Lib­er­als told $300 per tonne tax needed

But tax­a­tion just one way to cut emis­sions

National Post (National Edition) - - CANADA - MARIE-DANIELLE SMITH

OT­TAWA • En­vi­ron­ment Canada told Cather­ine McKenna early in her man­date as the min­is­ter of the depart­ment that a price on car­bon would have to go as high as $300-per-tonne in 2050 for Canada to meet its cli­mate tar­gets, a se­cret brief­ing doc­u­ment shows.

The doc­u­ment ob­tained by the Na­tional Post, signed off on by the depart­ment’s deputy min­is­ter, out­lined car­bon pric­ing op­tions for the nascent Lib­eral gov­ern­ment in Novem­ber 2015. The Con­ser­va­tive party ob­tained the doc­u­ment with an ac­cess-to-in­for­ma­tion re­quest.

To achieve 30 per cent re­duc­tions from 2005 emis­sions lev­els by 2030 — the tar­get set by Stephen Harper’s Con­ser­va­tive gov­ern­ment and main­tained by the Trudeau Lib­er­als — a price of $100-per-tonne would need to be in place by 2020.

Based on ex­ter­nal mod­el­ling, the price would then have to go up to be­tween $200- and $300-per-tonne by 2050, gov­ern­ment ex­perts sug­gested.

The num­bers are based on a car­bon pric­ing plan be­gin­ning in 2015, and as­sume a car­bon-tax-only pol­icy, ab­sent new reg­u­la­tions. Any de­lays in im­ple­men­ta­tion, the brief­ing note says, “sig­nif­i­cantly in­crease re­quired price.” The seven pages im­me­di­ately fol­low­ing those num­bers are redacted.

The pre­sen­ta­tion pre­pared for McKenna con­tains re­search not just on car­bon pric­ing but on other sys­tems such as cap-and­trade, which sets a cap on emis­sions and al­lows the mar­ket to trade lim­ited car­bon “al­lowances” back and forth.

It sug­gests that us­ing both sys­tems to­gether would “in­cent emis­sions re­duc­tions at the low­est cost” and “raise sig­nif­i­cant rev­enue.” It adds, too, that most stud­ies on car­bon tax­a­tion else­where in the world “have not iden­ti­fied a ro­bust link with neg­a­tive eco­nomic or com­pet­i­tive­ness im­pacts.”

The Lib­er­als ended up promis­ing only a more­mod­est ver­sion of the car­bon tax, an­nounc­ing last Oc­to­ber that a na­tional floor price of $10/tonne — paid by pri­vate-sec­tor emit­ters — would be es­tab­lished start­ing in 2018, ris­ing to $50-per-tonne in 2022. The full plan, in­clud­ing how much costs will rise in the fu­ture, has not been re­leased.

The brief­ing says “re­gard­less” of what hap­pens with car­bon pric­ing, com­ple­men­tary mea­sures will be needed to meet what is an “am­bi­tious tar­get.”

McKenna’s staff say they are con­fi­dent tar­gets will be reached with other tools ne­go­ti­ated in the fed­er­al­provin­cial “pan-Cana­dian frame­work,” in­clud­ing up­dated reg­u­la­tions.

“We’re work­ing on a clean fuel stan­dard; we’re work­ing on build­ing codes. We then also chose that we would ac­cel­er­ate the phase­out of coal. And then the sig­nif­i­cant in­vest­ment in green in­fra­struc­ture,” said Marlo Raynolds, McKenna’s chief of staff.

He ac­knowl­edged the num­bers are what would be needed if car­bon pric­ing was the only mea­sure be­ing used. But in­stead, the Lib­er­als are pur­su­ing “a port­fo­lio of dif­fer­ent poli­cies.”

Raynolds said the gov­ern­ment is con­fi­dent it will meet its cli­mate tar­gets. “The rub­ber is re­ally hit­ting the road this year in terms of try­ing to get these things im­ple­mented now.”

Still, they’re not there yet, says ex­pert An­drew Leach, a pro­fes­sor at the Univer­sity of Al­berta who worked at En­vi­ron­ment Canada un­der the Harper gov­ern­ment and chaired the panel that ad­vised Al­berta Premier Rachel Not­ley on car­bon tax­a­tion.

“Un­less you’re go­ing to go fur­ther than you’ve said so far, in be­tween the years of 2022 and 2030,” Leach said, the gov­ern­ment won’t be on track to meet its tar­get. “You’re go­ing to need more strin­gent poli­cies.”

He said a “dis­con­nect” be­tween cli­mate tar­gets and ac­tual pol­icy is same-old. “It’s not some­thing that is in any way new that there would be this dis­crep­ancy be­tween the poli­cies that we’re talk­ing about, so far, and the out­comes of those poli­cies.”

The num­bers are in line with what sci­en­tists at En­vi­ron­ment Canada were telling the pre­vi­ous Con­ser­va­tive gov­ern­ment, and what cli­mate ex­perts have been say­ing for years, Leach said.

Mean­while, the Trump ad­min­is­tra­tion ap­pears on track to dis­man­tle most of the states’ in­fra­struc­ture sup­posed to help mit­i­gate cli­mate change — mak­ing for a po­lit­i­cally tricky en­vi­ron­ment.

Prov­inces will have con­sid­er­able lee­way to de­cide how they will meet the fed­eral gov­ern­ment tar­gets, whether with car­bon tax­a­tion or cap-and-trade sys­tems.

Bri­tish Columbia has al­ready had a car­bon tax since 2008, now at $30-per­tonne, which has been es­ti­mated to cost con­sumers about seven or eight cents per litre at the gas sta­tion.

Al­berta started its own car­bon pric­ing Jan. 1, at $20-per-tonne, ramp­ing up to $30-per-tonne next year. This year, the Al­berta gov­ern­ment es­ti­mates im­pacts of al­most $200 for sin­gles and $360 for a fam­ily of four. It of­fers re­bates that will mit­i­gate cost for some house­holds.

The Lib­eral gov­ern­ment has es­ti­mated how con­sumers will be af­fected by the fed­eral floor price, but they haven’t re­leased the num­bers.

The Cana­dian Tax­pay­ers Fed­er­a­tion claims av­er­age house­holds could see a cost of up to $2,500 per fam­ily with a $50-per-tonne price, while es­ti­mates from think-tanks and aca­demics put the num­ber closer to $1,500.

YOU’RE GO­ING TO NEED MORE STRIN­GENT POLI­CIES.

IAN KUCERAK / POST­MEDIA NEWS FILES

A car­bon tax on fuel and other en­ergy items im­posed by the NDP gov­ern­ment of Al­berta is es­ti­mated to im­pose a cost of $200 on in­di­vid­u­als and $360 on a fam­ily of four.

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