Canada’s carbon-pricing policy is not a climate-change action plan

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Photo: Noya Fields/Flickr

One of the issues that will be debated in the next federal election campaign in Canada will be the pros and cons of carbon pricing, to the satisfaction of Liberals and Conservatives and at the expense of the environment. 

The Trudeau administration has decided to impose a carbon tax on provinces for which there is no current price on carbon. This is the only significant pillar of the federal government’s climate-change action plan. There is just a sprinkling of other smaller measures.

Having a single stand-alone carbon price strategy is a bit like saying the way to raise a child is to buy the child a winter coat -- and that is it. This doesn’t work. The findings of 2016 studies of 16 carbon price countries and two Canadian provinces indicated the carbon emission intensity and energy use affected by the price of carbon is less than one per cent. 

This single formula is overwhelmingly outweighed by the US$46 billion in direct and indirect subsidies for the oil gas and coal sectors in Canada each year, as per the estimates of the International Monetary Fund.

Ideally, a green economy can be defined as one where economic development and sustainable development are the same. Hence, it is not a question of new government funding, but rather of redirecting existing funds.

And the redirecting of government financing activities to the green economy would include the stimulation of innovation and manufacturing of clean techs, essential for Canada to participate in one of the world’s fastest growing, high and well-paying job creation clusters, the green sectors. For the same government investment unit, financing of green sectors delivers six to eight times more jobs than the resource-economy sectors.  But, Justin Trudeau’s vision of Canada remains that of a resource economy.

Federal Liberals and Conservatives would like the price on carbon to be a ballot question in the upcoming 2019 election. This would distract from having a serious public discussion on what needs to be done to make Canada competitive in the emerging new green economy and take seriously the recent report of the Intergovernmental Panel on Climate Change, to the effect that we only have until 2030 to adopt actions to avoid catastrophic climate change

With current policies in place, Canada is certain to fail on its target of reducing emissions by 30 per cent by 2030.

We do not need to re-invent the wheel

Transportation, heating and industry account for two-thirds of global energy needs. To date, buildings and transportation have not been major vectors in the transition to a green economy, but this is about to change, thanks largely to the actions of the governments of China, the European Union and California.

With 60 per cent of global oil consumption associated with transportation, China wisely has set sales/credits quotas on plug-in vehicles beginning in 2019 at 10 per cent, increasing them to 12 per cent in 2020 and 20 per cent in 2025. The nature of the sales/credit quotas go beyond sales numbers, because extra credits are given for battery-electric and fuel cell vehicles. And non-compliance will come with penalties, with the government reserving the right to shut down a manufacturer’s production.

Few automakers can mess with China. The country represents 40 per cent of Volkswagen’s and 50 per cent of BMW’s global sales. Accordingly, nearly all global automakers are developing models, and preparing to offer sufficient volumes of these models for the Chinese market in order to comply with these sales/credits requirements. 

Prepared for its self-created rapid vehicle revolution, there were 214,000 charging stations installed in China as of the end of 2017, and the country expects to have 500,000 charging points by 2020. The aim is to have a 1-to-1 ratio of electric vehicles and charging stations by 2020, when 5 million electric vehicles are expected to be on China’s roads .

Similarly aggressive, the EU has not only stiffened its corporate average emissions exigencies as of 2018, but also, beginning in 2020, it will impose fines for each vehicle sold by an automaker that doesn’t adhere to its fleet average emission standards -- standards that will incrementally become more stringent. By 2021, the EU emission standards will necessitate that electric vehicles are very present in each manufacturer’s sales lineup.

Three studies indicate that even a modest market penetration of electric vehicles will hasten the arrival of peak oil demand, when petroleum demand peaks followed by a decline.

As for buildings, they account for 30 per cent of China’s greenhouse gases. China has partnered with the World Green Building Council to set a standard for near zero emission buildings beginning immediately, in 2018.   

California is not far behind with goals that all new residential buildings be carbon-net-zero buildings as of 2020, with the target for commercial buildings set for 2030.

All things on the green economy being interrelated, California adopted legislation requiring all new buildings and parking lots have the wiring and control panel infrastructure in place to accommodate charging stations.

The EU recently approved similar regulations that all new and renovated homes and apartments must have charging stations in place beginning in 2019.

The myriad of measures adopted in China will be accompanied by the world’s largest cap and trade system as part of a five-year plan leading up to 2020 that will ultimately include energy consumption and emissions intensity stipulations, plus 39,000 inspectors.

These are but a few examples of the hundreds of measures adopted by China, European countries and California, recognizing a price on carbon alone is not effective.

While China, the EU and California have hundreds of complementary initiatives to accelerate the transition to a green economy -- aggressive policies, legislation, programs incentives/disincentives etc. -- Canada has only one major policy on climate change.

But in Canada, we can’t even get the stand-alone policy on carbon pricing right. A case in point, the federal government will exempt the New Brunswick Belledune coal-fired plant for its first 800 tonnes of annual emissions. Since the plant emits 838 tonnes annually, the cost per tonne will be less than $1.

Will Dubitsky formerly worked for the Government of Canada on green economy policies, legislation, programs, projects and other related activities. Since retirement in 2012, he has become a green economy blogger and is active in various environmental causes.

Photo: Noya Fields/Flickr

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