environics Research and more recently the Environics Institute shows that a majority (59 per cent) of Canadians outside of B.C. would support the introduction of a B.C. style carbon tax in their own province, a proportion that has been slowly building over the past four years. Majority support for such a tax is expressed in all provinces except Alberta (at 43 per cent), and is most widespread in Quebec (67 per cent), followed by Manitoba (59 per cent), Saskatchewan (58 per cent), Ontario (58 per cent) and Atlantic Canada (54 per cent).
The research from Environics, which has been asking about a BC-style carbon tax since February 2008, shows that support has gradually increased and strong opposition has decreased. But its finding would seem to clash with what a survey conducted for Environment Canada found last June. In that poll, 43.5% of respondents disagreed with the idea of a federal carbon tax.
On that count, it is probably worth noting how the survey questions were phrased.
Here is what Environics asked.
As you may know, British Columbia now has a tax on all carbon-based fuels used by consumers and businesses in the province, as a way to encourage reductions in greenhouse gas emissions generated in the province. This tax is now 7.2 cents per litre. This tax is “revenue neutral” which means the same amount raised through this tax each year is refunded – by law – to taxpayers in the form of lower personal income and corporate taxes. Do you strongly support, somewhat support, somewhat oppose or strongly oppose this carbon tax for B.C.?
And here is the statement that Environment Canada tested.
Canada needs to implement a federal carbon tax to promote energy efficiency and protect the environment, even though it means increasing the cost of things like gas and groceries for consumers.
The “gas and groceries” elucidation is popular with Conservatives who seek to denigrate the NDP’s cap-and-trade proposal.
This would seem to suggest that how the proposal is presented has some impact on how the proposal is received. See also this survey from 2008.
And there are at least two other complications here. First, neither the Liberal proposal of a carbon tax in 2008, nor the NDP’s proposal of cap-and-trade match the proposal presented by Environics: Stephane Dion would have used some of the revenue to assist low-income families, Thomas Mulcair would use most of the revenue for environmental initiatives.
Second, if the Conservatives can successfully turn an election into a race between those who would tax carbon and those who wouldn’t, the polling split combined with the current political split still basically favours the Conservatives: supporters of a carbon tax (59%) split between the New Democrats, Liberals and Greens, while opponents of a carbon tax (38%) would have only the Conservatives. Of course, the Conservatives can’t claim that their policies on greenhouse gas emissions won’t include costs and of course the current Conservative position on cap-and-trade is entirely at odds with their position from 2004 through 2009, but if it’s a referendum on the phrase “carbon tax,” the Conservatives seem to start with the math in their favour.
The Stephane Dion experience demonstrated that no matter how much a policy can be justified, it still needs sufficient popular support and political execution to be enacted. Polling numbers such as these should have some impact on the discussion. But they obviously don’t quite win the debate.
By Aaron Wherry - Monday, March 11, 2013 at 2:07 PM - 0 Comments
The Prime Minister’s Office has lately been uploading old speeches of Mr. Harper’s to YouTube. On Friday, for instance, this speech from June 2007, delivered in Berlin, was added.
In it, Mr. Harper explains, in part, his government’s approach to reducing greenhouse gas thusly.
So we vowed to develop a real plan – with real, absolute, mandatory reductions in greenhouse gas emissions. A plan that’s practical, affordable and achievable. A plan that’s balanced and market-driven. A plan that deals with our growing economy and population…
Of course, it may not be possible for all countries, or all industries and firms within all countries, to reduce their emissions by the same amount on the same time line. That is why other compliance measures such as carbon offsets and carbon trading are also necessary. They are part of Canada’s plan and, provided they are not just an accounting shell game, they must be part of a universal, international regime.
It was about seven months later that the Harper government started explicitly endorsing the idea of a “price on carbon.” And it was almost exactly a year after his speech in Berlin that the Prime Minister gave this speech in London (which was uploaded to YouTube four years ago), in which he managed to both support a price on carbon and oppose a carbon tax.
By Aaron Wherry - Monday, March 4, 2013 at 12:31 PM - 0 Comments
Sustainable Prosperity finds that oil and energy companies are already building a price on carbon into their estimates.
The 10 companies surveyed in the report including BP, Shell, Suncor, Statoil, Devon, Cenovus, Penn West, Enbridge, Ontario Power Generation and SaskPower are using shadow carbon prices of between C$15-68/tonne carbon dioxide equivalent (Co2e), reflecting a range of expectations about the actual short and long-term carbon price. The top of the range represents a price projection for future years: C$48 – $68/tonne for 2020 and up to 2040.
