Regulations and carbon pricing can work together

By Aaron Wherry - Saturday, December 8, 2012 at 8:00 AM - 0 Comments

On Friday, the Harper government’s new fuel efficiency regulations were published in the Canada Gazette, including the full cost-benefit analysis.

These costs are incremental to the baseline so, for example, technology costs add $195 million (present value) to the costs of the model year 2017 fleet, and add $2.4 billion (present value) to the costs of the model year 2025 fleet.

The incremental technology costs for model year 2017 are expected to be $127 for cars and $162 for light trucks, increasing to $1,856 for cars and $2,453 for light trucks in model year 2025 in order to meet the increasingly stringent standards of the proposed Regulations. In reality, relative changes in vehicle prices and performance may affect consumer choice; however, it is not within the capacity of the analysis to model consumer choice.

PJ Partington of the Pembina Institute defends the new standards and argues that a price on carbon would complement such regulations.

None of this is to say that carbon pricing doesn’t have an important role in tackling emissions from transportation. Carbon pricing would support these regulations by creating more demand for fuel-efficient vehicles and encouraging people to reduce their vehicle use. Carbon pricing would also provide revenues that governments could re-invest in clean transportation options like transit and electric vehicle infrastructure.

We don’t see it as a choice between carbon pricing and efficiency standards: they’re complementary, not alternatives. By ensuring that efficiency continues to improve across the board, standards like these help manage the impact of higher gas prices from carbon pricing, and ensures that they will have plenty of cleaner options to choose from. The Western Climate Initiative, which features a cap-and-trade system, also sees stringent vehicle standards as a key complementary policy to carbon pricing. An economic modeling assessment of climate policy options for Canada that we published in 2009 took the same approach. 

Recycling and reusing talking points

By Aaron Wherry - Friday, September 21, 2012 at 12:09 PM - 0 Comments

Clare Demerse provides a very useful overview of policy options for reducing greenhouse gas emissions (if it had been published earlier I would’ve included it in my rough guide).

The Conservatives clearly believe that a good offense is the best defense. But the flurry of talking points should not obscure another unfortunate reality about curbing pollution: the Conservatives’ preferred approach could cost Canada’s economy more than either cap-and-trade or carbon taxes. Rather than pricing carbon — the approach favoured by the Canadian Council of Chief Executives and a who’s who of Canadian industry players — the Harper government now says it will cut greenhouse gas pollution through sector-by-sector regulations on Canada’s industries.

If you polled economists, you’d find virtual unanimity that regulations are less efficient, and thus cost more, than a carbon price. That’s because they’re less flexible, making changes by decree rather than tapping into companies’ ingenuity by giving them a goal to meet in whatever way works best for them. But regulations only cost more than a price on carbon if you’re using them to reach the same environmental goal … So far, Ottawa has put precious few new regulations on the books. The federal government’s most recent announcement — a set of regulations to cut pollution from coal-fired power plants — have been weakened to the point that they will now allow the oldest and dirtiest coal plants in Canada to run for up to half a century from the date they were commissioned without any limit on their greenhouse gas pollution.

The EU has a point about the oilsands

By Erica Alini - Friday, February 24, 2012 at 5:53 PM - 0 Comments

Jeff McIntosh/AP Photo

Yesterday marked a rather unremarkable chapter in the ongoing PR battle between the Harper government and much of the rest of the world around Alberta’s oil. On Thursday the EU held a vote on whether to label the oilsands as a dirtier kind of feedstock, a move that would make fuel derived from it less competitive compared to oil refined from “cleaner” kinds of crude. It was a deliberation among technical experts–not elected officials–and it failed to reach the qualified majority required under the EU’s mind-boggling voting system anyway. The vote that matters (by ministers of EU countries) will be held in June.

Nonetheless, both sides sized this virtually irrelevant step in the EU’s Byzantine legislative process to make some noise in the press–there was also news this week that Ottawa threatened a trade war if Brussels goes ahead with the purported fuel-labelling. So it’s as good an opportunity as any to ask: Does Europe have a valid point about the oilsands?

Brussels’ Fuel Quality Directive, as the measure is called, is far from perfect. Andrew Leach, of the University of Alberta, points out that the EU’s classification of different types of fuel, which is based on definitions used by the U.S. Geological Survey, makes some iffy distinctions between oilsands and other kinds of heavy oil that are likely just as polluting. Trying to classify fuels as more or less dirty based on the type of crude oil they came from, concludes Leach, isn’t the best way to go: “The EU FQD, as proposed, will treat some high emissions crudes as low emissions crudes, and they could greatly improve the policy by initially including all … heavy oil production at a high benchmark.” Even Alberta’s Pembina Institute notes that the EU could fine-tune things by “differentiating in the directive between crude supply types (e.g. for heavy oil).”

Continue…

'It's bait and switch'

By Aaron Wherry - Monday, January 10, 2011 at 10:25 AM - 73 Comments

Steven Chase looks at the government’s rhetorical turn towards “ethical oil.”

Environmental activists say the Harper government is adopting a classic diversionary tactic to redirect attention away from the oil sands’ poor environmental record. “It’s a rhetorical device; it’s bait and switch,” said Ed Whittingham, executive director of the Pembina Institute. “It’s designed to make us forget about the negative environmental impacts we have in Canada because you are comparing to a completely lower standard in other countries.”

Laura Payton has more.

Canada climate-change hoax of the week

By Colby Cosh - Tuesday, December 15, 2009 at 9:43 AM - 74 Comments

Contrary to popular belief, it wasn’t the one by the Yes Men.

Well, that's inconvenient (II)

By Aaron Wherry - Wednesday, September 23, 2009 at 6:44 PM - 4 Comments

Various jurisdictions have their doubts about the Harper’s government’s environmental agenda.

The numbers won’t add up in the Harper government’s proposed climate-change plan unless it fixes flaws that jeopardize the plan’s credibility, say some of North America’s largest provincial and state governments.

The Western Climate Initiative — a coalition of governments that includes Ontario, Quebec, British Columbia, Manitoba and California — says a draft version of a federal “offsets” system for rewarding green practices must be revised to prevent businesses from profiting from actions that don’t actually reduce the amount of heat-trapping gases in the atmosphere…

The Pembina Institute, an Alberta-based environmental research group, said the proposed system would result in fictional emissions reductions in the same way that lax financial-accounting rules have created fictional profits. ”If the loopholes aren’t closed, actual emissions are likely to be millions of tonnes higher than the nominal level of a future regulated emissions cap,” said Matthew Bramley, director of Pembina’s climate-change policy.

Obama's Green Dream Team and what it means for Alberta's oil

By Alex Shimo - Thursday, December 11, 2008 at 5:59 PM - 14 Comments

Obama announced his energy team yesterday, nominating Nobel physicist Steven Chu to head the Department of Energy. This is an important victory for science and environmentalists, since it is the first time a scientist is heading a major executive branch department since the 1970s, according to Marc Ambinder, political columnist at The Atlantic Monthly. Chu has an impressive resume - he’s a Nobel Prize winning physicist and he’s been the director of the Lawrence Berkeley National Laboratory since 2004, where he has pushed aggressively for research into solar power, biofuels, and other alternative energy as a way to combat global warming. Obama also gave former EPA administrator Carol Brower a new White House position overseeing environmental, energy, and climate policies. Lisa Jackson of New Jersey to be his Environmental Protection Agency head and Nancy Sutley, deputy mayor of Los Angeles, will lead the White House Council on Environmental Quality.

What does this mean for Canada? The tar sands and its growing emissions will likely come under more intense scrutiny. Continue…