Jan 18,
2017
Seven things I learned while confronting Albertan scepticism
Over the holidays, I flew home to Calgary to visit friends and family, enjoy the mountains, and… talk about carbon pricing. I stepped out of my echo chamber and spoke to dozens of Albertans who are, to say the least, unhappy with the new provincial levy. I honestly underestimated just how deep-rooted the opposition is. Here is what I heard.
Alberta’s carbon levy came into effect January 1, and for many, it’s about as welcome as a June flood. Emissions will cost $20 per tonne in 2017, $30 per tonne in 2018, and ultimately $50 per tonne in 2022 when the federal price overtakes Alberta’s. But as Canada forges ahead, there are many Albertans who feel they have been left behind, or excluded from the conversation altogether.
Many of the Albertans I spoke to were well read and informed on the science of anthropogenic climate change. Others less so. Those who were informed but sceptical of the science, and the alarmism in particular, resent being called climate deniers for simply expressing doubt or calling out hypocrisy. Curiously, no one seemed opposed to the central premise of pricing pollution, but many drew the line at carbon.
Some talks began as engrossing debates but deteriorated into tirades on the NDP’s reckless policies and indifference to working Albertans. Some barbs were reserved for me. Old friends called me an elitist and an out-of-touch bureaucrat; a complete stranger encouraged me to take off my rose-coloured glasses. On my return flight, I was hemmed into my window seat for four hours by a gentleman who insisted I didn’t know what I was talking about because there is no such thing as temperature change and anyway it doesn’t matter because all of the CO2 Canada emits gets blown to the equator.
I set out to listen. And perhaps to offer a different perspective as well.
Lesson number one: It’s hard to get your point across when your original position is misunderstood
During several of my exchanges, I sensed contempt for environmentalism and the “Build Absolutely Nothing Anywhere Near Anyone (BANANA)” cohort in particular. The fiercest adherents to this philosophy are essentially opposed to all new development of any kind. The problem is that in the minds of many carbon tax opponents, “put a price on carbon” and “keep it in the ground” are more or less interchangeable. They condemn the carbon tax guilty by association, rather than on its own objectives or merits. But it’s entirely possible to support resource development and carbon pricing simultaneously.
I have been lumped in with the BANANAs. Just as sceptics have been lumped with the deniers, I suppose. But I don’t believe that a debate around carbon pricing needs to be rooted in ideology. I take Alberta’s economic concerns very seriously, and so does the Ecofiscal Commission. Maybe it’s a cliché at this point, but environment and economy needn’t be mutually exclusive terms. That’s why we’ve argued so vehemently for cost-effectiveness; not all policies that reduce GHGs make sense.
Lesson number two: Collective action problems are a massive challenge
Many Albertans view Canada’s initiative as economic self-immolation given its modest contribution to global emissions. They raised concerns about Canada getting ahead of big players like China, India, and the U.S., particularly in the context of the latter’s incoming administration.
But we’re not as far ahead as you may think. These “Big 3” are responsible for 54 percent of global investment in renewable energy. China will implement pollution pricing in 2018 and is accelerating its shift away from coal. India is moving fast on renewable power. The U.S. may not see a carbon price for a while still, but there are plenty of substitutes already in place. My claims that renewables have become cost competitive with hydrocarbons in many parts of the world weren’t always well received. The normalization of pollution pricing and alternative energy will take time. We’re not quite there yet, but we can’t expect others to act unless we act as well.
Here we have the collective action problem. The benefits of mitigation action are dispersed, but unless everyone acts, the costs become concentrated. Moving first can be risky, no doubt, but it also offers opportunity. Be it by market forces or policy intervention, the world is on its way to decarbonizing. Avoiding the “lock-in” of new carbon-intensive assets will smooth the path to deep emissions cuts and offer us the chance to develop competitive advantages in emerging industries. There is tremendous export potential here, particularly in the service sector. The slow, gradual ramp-up also saves us from 11th hour action where we need to implement a $100/tonne price overnight. Acting now offers a chance to acclimatize and improve our long-term economic position.
Lesson number three: Revenue recycling is more tangible than carbon pricing
From the sceptics we move to the “maybe” camp: those that view greenhouse gas emissions as a market failure requiring a policy response but are unsure of the best approach. Here, I got a sense of general mistrust of government and its ability to implement new, complex policies. Some people are OK with the idea of policy to reduce GHG emissions, but aren’t exactly inspired by previous clean energy and climate policies. There are a few pieces of this story worth unpacking.
