Rising rhetoric over carbon pricing is really just a bit of political posturing

The current peeing match between Premier Brad Wall and the Trudeau government (with David Suzuki joining in for good measure) over carbon pricing is entirely predictable, largely political and completely overblown.

Last week, Environment Minister Catherine McKenna got the ball rolling, saying provinces that haven’t or won’t come up with a carbon pricing scheme — be it a carbon tax, cap and trade system or carbon emissions regulatory regime — could have one imposed upon by them by Ottawa. It’s a little like the teacher threatening failing grades to any student who doesn’t have their assignment in on time.

Not wanting to be treated like an errant schoolboy, Wall responded with his own brand of schoolyard banter. “It’s not the collaborative approach that the prime minister promised when he was elected,’’ Wall told reporters.

Ratcheting up the rhetoric, Wall told CTV that if carbon pricing means “some sort of a universal price that will ... manifest itself as a tax, and be disproportionately impacting the energy sector, which is already reeling, then we have a big problem in Saskatchewan with that kind of unilateral action.’’

And when the octogenarian environmentalist Suzuki, who was visiting Saskatchewan, accused Wall of being a “climate change denier,’’ Wall came a little unhinged. “I believe in climate change. But I guess I am a denier. I’m a climate tax denier. I deny the fallacy that a new tax on Canadians, whose CO2 emissions are 1.6 per cent of the global emissions, is the best way for Canada to help fight climate change.”

Wall’s flight of rhetorical fancy certainly had social media buzzing. But was there method in the premier’s madness?

And, as it turns out, Wall has some support from a couple of economists from Western Canada. Mark Jaccard of Simon Fraser University in B.C., says current carbon taxes are too low to achieve Canada’s climate change targets of reducing greenhouse gas (GHG) emissions 30 per cent below 2005 levels by 2030 agreed to at last year’s Paris climate summit. He notes that B.C.’s $30 per tonne carbon tax is frozen and Alberta has no plans to go beyond that level.

But for carbon taxes to be effective, they need to be at $200 per tonne, something that would cause rioting in the streets and presumably governments to fall.

Instead, Jaccard argues, government should reduce or put a cap on GHG emissions through regulation, which could restrict emissions from coal-fired generating stations or phase them out (actually, we already have that), force trucks and buses to use biodiesel, and require car manufacturers to put more zeroemissions vehicles on the road.

Like carbon taxes, regulations would result in higher costs for consumers, causing gasoline prices to rise to $1.70 per litre from $1 per litre today, increasing electricity rates by 18 per cent in provinces that use coal-fired generation, like Saskatchewan, and increase the cost of producing a barrel of oilsands oil by about $10. But these cost increases would be hidden in the price of our energy, not standing out there for all to see, like carbon taxes, Jaccard said.

Closer to home, economist Peter Phillips of the University of Saskatchewan and Johnson-Shoyama Graduate School of Public Policy had a similar warning for any politician who might contemplate imposing a carbon tax on an energy-intensive economy, like Saskatchewan’s, where most of our GHG emissions (highest per capita in Canada) come from the oil and gas, agriculture and electricity sectors. The problem is Saskatchewan exports most of its production, whether it’s energy or food. In such an export-oriented economy, how do you get your customers, who live in some foreign country, to pay your carbon tax? The answer is, with great difficulty, if at all.

Phillips says similar problems exist with cap and trade systems and implicit carbon pricing schemes, like mandating the use of renewable energy sources and reducing GHG emissions through investment in technology. But Phillips said that doesn’t mean we can’t sit around a table and try to reach our climate change goals, using whatever tools work best for our province. After all, he said: “We all have the same goal.’’

In fact, isn’t that what Wall said? In other words, let’s not panic about carbon pricing at this point. There’s plenty of time for that later.