When a deal isn’t a deal

You might have never before heard a national leader declare a trade deal done, or a peace pact achieved while the signatories are still squabbling over the terms, but when it comes to climate policy those normal realities apparently don’t apply. There was Prime Minister Justin Trudeau late Friday, flanked by the premiers, announcing that they had “developed a framework” of a climate plan. This, while Saskatchewan’s premier stated he was adamantly opposed to its most fundamental terms, Manitoba’s premier said he wouldn’t accept the conditions, and B.C.’s premier, Christy Clark, after first saying she wouldn’t sign, agreeing only with the proviso that the federal model for annual national carbon-tax hikes, which underpins the entire framework, might never unfold as planned.

The prime minister resorted to a mushy porridge of twee to describe the framework to cover for its severe defectiveness, pronouncing that he and the premiers had done “what Canadians expected of us, and of themselves, to do all we can to make our world better for our children and grandchildren.” Trudeau was determined to come up with something he could call a plan to avoid becoming the fourth prime minister to commit to emission targets without actually having a way to meet them. Perhaps he considers it progress that, instead of no plan, he now has a weak plan complete with exit clauses and lacking the full support of the provinces it relies on. Federal discussions with the provinces also revealed that meeting the targets could anyway all come down to Ottawa buying its way with carbon “offset” permits from other countries when emission levels fail to reach targets agreed to in the Paris UN climate talks. Put it all together and it’s clear that the Liberals are so desperate to fudge their way to carbon controls that they’ll rebrand disagreements as agreements and spend whatever they must to say they’ve met UN targets that, as those previous governments discovered, are just too economically destructive to reach.

If this is progress, Friday’s non-deal likely also started a new phase of Canadian climate battles, this one pitting the federal Liberals against taxpayers, Trudeau against the premiers, and the premiers against one another. Clark’s opposition to the forced march of carbon taxes toward $50 a tonne in 2020 was just the first shot in the coming war between provinces favouring cap-and-trade versus those favouring carbon prices. As Peter Shawn Taylor outlined in FP Comment last week, by 2022 Quebec and Ontario will be buying their way out of carbon reductions by picking up permits from California at roughly half the price that B.C. and Alberta will pay to meet the federally mandated carbon tax. Clark relented only after the feds agreed to review, before taxes rose above B.C.’s $30 a tonne, whether all provinces were paying enough. That means either the tax won’t rise as planned, or Ottawa will face forcing its way into Quebec’s provincial tax jurisdiction, a great way of rekindling those cooled nationalist clashes.

Manitoba, which backed Clark’s concerns, is tying its agreement to more health-care transfers. Between the province’s arm-twisting for more federal handouts, and the wholesale spending of Canadian tax money on carbon permits from California, or Europe, or maybe China, Trudeau’s climate plan costs are already mounting, and the tax hasn’t even kicked in yet.

Whether they’ll ever kick in remains a matter of debate, at least as far as Saskatchewan’s premier Brad Wall is concerned. He’s adamantly opposed to complying with federal carbon-tax commands, noting that his province’s reliance on carbon-heavy agriculture and resources leaves it more vulnerable than most to a tax’s economic damage; it can hardly afford any more given the thumping Saskatchewan industry and employment have already suffered from the global commodity downturn. (Jason Kenney, who might well be Alberta’s premier in 2019, is raring to join Wall in the fight.)

Quebec and Ontario are set to pick up foreign carbon permits so cheaply because prices are diving everywhere. European permits, which once sold for over eight euros, can now be picked up for half that (about $6.00 Canadian). Permit auctions in California this year made headlines after shocking collapses, as that state continues to shower free permits on major emitters while also allowing them the freedom to swap power contracts, relocating emissions to neighbouring states, but only on paper. The fact that the entire California cap-and-trade system is still facing a serious challenge to its legality isn’t helping.

China’s plan to set up its own carbon-permit marketplace, meanwhile, is certain to only worsen the fraud, manipulation and gaming of a global-trading scheme that Interpol has called “particularly susceptible to crimes that would typically be incapable of penetrating other commodity markets.” That, of course, is because carbon permits don’t actually represent a physical commodity; under the UN’s REDD program (for Reducing Emissions from Deforestation and Forest Degradation), they’re supposed to represent carbon sinks from forests that owners promise not to cut down, which they might not have done anyway, and which could still burn or be razed someday nonetheless. So, they don’t actually reduce carbon emissions in any real way, yet these meaningless agreements are what Canadians would end up buying to merely appear more carbon-friendly. But then, judging by Friday’s climate-framework non-deal, meaningless agreements are quickly becoming the very framework of Liberal carbon policy.

FRIDAY’S NON-AGREEMENT LIKELY STARTED A NEW PHASE OF CANADIAN CLIMATE BATTLES.