First, many of my fellow Albertans perceive the policy as a tool to raise revenue, not one to reduce GHG emissions. I heard the term “extreme bureaucratic overreach” more than once. I had someone ask me “Why not just have a sales tax and be done with it?” The co-mingling of policy intent and politics is inevitable – after all, what government would say no to more revenue?
At the same time, elements of Alberta’s revenue recycling are not unpopular. I was able to persuade some people that the term “Made in Alberta” is more than lip service, that the carbon levy can avoid mistakes of the past. Outside of the well-publicised rebate program, few were aware of output-based allocations (OBAs), energy efficiency education programs, small-business tax cuts, public transit upgrades, support for coal communities, or competitive bidding for renewable energy projects, which will prevent electricity prices from tripling. Someone pointed out that widening the gap between small business and corporate tax rates (which is now 10%) can cause another host of problems. Fair enough.
Everyone in the affirmative camp thought the levy’s revenues were being put to good use. A few in the sceptic camp thought some ideas were worthwhile despite their unease with the central premise. OBAs are a sticking point; they are a difficult concept to explain over a beer.
There’s a fascinating tension here. The revenue-recycling part of the policy, which is secondary, is more popular than the carbon price itself. The price is intended principally as a means of reducing emissions. That’s not coming through, and emphasizing the upsides of revenue might actually make it more confusing.
Lesson number four: Different audiences need different arguments
Average Albertans are worried about impacts on their day-to-day expenses. Gas, food and heat all cost a little more, true, but household rebates can more than offset these costs for a middle class family, particularly if they make a few adjustments to their habits. Maybe this argument is more tangible and compelling than an ad campaign about diversification or shifting to a green economy, especially if someone’s job is in a sector these policies are designed to guide us away from.
The business community is worried about competitiveness. This is a legitimate concern for Alberta, which has a large number of emissions-intense, trade-exposed sectors. But competitiveness can be addressed with good policy. OBAs will go a long way here. It’s unfortunate that the very thing that makes them such an effective tool – complexity – is also what makes them so difficult to explain.
Everyone’s worried about jobs. The most common complaint I heard was the levy’s poor timing given Alberta’s new economic reality. Even those who believed the levy worthwhile still thought it an odd priority for a province that is struggling worse than it has in decades. There is plenty of concern that businesses could use the levy as a pretext to further layoffs or close up shop and relocate to Saskatchewan. But Alberta’s initiative on carbon pricing has already earned it goodwill, and will help soften bumps in the road. Better to get a jump now, willingly.
The big picture may sway decision-makers. Working families need something more. What I really wanted to make clear was that the carbon levy is not meant to punish; it’s meant to shift incentives and encourage responsible energy use. It does not have to burden ordinary Albertans.
Lesson number five: Small areas of agreement might be starting points for more
Everyone I met could agree that the impacts of extreme weather have arrived. Or maybe they were here all along. Either way, the lack of attention that climate adaptation receives from international treaties, our political leaders and the media does a disservice to the fight against climate change. Smart, high-visibility adaptation policy can absolutely help boost the credibility of mitigation policy.
Adaptation isn’t as sexy, but it’s an easier sell. Efforts on climate resilience are stories worth telling. Canada has already done a significant amount of work on adaptation, and it has been a priority for some time. Half of the UN’s Green Climate Fund, by far the largest multilateral climate change fund in history, is earmarked for adaptation. This caught some sceptics by surprise. Here, we had something we could agree on.
Lesson number six: Climate science is still hard conversation…
Not all of my peers thought anthropogenic climate change is serious enough to warrant policy intervention. As one gentleman put it, “Humans can affect the climate, the same way I affect ocean levels if I pee in the Pacific.” The notions that climate scientists can accurately model sea level rise, ocean currents, or the difference between 1.5 and 2.5 degrees of warming in the year 2100 were met with incredulity. I heard references to the slowdown and other possible anomalies, and the suggestion that mainstream science has overstated the problem for self-serving purposes. After all, climatologists were pretty sure we were heading for a global cooling not so long ago.
All told, there were many legitimate concerns that deserved serious answers. Here we have our great schism. If you don’t believe climate change to be a serious issue, carbon pricing becomes meritless. But even if you don’t buy the greenhouse effect, the scale of humanity’s activity, or that our by-products meaningfully impact global temperatures, carbon is still a pollutant. Emissions-intensive activities impact our health, acidify our oceans and disrupt a variety of natural processes. The size of the problem is disputable; the nature of the problem shouldn’t be.
