Dec 14,
2015
The Next #90Days is about Getting Carbon Pricing Right in Canada
On Saturday, at the conclusion of the Paris COP, the world achieved a historic agreement on how to go forward with global action on climate change. It includes, among its many terms, a commitment to keep warming well below 2 degrees with the aim of a 1.5 degree limit, safeguards and financial supports for vulnerable nations, and recognition that national commitments are only a starting point; deeper action will be required in the years to come. What does all this mean for Canada? That remains to be seen, but in the next three months that road back from Paris will take shape.
In the days leading up to COP and in the days during it, we have seen unprecedented Canadian movement on climate policy and, more specifically, on carbon pricing as a mechanism for lowering greenhouse gas emissions. Alberta announced its plan, which includes an economy-wide $30/tonne price on carbon. Ontario released new policy options, seeking engagement on how it will design the details of its cap and trade program. Manitoba announced its intentions to develop cap and trade and to link with Ontario’s and Quebec’s systems. There are rumblings from New Brunswick as well.
Within the next #90Days the premiers of all provinces will meet with the Prime Minister and together determine a way forward for Canada’s approach to climate change policy and the role carbon pricing will play in that strategy.
This is a historic period and a ripe one for shaping the policy decisions that will determine Canada’s path toward a lower-carbon economy. There has never been a more important moment for an engaged public discussion about how to get these policies right for Canada.
Carbon pricing and business competitiveness
Decision-makers will be looking to and listening to their constituents as they make the challenging and critical decisions about how to design carbon-pricing programs that achieve both economic and environmental priorities. That address concerns such as business competitiveness and fairness for families. That coordinate different approaches to carbon pricing across the country cohesively and effectively, while respecting the unique energy mixes and priorities of our diverse provinces.
Over the next #90Days the Ecofiscal Commission will share our research and perspectives to help inform that conversation, and we invite you to join in. We’re launching this dialogue with a little video that explains the core relationship between carbon pricing and business competitiveness. This is one of the key issues that governments across the country will need to consider and address in their policies.
But there are others. How can we ensure that our most vulnerable households are secure in a carbon pricing environment? What should governments do with the revenue generated by these new policies? What role should the federal government play in coordinating diverse provincial policies? These may seem like wonkish questions (and they are), but their answers will shape our economies, our lives, and the inheritance we leave for our children.
#90Days Conversation
So over the next #90Days let’s have a conversation about carbon pricing that matters. Let’s dive in to the wonky details and explore the implications of these decisions. The Ecofiscal Commission is hard at work readying analysis to support this thinking, so stay tuned. We know that other experts and thought-leaders across the country will also have much to contribute and we look forward to hearing and engaging with their ideas.
Governments ultimately will make the calls about how these emerging climate polices are defined, but they will do so with a close ear to the ground. Now is the time to put all of the questions and all of the best thinking on the table.
Pull up a chair. It’s time to talk.
4 comments
Dear Chris Ragan and CEC:
I had the great pleasure of hearing Chris speak at the Redpath Museum science series (Dec 10th) and yesterday I watched “Stuck in Traffic with an Economist”. All the ideas make so much sense that I kept nodding: “of course! just as I thought! I should be an economist!”. Joking aside: yes, let’s put a price on the scarce commodity of road space in rush hour.
I am very concerned about the disappearance of natural spaces around Montreal, which are vanishing so fast that I fear the City will never reach its target of protecting ten percent of its land mass. In several ways, this is relevant to the effort to grow prosperity. For example, in the borough of Pierrefonds/Roxboro, Mayors Coderre and Beis have endorsed a plan to build 5 – 6,000 new residences in the fallow fields quite far from any existing streets or utilities. I perceive this as a way to siphon public wealth towards private gain. Even if the developer pays to build them, the eventual upkeep of streets and utilities for that new neighbourhood will be the responsibility of the municipality and all taxpayers. it would be more ecofiscally responsible to concentrate housing within the existing infrastructure grid.
The ecosystem services now provided by natural areas such as flood control, heat reduction, silence, air purification will be lost ( Gibsons, a small town on BC’s Sunshine Coast, is working on a method for including these assets in their municipal balance sheet).
how many cars will be added to the rush hour traffic going in to Montreal? Ten or fifteen thousand? the development is planned the same old way, which is to say, it assumes all households will depend on cars for all their transportation needs. this is yet another way in which public assets are despoiled for private gain.
what does the Economist Stuck in Traffic say to that?
I noticed that yesterday Alberta was managing to generated almost zero from wind. I can’t imagine why Notley et al imagine installing another 2000 MWs will make much difference. The he Alberta electric System operator website yesterday at 4:45 pm show “zero” wind generation.
I think someone should seriously take a look at whether cutting out coal fired generation or shutting down some oil sands plant would be the better choice for Alberta. Surely reliable, lower cost power would be a great benefit going forward.
Did you ever see the Channel 4 (UK) documentary from 2007 “The Great Global Warming Swindle”. I think you will find it at least interesting, and would like to hear your feedback on it. You can see it on YouTube at: https://www.youtube.com/watch?v=52Mx0_8YEtg
Horns of the dilemmas:
>> If the producer of pollution pays, as he should, to a level that stimulates change, then how to we protect that producer against competition from polluting importers? Perhaps by imposing our carbon tax on imports. Perhaps the COP21 agreement enables an international trade regime that does not consider such a tariff to be a violation of free trade.
>> If the consumer pays, as he should, to a level that stimulates change, then how do we make that tax progressive, as social justice requires? Perhaps by linking the carbon tax system to the income tax system in progressive ways.
>> How do we prevent cap-and-trade from becoming a shell game played by expert accountants and political lobbyists to negative effect? Perhaps by deciding that it can’t be done, and therefore that the approach is not a good one.
>>How can we reduce pollution of all kinds through policy (because CO2 pollution is not the only kind that is killing us) without hurting the wrong people, the people who cannot afford to be hurt, without creating escape routes for the people who can afford it? Perhaps by keeping the control system as simple and transparent as possible, and using the progressive income tax system to its full capacity.
>> How can we supplement these kinds of measures, which attempt to address the problems in ways consistent with contemporary cultures of production, consumption, and finance, with measures to channel those cultures in less polluting directions? Because those cultures are not immutable. They have changed dramatically in our lifetimes, let alone those of the last two or three generations. The more we can do by means of cultural change, the less we will need to rely on price and punitive taxation. By all means tax the externalities, tax them until the pips squeak. But let us have explicit measures also to address the “internalities” of our producers, consumers, finances, and politics.
>>Technology has its place too, particularly technologies that use the sun, the ultimate contemporary source of energy.
I look forward to the 90-day discussion.
Hi Chris,
Let’s keep things simple. And there is nothing simpler than a carbon tax. There are few measurement and auditing complexities. Other systems for “putting a price on carbon” are much more difficult to implement, manage and audit and, perhaps most importantly, for the consuming public to understand.
Walter FCPA.FCA
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