California, here we come
Gaffe-prone Ontario Liberals turn over green policy to California
It’s easy to feel apprehensive about the Ontario government’s latest announcement of a billiondollar initiative.
Such is the Liberal record in billion-dollar initiatives that Ontarians can be forgiven if they suffer a tremor of fear at news of Premier Kathleen Wynne unwrapping yet another. In 14 years they’ve witnessed the once-efficient and affordable power grid turned into a hyper-expensive disaster. Billions poured into “smart-meter” systems that don’t work. An eHealth program that’s become a perennial black hole. And an embarrassing transit system in and around the provincial capital that — despite semi-regular announcements of billions in new spending — remains pretty much as overloaded and inefficient as ever.
So forgive people if they weren’t entirely swayed by Wynne’s confirmation Sept. 22 that the province had agreed to formally join Quebec and California in a shared carbon emissions trading program. The agreement will enable the three governments to hold joint auctions of greenhouse gas emission allowances and to harmonize regulations and reporting. According to the premier’s media department, the deal “will accelerate progress on the three governments’ leading work in the global fight against climate change,” and demonstrates their shared commitment to achieving the “objectives of the Paris Agreement as well as the value of governments working together across borders.”
It doesn’t mention that the Paris accord largely exists in name only, now that the U.S. has threatened to pull out of it. The White House has hinted it might be amenable to remaining part of the agreement for now, but only if President Donald Trump can be satisfied that enough concessions have been made to U.S. interests.
But never mind that. What’s most worrying about joining forces with California is the uncertainty it entails. This is not an agreement among equals. This is Ontario handing its carbon pricing system to California. “Progressives” make a lot of noise about the evils of “colonial” government. Yet for all intents and purposes, Ontario has signed on as a carbon colony of California.
California has more people — 40 million — than all of Canada. Its economy is the world’s sixth largest. If it were a country, it might displace Canada as a member of the G7.
It also has politics to match, and its carbon-trading system is a regular battleground of cutthroat political manoeuvring. Like it or not, Ontario will now be along for the ride as the powers of left and right battle it out in Sacramento.
As by far the biggest member of the carbon trio, California will set the price. It will also make the rules.
In July, Gov. Jerry Brown signed a bill extending cap-and-trade legislation by 10 years, to 2030. To get it through the state legislature, he spent months trading favours. To please Republicans, he had to agree to tax breaks, let them decide how some of the money would be spent, and ban local governments from adopting tougher measures than those set by the state. The state also rejected a bid to have the money go straight to individuals as a dividend, as a form of “basic income.”
Ontario isn’t required to match these concessions, but it demonstrates the political essence of capand-trade and the unpredictability of future developments, which now lie in California’s hands. Indeed, Brown proudly proclaimed Canadian provinces were following his lead, calling California “a nation-state in a globalizing world.”
Neither California nor Ontario produces enough emissions to make a major difference. The real attraction of carbon pricing to politicians is the money: the billions in revenue the system will produce.
Unlike Brown, Wynne has so far refused to share control of the new money pool with anyone but her ministers. Ontario will dish out the cash as it sees fit, and if much of it goes to projects tied to Liberal electoral goals, well, no doubt that will be solely a coincidence.
In California, at least a quarter of the revenue is to go to a personal project of the governor, a $64-billion high-speed-rail project connecting San Francisco and Los Angeles. Ontario has occasionally dabbled with a similarly costly fantasy. Could the Liberals resist another opportunity for a billiondollar announcement?
At present, the price of permits in California is low. That’s because it has an abundance of them. If the surplus dwindles, the price is likely to rise. How high, nobody knows, though some of the predictions are alarming. Since California has the cheap permits, it will get the money. How long that will remain the case, no one can be sure. Ontarians may squawk at that, but the government will be able to throw up its hands and declare itself helpless. California is by far the dominant player, after all.
Some observers consider Ontario’s subservience to its bigger U.S. partner a good thing. It will mean, they suggest, that the province is dragged along despite itself whenever California toughens its regulations. That’s a valid enough opinion, if you don’t mind handing important elements of economic power to a foreign government, or if you take for granted that all future changes to the system will be beneficial. Should Republicans gain control of the state legislature, for instance, “progressives” might not be so pleased with serving as an emissions appendage.
Unfortunately, if it happens, they may have to learn to live with it. Like so many of the Liberals’ other bold projects, this one could be hard to get out of.
That’s the thing with Ontario’s Liberals: they talk a lot about tomorrow, but mostly trade it off for political gains today.
— National Post