A shadow carbon price is the hypothetical price of carbon used voluntarily by a company, reflecting the company’s expectations of the future market carbon price or regulatory cost, or the cost of reducing or offsetting carbon emissions. The company’s choice of shadow carbon price reflects the actual regulatory price (such as Alberta’s C$15/tonne contribution to the province’s Climate Change Emissions Management Corporation) and the expected future increase in that price, among other factors. “Current carbon pricing systems in Canada provide varying levels of policy certainty for companies. That is why more and more companies are using a shadow carbon price: to ensure they are prepared for the future when carbon emissions are likely to be priced.” said Mike Wilson, Sustainable Prosperity’s Executive Director.
Note here that a price on carbon includes the possibility of costs related to either market-based solutions (cap-and-trade, carbon tax) or regulation.
Of course, the Harper government also uses a price on carbon in its estimates.
By Aaron Wherry - Monday, February 25, 2013 at 1:45 PM - 0 Comments
Environment Minister Peter Kent announced the government’s regulations for “heavy-duty vehicles and engines” this morning. For the purposes of determining the benefit of regulations, the government uses something called the “social cost of carbon.” Here is the EPA’s explanation of that calculation. And here is how the Harper government explains the figure in today’s regulations.
The SCC is used in the modelling of the cost-benefit analysis of environmental regulations in a RIAS to quantify the benefits of reducing GHG emissions. It represents an estimate of the economic value of avoided climate change damages at the global level for current and future generations as a result of reducing GHG emissions. The calculations of SCC are independent of the method used to reduce emissions. The SCC is also used by the United States in their costbenefit analysis of regulations. The values used by Environment Canada are based on the extensive work of the U.S. Interagency Working Group on the Social Cost of Carbon.
The estimated value of avoided damages from GHG reductions is based on the climate change damages avoided at the global level. These damages are usually referred to as the social cost of carbon (SCC). Estimates of the SCC between and within countries vary widely due to challenges in predicting future emissions, climate change, damages and determining the appropriate weight to place on future costs relative to near-term costs (discount rate).
SCC values used in this assessment draw on ongoing work being undertaken by Environment Canada in collaboration with a federal interdepartmental working group, and in consultation with a number of external academic experts. This work involves reviewing existing literature and other countries’ approaches to valuing GHG emissions. Preliminary recommendations, based on current literature and, in line with the approach adopted by the U.S. Interagency Working Group on the Social Cost of Carbon, are that it is reasonable to estimate SCC values at $28.44/tonne of CO2 in 2012, increasing at a given percentage each year associated with the expected growth in damages. Environment Canada’s review also concludes that a value of $112.37/tonne in 2012 should be considered, reflecting arguments raised by Weitzman (2011)14 and Pindyck (2011) regarding the treatment of right-skewed probability distributions of the SCC in costbenefit analyses.16 Their argument calls for full consideration of low probability, high-cost climate damage scenarios in cost-benefit analyses to more accurately reflect risk. A value of $112.37 per tonne does not, however, reflect the extreme end of SCC estimates, as some studies have produced values exceeding $1 thousand per tonne of carbon emitted.
As shown in Figure 3 below, the social cost of carbon values increase over time to reflect the increasing marginal damages of climate change as projected GHG concentrations increase. The time-varying schedule of SCC estimates for Canada has been derived from the work of the U.S. Interagency Working Group. The federal interdepartmental working group on SCC also concluded that it is necessary to continually review the above estimates in order to incorporate advances in physical sciences, economic literature, and modelling to ensure the SCC estimates remain current. Environment Canada will continue to collaborate with the federal interdepartmental working group and outside experts to review and incorporate as appropriate new research on SCC into the future.
For the purposes of the cost-benefit analysis, the government appears to use the $28.44/tonne projection to project $500 million in savings.
For those worrying about the price of Thanksgiving turkey, the new regulations carry about $800 million in technology costs (that will be passed on to consumers) and another $4.8 billion in projected fuel savings.
What I suspect is necessary for a real debate on greenhouse gas emissions policy is a cost-benefit analysis that compares the Harper government’s regulations and the NDP’s cap-and-trade proposal.
By Aaron Wherry - Friday, February 22, 2013 at 3:15 PM - 0 Comments
Michael Den Tandt wonders if the Conservatives will have to stop freaking out about the NDP’s cap-and-trade proposal if they hope to see the Keystone XL pipeline approved by the United States. If the Conservatives think likewise, we’ll presumably see a different tone on Monday when the House returns to business (the Conservatives certainly weren’t shying away from their preferred talking point when the House was sitting a week ago).
Meanwhile, China is talking about a carbon tax and Ontario is thought to be moving forward with cap-and-trade and here is what the woman thought to be President Barack Obama’s choice to lead the EPA told an audience of regulators yesterday.