Lesson number seven: …and listening is (at least) half of a good conversation
Overall, I was left a little frustrated by these discussions. Albertan opposition to climate policy runs deep and in many corners. How can we improve conversations about policies to which people have such visceral reactions? I wanted to talk about efficiency and policy design trade-offs, but realized this issue is more emotionally charged than most. It cannot be decoupled from larger political issues. Articulating the nuances of revenue recycling and marginal abatement cost curves is a difficult task in this type of environment. Discussing the science is worse. And climate change has become so entangled with political ideology that it’s easy to lose focus.
It strikes me that the biggest barrier to persuasion is a serious communication problem for both the policies and the science informing them. “The science is settled” is a phrase we should move away from. As there are countless smaller but very serious issues in dispute, perhaps it is more accurate to say we mean this and this, not this. Future climate policy should be based on the best available data, and it should always be amenable to improvement.
So how do we improve these conversations? Maybe it starts with taking those who disagree with you seriously and showing some humility. Common ground might just follow.
11 comments
Interesting read. I think the author came close to identifying the issue with this paragraph:
“Here we have our great schism. If you don’t believe climate change to be a serious issue, carbon pricing becomes meritless. But even if you don’t buy the greenhouse effect, the scale of humanity’s activity, or that our by-products meaningfully impact global temperatures, carbon is still a pollutant.”
The problem is that the author returns to talking about trying to persuade people about climate change. Let’s move the conversation away from climate change completely. Take a photo of downtown Calgary during the winter when there’s an inversion and the skyline is brown from pollution. Let’s talk about carbon pricing in the context of eliminating those types of days in Calgary and suddenly what China is or isn’t doing or whether man is or isn’t influencing climate change no longer matters.
The problem I find is that in terms of environmental policy people seem to have a belief that promoting climate change as a global threat will spur people to action. Instead it allows people to place the responsibility for change on others around the globe. The way to spur people to action is to make the issue a local issue, independent of global events. Talk about how improved environmental policies will have a positive impact on the lives of the individual and their families…. Essentially adopt the strategy of the acid rain and recycling movements of the 80s/90s.
Removing the debate about climate change from the conversation completely will allow the author to accomplish their goal of shifting the conversation to policy.
Brendan, you were in the east far too long. Your learned very little with your visit back home. Had you not been brain washed so badly you would understand that ‘Carbon Tax’ and ‘Leave it in the ground’ ARE interchangeable and you would not have wasted your time carrying on any further with your long winded, pointless arguments.
Considering the above, how can you make sense of T2’s statement that the NDP’s policies are the reason that Kinder Morgan’s pipeline was approved.
Hi Yvon,
Thanks for your reply and for offering me the opportunity to elaborate on this point.
Carbon pricing does not care how emissions are lowered or where these reductions come from. It does not say “Keep it in the ground.” It says “Take it out of the ground more efficiently,” the same way a deposit on a pop can says “Recycle me” and not “Don’t buy me.” With carbon pricing, it is entirely possible to develop conventional energy resources and still reduce your emissions. The mitigation would simply come from other sectors.
>>>> These are my questions an comments regarding Chris’ myth article.
Ontario’s cap-and-trade system is now in force and is the focus of much debate. Amidst all of the discussion, there is plenty of rhetoric, hyperbole, and questionable statements. Some of these have grown into large and scary myths which need to be debunked.
The first myth is that the cap-and-trade system will significantly raise the already-high electricity costs for families and businesses. It is true that Ontario’s electricity prices are higher than elsewhere in Canada, and it is also true that much of this has been driven by costly policy decisions from the past — including policies that provide massive subsidies to intermittent renewable power sources.
But Ontario’s electricity system is now mostly carbon free — the province relies on natural gas for only about 10 per cent of its total electricity production. As a result, the cap-and-trade system, which puts a price on carbon emissions, should add very little to electricity costs.
>>>> I did not realize that the high (and rising) cost of electricity would be affected by C&T was a myth or even a concern for most.
>>>> We can all agree that Ontario has completely dropped the ball on the electricity file that has resulted in outrageous prices.
The second myth is that carbon pricing will seriously damage the competitiveness of Ontario’s businesses. The policy would indeed be a major mistake if the province’s firms responded by simply moving their operations to other jurisdictions with lower (or no) carbon prices. However, research by Canada’s Ecofiscal Commission (which I chair) shows that only a very small fraction of the economy — less than 2 per cent of provincial GDP — is seriously exposed to this risk.
>>>> Ontario GDP in 2015 was 726 Billion dollars. At a conservative 1.5 percent of the economy that is “seriously exposed” to the risk of departure, that works out to 11 billion dollars. At what level of departure do you feel the tipping point to “major mistake” would be.
>>>> “Less than 2%” sounds like one thing … Eleven billion dollars sounds like something else entirely.
