Quebec carbon market has little impact: experts

As politicians across the country worry about the consequences of a national carbon tax on family incomes, many experts say the muchtouted carbon market in Quebec has so far had little effect on changing citizens’ habits.

Prime Minister Justin Trudeau recently announced all provinces will need to set a baseline price for carbon by 2018, either with a tax or through a carbon-market system similar to the one Quebec has adopted.

Ontario is set to join Quebec’s carbon market — which is tied to California’s — but so far the program has not had the desired outcome, say prominent experts.

“The carbon market, to this day, has had zero effect on the habits of Quebecers — I am quite ready to say that,” said Pierre- Olivier Pineau, chair in energy sector management at HEC Montreal.

Jean-Thomas Bernard, invited professor in economics and social sciences at the University of Ottawa, agrees.

The market “doesn’t seem to be restrictive enough,” Bernard said. “We’re not talking about significant price changes (of carbon credits).”

However, Quebec Environment Minister David Heurtel said the money collected thus far from the carbon market is allowing the province to make investments that are making a difference.

Companies in Quebec must buy the right to produce more than 25,000 tonnes of CO2 a year, in the form of carbon credits. The provincial government offers businesses a certain percentage of credits free, while the rest are purchased at auctions held four times a year.

During the last auction, the price of carbon was $16.45 a tonne, which translates to an increase of slightly more than three cents a litre at the pump for consumers.

With the recent drop in oil prices, however, the hike has gone relatively unnoticed. Moreover, companies have in large part deserted the market altogether in 2016.

The number of credits purchased on the market fell from 11 million at the beginning of the year, to one million in May, only to increase slightly to 3.5 million last August.

“That shows there is a surplus of credits right now,” said Bernard.

Pineau said buyers think the system will fail or that it’s worth waiting.