Addressing a room full of familiar faces at a workshop of state and federal regulators, McCarthy applauded local efforts, such as the nine-state carbon cap-and-trade program in the Northeast United States, for showing Washington a path forward on combating climate change.
“At the EPA we will do our part to build on your success,” she said at the Georgetown University Law Center. “We can find a way instead of having national solutions…to open up opportunities for states to use all the flexibility, the ingenuity, the innovation that you have shown could be done, and just simply get it done.”
Stephen Gordon talks to Global about what international developments might mean for Canada.
As the rest of the world starts to put a price on carbon, any Canadian exporter is going to have start paying that price regardless of where it is located,” said Laval University economics professor Stephen Gordon. Carbon taxes are usually applied to imports as well, so local producers are not disadvantaged, according to Gordon.
The U.S. is Canada’s largest trading partner and accepted $330.1 billion worth of exports from Canada in 2011. China ranks number three when it comes to Canada’s largest export destinations, accepting $16.8 billion in exports in 2011. “If Canadian exporters are already paying for it why not send that tax revenue to Ottawa instead of Washington or Beijing,” Gordon said.
And PJ Partington compares coal regulations in Canada and the United States.
The U.S. ambassador has made it crystal clear that as America steps up its climate action it expects us to do better too. The new line from the Harper government is that we’re already there, particularly on curbing emissions from coal power. Foreign minister John Baird recently suggested “maybe the United States could join Canada” on “taking concrete direct action with respect to dirty, coal fired electricity generation,” adding that “we’re the only country in the world that’s committed to getting out of the dirty coal electricity generation business.”
Sadly, Canada isn’t the shining example of coal-curbing excellence that Harper’s ministers are claiming. When it comes to regulating greenhouse gases (GHGs) from coal power, we’re doing about the same as our neighbours to the South — and may well be eclipsed before too long. While coal power is America’s biggest source of GHGs, accounting for over a quarter of national emissions in 2010, it accounted for about 11 per cent of Canada’s in the same year. As for “getting out of the dirty coal electricity generation business,” Canada won’t be fulfilling that commitment until 2062.
By Aaron Wherry - Thursday, February 14, 2013 at 4:39 PM - 0 Comments
Natural Resources Minister Joe Oliver, asked after QP today about the possibility of the United States adopting a cap-and-trade system, as raised by President Barack Obama in the State of the Union address.
Reporter: If they move to cap-and-trade, is that an initiative this government would support as well?
Oliver: Well, that’s speculative and hypothetical. I don’t want to get into that.
Mr. Oliver tried to be more categorical in November, but was undone by the convoluted history of his party’s position (ie. previously opposed to a carbon tax, while in favour of cap-and-trade, but now opposed to cap-and-trade, while saying cap-and-trade is the same thing as a carbon tax).
There are two ways to clarify matters now. Mr. Oliver could say that the Harper government would never, ever, ever, ever implement a cap-and-trade system, even if the United States did so. Or Mr. Oliver could say that, while the Harper government currently opposes cap-and-trade, it would have to at least consider implementing such a system if the United States did so. Although the latter would likely require some degree of explanation given the repeated and strenuous condemnation of cap-and-trade that has been offered these recent months.
This is probably academic (cap-and-trade is unlikely to pass the House of Representatives, although I’m interested to see if a “market-based solution” becomes more interesting to Republicans when the alternative—regulations—comes into focus). But this issue also seems to be of great and pressing concern to many Conservative MPs, so we should all try to strive for the greatest clarity.
By Aaron Wherry - Wednesday, February 13, 2013 at 12:52 PM - 0 Comments
From the Conservative MP’s statement to the House on Monday.
Mr. Speaker, when the Liberal party asked Canadians for a mandate to implement a job-killing carbon tax, they flatly rejected it. No matter to the NDP leader; he is ignoring Canadians’ position and is peddling a similar, more expensive carbon tax.
The Liberal party’s 2008 platform included a carbon tax. In that election, the Liberals won 30.2% of the popular vote.
At the same time, 55.8% of Canadians—the combined popular vote for the Conservatives and NDP in 2008—voted for platforms that included cap-and-trade. And what the NDP is proposing now is cap-and-trade.
Mr. Rickford was first elected as a Conservative in 2008, so presumably he is familiar with the platform the party put forward that year and what the Harper government then said and did about pursuing cap-and-trade through 2009.
By Aaron Wherry - Friday, February 8, 2013 at 2:38 PM - 0 Comments
Conservative concerns about cap-and-trade have apparently not eased, but, on Thursday, Conservative MP Rick Dykstra was also moved to note the seventh anniversary of the Conservative party forming government.