>>>> Also, in your research, what is the percentage of the next group (moderately exposed to departure)?
But what about the firms that are in this category, Ontario’s “large GHG emitters”? Won’t the carbon price spell the end of these businesses? The answer is no. An important part of Ontario’s cap-and-trade system is that “emissions intensive” firms will receive some of their required emissions permits for free, in an amount that depends on their output. These free permits have real cash value, which goes straight to the recipients’ bottom lines, offsetting much of the impact on their competitiveness.
This brings us to the third myth, that giving these permits to businesses undermines the carbon-pricing policy. This popular argument misses the crucial point of any carbon price. The objective of the policy isn’t to reduce total business profits — it is to raise specific prices so that firms change their business practices in a way that reduces their carbon emissions. The combination of the carbon price and the free permits gives businesses a clear incentive to reduce their GHG emissions by changing their operations but not by shrinking their economic activity.
>>>> Just because the stated objective of the policy is to raise prices on carbon, doesn’t mean businesses will not view it as a reduction in total business profit, at least in the short/medium term.
The fourth myth is probably the biggest one of all — that a carbon price will not succeed in reducing GHG emissions. As consumers we know that we respond to higher prices by adjusting our purchases. Each household will react differently. Some will choose a more fuel-efficient vehicle, while others change the way they heat their homes or decide to insulate their basements or choose to have more staycations.
>>>> Of course a price on carbon will reduce GHG emissions … the real question becomes, is the financial/economic impact (whatever that is) on Ontario and her citizens in reasonable proportion to the practical, overall reduction of Global ( or Canada’s … or even Ontario’s ) GHG emisions?
>>>> You and I are both old enough to remember “energy crises” of the past … Individual Canadians are well aware of practical energy saving methods and have been implementing them for years and continue to seek them out. Do we really need another “awareness campaign” with a price tag?
>>>> Staycations ?? These are for people that want to, but can’t afford to go on vacation … do you really want more people that can’t afford a vacation to .. oh, I don’t know, France or Italy because of C&Ts negative impacts?
For businesses, higher carbon-related costs will lead them to switch to cheaper inputs, some of which will only be developed in response to the demand induced by the carbon price. They will also have the incentive to develop lower-emitting ways of making their products or delivering their services. But each business has the flexibility to figure out how best it can adjust to the carbon price.
>>>> What are cheaper inputs and how do you know that businesses will, or even have the ability (due to critical processes involved) to either switch to or develop new ones?
Such a large collection of small responses to price movements is what makes our market economy tick; it is the essence of Adam Smith’s age-old arguments about how market prices provide order for a complex social system. It is also why a carbon price — as opposed to intrusive and prescriptive government regulations — is such an efficient approach to reducing GHG emissions.
>>>> Exactly how is imposing C&T different from “intrusive and prescriptive government regulation” ?
There is plenty of research from Canada and around the world showing that carbon prices actually do reduce GHG emissions. But nobody should expect dramatic results right away. It takes a while for households and businesses to adjust to new prices in the marketplace. Their responses will gradually occur, and emissions will gradually fall, especially as the carbon price rises over time.
Ontario’s new cap-and-trade system is designed to reduce GHG emissions while protecting the competitiveness of the business sector. There will no doubt be some growing pains in the first few years, and policy adjustments in response. This is to be expected. But we shouldn’t let the scary myths get in the way of the facts.
>>>> Given the ” …costly policy decisions from the past …”, do you seriously believe that ANY Government (especially Ontario over the last 30 years) has the capacity to implement and manage a complicated, long term C&T scheme without political agendas rendering it a complete failure both economically and environmentally?
>>>> Here’s the critical point …
>>>> The fact that you have to debunk myths in the national press is a clear indicator that C&T does not enjoy popular support … it doesn’t matter why, it just doesn’t.
>>>> It has been implemented anyway and will be the downfall of those who have forced it on an unwilling / unready electorate.
>>>> Others will campaign on a platform to have C&T altered, or even repealed (and will win) and what will we have … more GHG emissions.
>>>> Look, GHG emissions are no joke but, C&T is simply not a viable approach and would urge you to reconsider your support for it.
Thank you for your efforts. This is a very good overview of the reactions from Albertans and your thoughts to overcome the negative and misinformed opinions.
My question: I too was not aware of the output-based allocations (OBAs). Can you explain this to me via a response or give me a link so I can explore what this means and how it works.
