SUDBURY – On Monday Premier Wynne announced that Ontario will be signing a cap and trade deal with Quebec. Today, most of Canada’s provincial premiers will meet in Quebec City at the invitation of Quebec’s Phillippe Couillard to discuss climate change and a national energy strategy. It should be noted that the premiers of B.C, Nova Scotia, and Alberta are not attending the Premier’s climate and energy meeting.
On Saturday, April 11, 2015 over 25,000 people marched in the streets of Quebec City to
demand climate action. Canada is a climate laggard. Canada is only 8% of the way towards meeting our greenhouse gas emissions targets. Much of our emissions reductions are because of provincial initiatives, and there is no coordinated effort between the provinces. Canada failed to submit our plan for carbon reductions to the UNFCCC due March 31, 2015. However, the federal government has announced that it will reveal its climate plan June 7, 2015.
On April 7, 2015 Canada’s Ecofiscal Commission released a report called “The Way
Forward”. Their study compared the economic impact, as measured by growth in gross
domestic product (GDP), there would be in 2020 if regulation or market-based carbon pricing were used to manage carbon pollution and we were to meet our current GHG reduction targets.
The market-based carbon pricing mechanism could be either a well-designed cap and trade or an efficient carbon fee (a.k.a. tax or levy).
Canada’s Ecofiscal data revealed the following: GDP in 2020 is approximately 3.8% better under carbon pricing than it is under a regulatory approach, which currently is PM Harper’s plan for Canada. The gain in GDP breaks down as follows: 0.4% from provinces linking their carbon pricing systems; 0.9% from recycling revenue through income tax reductions; and 2.5% from the flexibility of carbon pricing.
One possible problem facing provinces is that with carbon pricing no sub national government can implement border tax adjustments to prevent industries from picking up and going to places with a weak or non-existent carbon pricing policy. Thus, to keep the agricultural and manufacturing sectors competitive, the federal government must ultimately step in and coordinate a national energy strategy.
On March 2015, Sustainable Canada Dialogues, a consortium of 70 academics released a
paper “Acting on Climate Change: Solutions from Canadian Scholars”. They called for a
national carbon price. Canadians want a national climate and energy plan too. In a July 2013, Harris-Decima Poll, 87% of Canadians agreed with this statement: “We need a Canadian climate and energy strategy to plan our nation’s energy future.”
Grassroots support is essential for any long term political will for a carbon pricing policy. Citizens’ Climate Lobby volunteers in Nova Scotia and Ontario attended round table discussions conducted by their provincial governments in January through March. Our volunteers who attended the round table discussions reported that citizens did not champion cap and trade, but instead discussed at length and with enthusiasm carbon fee and dividend and other types of carbon taxes. There was very little support for cap and trade online at the Ministry of Ontario’s Environment and Climate Change (MOECC) website. This should not be surprising, because compared to cap and trade, carbon fees are far more transparent and will be much less expensive for the taxpayer compared to cap and trade. As well, the Ontario government specifically wanted feedback from First Nation, and CCL shared NO to CO2 Colonialism: a report from an international umbrella group for First Nations environmental groups that called the carbon markets a false solution. Less than two weeks after these consultations with the people of Ontario, the Wynne government announced the cap and trade agreement with Quebec.
Finally, we cannot forget our biggest trading partner, the United States of America, when thinking about a carbon pricing policy as Canada and the USA’s energy systems are de facto linked. Congress has repeatedly rejected cap and trade. If we are to encourage the USA to move forward with a carbon pricing policy and ultimately synchronize our carbon pricing policies, a system closer to BC’s revenue neutral carbon fee not cap and trade is the best choice. BC’s carbon fee has been shown to be effective, has grassroots support and would be easier synchronize globally.
“Cap and trade between Quebec and Ontario is a step in the right direction, as the data from Canada’s Ecofiscal Commission made it abundantly clear: market-based mechanisms are superior to regulation. And when market-based carbon pricinmechanisms are provincially-linked and revenue-neutral they are even better for growing the economy. In the long term the federal government must step in and coordinate a national carbon pricing policy.
Most importantly, Canada’s final carbon pricing policy must have grassroots support
and it must empower our biggest trading partner the USA to adopt a market-based
carbon pricing policy.” Cathy Orlando, Canadian Manager of Citizens’ Climate Lobby
In conclusion, cap and trade between Ontario and Quebec is a good first step and
should be celebrated. In the long game, where political will and global synchronization must be borne in mind, a national and revenue neutral carbon fee is the better choice for Canada
Christine Penner Polle