Clark's Carbon Pause Passes the Buck

Christie Clark’s climate plan buys time, not leadership. The government’s advisory panel recommended to increase the tax $10/tonne every year from 2018-2050, but the Premier hit pause. Clark passed the buck to the federal government, who would have to handle any fallout from a possibly unpopular tax decision.

In her comments on The House, Clark placed the blame on other province’s inaction. She stated that industries will move to other provinces without a carbon tax, where the cost of doing business is lower. In the climate world, this is known as carbon leakage. Emissions are not reduced, just moved elsewhere.

This underestimates the immobility of some large emitters. Some industries are place-based such as mines, oilsands facilities, or agriculture. Other industries have large set up costs. An incremental increase in a carbon tax would not be far less than the costs of dismantling in one place and setting up in another.

Instead, the plan relies on forests. Forests soak up carbon dioxide, but emit it when they are cut or burnt down. This province faces wildfires every year; the forest industry is still recovering from the pine beetle. It is not the time to rely on the forest sector to meet climate goals. It is creative carbon accounting, hoping to soak up the carbon spill into the air, rather than plug the source.

As Maclean’s surveyed the national situation: BC’s carbon tax is $30/tonne, a figure Alberta won’t approach until 2018. The cap and trade system used by Quebec, and soon Ontario, currently values carbon around $16/tonne (Maclean’s fails to mention that the price under a cap and trade system is set by the market and can change more quickly). All this to conclude, aptly, “The objective of a coherent national climate change policy should be a single, consistent price across the entire country.”

The assessment is correct. A single, consistent price provides regulatory certainty for industries and provinces. Whether your business is farming or cement, in BC or Newfoundland, you know the cost of doing business. Provincial leaders don’t need to worry about a carbon tax becoming an election issue. Canada’s climate policy is a patchwork quilt, mirroring the global picture of carbon markets.

The Canadian story of policy experimentation underlines the need for leadership. We are a (very) federal country; provinces control several (now) important portfolios. Equalization payment further support experimentation, providing provinces the funding to try new things. This equation of federalism plus equalization loomed in the background of the health care experiment in Saskatchewan. The last element is leadership. Without vision to reframe the debate about what government should do, and what goods we should (or in the climate case, should not) value, policy experiments never begin or grow.

Clark chose safe.  Now decision in federal hands, in cooperation with the provinces. Clark could have continued to show that economic growth can decouple from carbon emissions. That climate action is not only possible but popular.  Instead, she limped in with a soft plan before an election. This are not the things that leadership is made of. It will not secure us a consistent, cross-country carbon price.  The Prime Minister needs leaders, he is finding few.

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