As for BANANA, I am a professional and I have been researching the science and merits of both the Enbridge and Kinder Morgan pipeline proposals in BC for 2+ years. I have participated in the NEB process. It is very frustrating when this and other terms are applied to folks with legitimate concerns in opposition. I invite you to read my short blog on my experiences and why there appears to be so much opposition.
https://oldmanblogger.wordpress.com/2016/06/02/say-no-to-everything-absolutely-if-it-is-based-upon-flawed-processses-and-faulty-science/
I enjoy the newsletters and find them very informative.
Regards
Ken Bennett
Hello. I was one of those who had a “visceral” response. I was so vocal that my wife said I needed to be better informed and until I was she just wan’t going to listen to me anymore. So I have become much more educated on carbon pricing. I can see that a higher price on something will alter (after a time) peoples activity and choices. Initially I had no idea what “carbon pricing” was and just saw it as another way for the government to pick my pocket. So that may be one of the communication barriers you face. Most people just don’t know what it is or maybe have a vague idea or a completely misguided idea of the reason for the higher prices they will be paying. That will be a challenge for policy makers. Of course you completely understand the whole concept because you live it but the average Joe only sees one more way that his paycheck will be lighter. They may want to help the environment but not at the cost of the lifestyle they have worked so hard to achieve. The transition will be volatile but if people better understood the reason it may be an easier pill to swallow. Most will not be bothered or have the time to engage themselves in study to be better educated regarding the carbon pricing ( or have a wife like mine). Somehow you have to get to those folks. It will not be an easy job. So do I like it ? No . Do I understand the reasons now? Yes. Like it or not carbon pricing will be forced on the public for their own good. They just don’t know that it is for their own good. That will be your challenge. I wish you luck.
Hello James,
Thank you very much for taking the time to reply. You are absolutely correct; it is a real challenge to communicate the objectives of carbon pricing to the public. It is a signal to consumers, not necessarily a revenue tool, and that distinction is sometimes unclear. The fact that your views have shifted after doing your own research is very encouraging. I’m happy to talk carbon pricing with anyone who will humour me, but I think those who are still on the fence may find converted skeptics like you to be the most persuasive.
Fascinating……..? Not really. You don’t seem to understand the major issue with “Carbon Pricing”. If your biggest fear is Green house Gas Emissions and you believe that the fastest way to reduce them is a price on carbon, fair enough. I, and most Albertans by the way, believe that every cent that is collected….should go to reducing those Emissions. Just as soon as you start talking about rebates for lower income people or, like the Federal Liberals, 90% of the population will get money back. Or, you can buy Carbon Offsets from Jamaica….You lose! It’s dumb and it’s a travesty.
Why is this so complicated? Why are you guys being such weasels about it? The threat is GHG Emissions, why wont you just talk about that and not Free government money? Sad!
Hi Dan,
Reasonable people can disagree about how to recycle the revenues from carbon pricing. But the truth is that it will make energy more expensive for those least able to afford it. It only takes a fraction of the revenues from carbon pricing (about 12%) to offset these costs for lower-income households. If you’re okay with carbon pricing being a regressive policy, there’s also the argument that we all own the air, so people who pollute the air should provide compensation. You can read more about that idea here if you’d like. As for your preferred approach, provinces that have designed their own carbon pricing systems (BC, QC, AB) are indeed using some of the revenues to drive additional emissions reductions. The federal backstop can’t do that, because the federal government has promised to return the revenues to the province they were collected from.
I agree we have climate change. What I want to know is how to save costs. The more I & everyone else reduces usage the more the energy company has to increase prices on fees to keep there profit margin. I understand this, I’m just tired of government & environmentalists telling me to reduce to save money. Not gonna happen. If Alberta or Federal government are giving us all the money back why are they collecting it. If they are only giving a percentage, what is the percentage? We have had the carbon tax for over a year but I have yet to see an accounting of where all the carbon tax money has gone. Yes I would like particulars on every dime. It is our money. Governments don’t have money. And I of course have a massive problem with the federal government collecting GST on top of carbon tax. Talk about getting your cake & eating it too Thanks for allowing me to rant
Hi Carol,
Some very good questions in there. As far as the rebates go, the federal government will return an average of 89% directly to households in Ontario, Manitoba, Saskatchewan and New Brunswick (the rest goes to businesses and non-profits). Alberta rebates about 30% of its revenues. It varies in other provinces. The point of a carbon tax is to make it more expensive to emit greenhouse gases; the point of the rebate is to not make life more expensive overall. As far as where the money goes, that’s all public information, freely available. I am compiling all of that information into a blog that should be out soon. The way you described the economics of energy supply isn’t quite correct, but also very complicated. Power companies, for example, can’t simply pass on their costs in many cases, and there’s always an incentive to produce power more cheaply.
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