Mr. Speaker, it has been seven years since Canadians placed their confidence, trust and unwavering support in this Conservative government. Since then we have kept our promises. We have delivered results. We will continue to work hard for this great nation. Our government remains focused on the economy, on families, safe communities and pride in being a Canadian citizen.
Unfortunately, the Leader of the Opposition and his party have a different agenda that will hurt Canada and hurt Canadians. Listed on page 4 of the NDP’s party platform, in black and white, is a $20 billion carbon tax. In fact, the Leader of the Opposition even said that of course he has a cap-and-trade program that “will produce billions”.
Our government will continue to fight this job-killing, $20 billion carbon tax, stand up for Canada and make sure that we make all Canadian citizens proud of what we do as a government.
Two of the promises yet to be kept by Mr. Dykstra’s side: to establish a price on carbon and pursue a cap-and-trade system. (The Conservative suggestion of cap-and-trade is actually older than the Harper government, dating to 2004.)
We are a month late to the celebration of the fifth anniversary of John Baird championing a price a carbon. But less than three weeks from now we can celebrate the fifth anniversary of Jim Flaherty standing in the House and committing $66 million to “to lay the foundation for market based mechanisms that will establish a price for carbon and support the development of carbon trading in Canada.”
Also mark your calendar for May 29, when the country will mark the fifth anniversary of Stephen Harper telling a London audience that “Canadian industries that do not meet their emission reduction targets will be required to do one of three things. They will have access to a domestic carbon trading system which will include offset credits for non-industrial practices that reduce emissions. We eventually hope to participate in a North American trading regime, depending on what action the United States takes, and I’ll talk about that in a second. We likewise hope to participate someday in a more mature and robust emissions trading regime internationally. As well, industries will have access to credits through the United Nations Clean Development Mechanism … I should mention that while our plan will effectively establish a price on carbon of $65 a tonne, growing to that rate over the next decade, our Government has opted not to apply carbon taxes.”
By Aaron Wherry - Friday, February 1, 2013 at 12:56 PM - 0 Comments
Bloomberg looks at support within the oil industry for a carbon tax.
The contradiction of an industry seeking a new tax on itself has emerged in energy-rich Canada because producers are concerned the crude they process from tar-like sands will be barred from foreign markets for releasing more carbon in its production than competing fossil fuels.
Oil companies operating in Canada such as Exxon Mobil Corp. (XOM), Total SA (FP) of France and Canada’s Cenovus Energy Inc. (CVE) plan to convert billions of barrels of the sticky bitumen into diesel and gasoline. Under foreign and domestic pressure, they now see a greenhouse-gas levy helping to provide access to markets and more predictable costs for Canada’s biggest export industry, which shipped C$68 billion ($68 billion) of oil in 2011.
By Aaron Wherry - Wednesday, January 30, 2013 at 4:48 PM - 0 Comments
The newest Conservative MP demonstrated her keen sense of satire with a statement to the House before Question Period this afternoon.
Mr. Speaker, everyone has heard the old saying, “don’t talk the talk unless you can walk the walk”. Unfortunately, I do not think the New Democrats truly understand the meaning of this statement. In fact, yesterday, you, Mr. Speaker, had to put the NDP member for Timmins—James Bay back in his place for using unparliamentary language while the NDP ironically tabled a motion to improve House decorum.
Better yet, this motion refers to instances of extreme misrepresentation of facts or position in the House. Canadians are rightly worried about the New Democrats’ misrepresentation of facts and positions. After all, the NDP is the party that has a $21 billion carbon tax in its policy documents in black and white and yet its members spent the fall denying it here in the House. We will continue to expose the NDP’s $21 billion carbon tax that would raise the price of everything.
Here again is a rough guide to the carbon tax farce.
By Aaron Wherry - Friday, January 25, 2013 at 4:06 PM - 0 Comments
Jim Yong Kim, president of the World Bank, calls for a price on carbon as part of an agenda to deal with climate change.
The world’s top priority must be to get finance flowing and get prices right on all aspects of energy costs to support low-carbon growth. Achieving a predictable price on carbon that accurately reflects real environmental costs is key to delivering emission reductions at scale. Correct energy pricing can also provide incentives for investments in energy efficiency and cleaner energy technologies.
A second immediate step is to end harmful fuel subsidies globally, which could lead to a 5 percent fall in emissions by 2020. Countries spend more than $500 billion annually in fossil-fuel subsidies and an additional $500 billion in other subsidies, often related to agriculture and water, that are, ultimately, environmentally harmful. That trillion dollars could be put to better use for the jobs of the future, social safety nets or vaccines.