Can Alberta have it both ways on carbon pricing?

As the battle for the Trans Mountain pipeline rages on — last week, Alberta Premier Rachel Notley launched a million-dollar ad campaign aimed at its opponents in B.C. — a big question still looms.

How can the federal and Alberta governments support a pipeline designed to significantly increase shipments of diluted bitumen from the oilsands while at the same time proclaiming it doesn’t contradict their efforts to reduce carbon emissions and curb climate change?

Can they have it both ways? Are they talking out of both sides of their mouths?

Environmentalists and Indigenous groups in B.C. claim they are. They say the $8-billion pipeline expansion encourages ramped-up production from the tarsands, and that will increase greenhouse gas emissions at a time when Canada should be reducing them.

In Alberta and some parts of B.C., proponents of the pipeline expansion aren’t so concerned about climatechange policies; they simply see it as another Lego piece in the national petroleum infrastructure that keeps the economy humming along.

It’s the old jobs-versus-the-environment argument, in which we are expected to choose one over the other.

Or we want government to choose one over the other.

Trying to have it both ways is a lot more complicated.

“It’s important to look at this situation from a national policy perspective,” Alberta economist Andrew Leach told me.

“If we want to significantly reduce greenhouse gas emissions, government can’t simply tell one industry that it has to shut down. What if it decided that some of the manufacturing sector in Ontario is to be shut down because its carbon emissions are too high?”

Leach focuses on energy and the environment at the University of Alberta’s business school. In 2015, he chaired the newly minted Notley government’s advisory panel on climate change and is widely recognized as the architect of Alberta’s carbon reduction policies.

Leach says we need to look past the political tit-for-tat nastiness that has erupted over the pipeline and view the situation in terms of national climate change policies and goals.

If we think blocking a pipeline will reduce carbon emissions, why not stop licensing gas-guzzling pickup trucks or SUVs as well, Leach asks.

No doubt a lot of Canadians would not take kindly to that kind of micromanaging by government.

Instead, the Trudeau government decided on national carbon pricing as a way to reduce greenhouse gases and get Canada in line with international goals for curbing climate change. Notley’s NDP government went along with the plan and set its own price on carbon. B.C. had already done so years before. Ontario and Quebec opted for cap and trade systems.

Interestingly, everyone from the Suzuki Foundation to Steve Williams, the CEO of Suncor (the largest oilsands producer), supports carbon pricing.

Carbon pricing is actually a conservative solution to rising carbon emissions, because it relies on market forces to reduce emissions rather than government regulation of particular industries or consumer practices.

If you produce a lot of carbon when you drive your car, and the more you produce, the more it costs you, you are more likely to eventually buy a smaller car, ride a bike or take public transit.

This long-term strategy — to reduce demand for carbon-emitting fuels by pricing carbon and letting the market sort it out — means oil will continue to flow through pipelines as long as there is demand for it. When demand for oil drops, as it is likely to, so will demand for pipelines and oil tankers.

But if the B.C. government and protesters manage to kill the expansion of the Trans Mountain pipeline, which has been approved by the National Energy Board and the federal cabinet, the Notley government is likely to pull out of the Trudeau climate-change plan, or it will be defeated in next year’s election by the United Conservative Party, which has promised to abolish carbon pricing.

Either way, Trudeau’s national climate-change strategy will fall apart, because Alberta is a key player.

Trudeau and Notley still believe they can have it both ways.

We’re about to find out if they are right or simply deluded.