Canada Adopts Carbon Pricing — Possible North American Hat Trick?

Canada’s federal environment minister Catherine McKenna made a huge announcement Sunday on Canadian television’s Question Period. The central government in Ottawa has come out for nationwide carbon pricing. It will soon levy a minimum national carbon price on any province that lacks adequate plans to reduce its own greenhouse gas emissions.

Catherine McKenna, Canada’s environment minister (cmckenna.liberal.ca)

Many environmentalists argue that Canada’s current goal (cutting GHG emissions to 30% below 2005 levels by 2030), adopted last year by the Conservative Harper government, lacks punch and may be the weakest among leading industrialized nations. Ms. McKenna indicated that for now, Justin Trudeau’s Liberal government will not commit to a more aggressive target. She says, however:

“It’s mandatory that everyone will have to have a price on carbon. If provinces don’t do that, the federal government will provide a backstop.”

Also:

“We’re going to take real action [this time].… The Harper target was a fake target because [the Conservatives] did nothing.”

National planning represents a major commitment for this key petroleum producing country. The Prime Minister and his provincial premiers met in Vancouver in March and specified a need for national climate planning. Trudeau hopes to have the plan in place before November’s world climate summit (the UN’s COP22) in Marrakesh, Morocco.

Canada’s provinces will be able to choose either to tax greenhouse-gas emissions, as British Columbia and Alberta have already done and the Trudeau government favors, or adopt the cap-and-trade approach Ontario and Quebec have put in place. The federal mandate would likely involve some form of higher taxes on fuels. McKenna says that the price will have to be high enough to encourage energy conservation or switch to cleaner renewable sources, and that it will have to rise over time. She says that the new emissions plan will be firmed up sometime in October, followed by a federal-provincial meeting.

In addition to carbon pricing, sources for the respected Toronto Globe and Mail say that Ottawa has set three other goals for its carbon management efforts:

• A national strategy to reduce methane emissions from oil and gas extraction
• A new plan to phase out coal-fired power generation
• Numerous measures to encourage the adoption of clean-energy technology

Canada’s four largest provinces (British Columbia, Alberta, Ontario, and Quebec) currently have carbon pricing. However, other premiers dislike the idea of working out their own carbon pricing plans.

Saskatchewan Premier Brad Wall, the longest-serving premier in the country, has been the most vocal of these. A supporter of the now-defunct Keystone XL proposal, he argues that his province has its own climate plans and that the federal approach will be punitive. Saskatchewan has strong interests in oil and gas production in Western Canada. Wall states:

“If it’s some sort of universal price that will manifest itself as a tax and be disproportionately impacting the energy sector, which is already reeling, then we have a big problem in Saskatchewan.”

As CleanTechnica reported just after Labor Day, Mexico — also an important oil producer — was the first of North America’s three countries to roll out a nationwide carbon tax program. The southern nation’s year-long pilot cap-and-trade system will begin in November on a trial basis. This demonstration project with up to 60 participating members paves the way for a national carbon market that Mexico intends to launch in 2018.

The question now arises whether the United States could complete a North American hat trick before or during the Marrakesh gathering. Naturally, this will depend in large part on the results of the national presidential election scheduled for November 8. COP22, the UN climate change conference, will take place November 7-18.

In the US, Donald Trump vehemently opposes restrictions on the oil and gas hegemony. Hillary Clinton has so far stopped just short of advocating carbon pricing, but she still has the option open until November 8.

Libertarian Gary Johnson (“What is Aleppo?”) believes that human carbon emissions affect the climate but advocates no government action, although he has also stated that he’s “open to the idea of a carbon tax” because “it ends up being revenue-neutral.” And Jill Stein, the Green candidate, advocates that the US lead on a global treaty to halt climate change and end destructive energy extraction.

Neither of the latter two candidates has achieved a high enough poll status to qualify for the first presidential debate. Both appear to be hurting Clinton more than Trump. Several days ago, the Real Clear Politics average of 7 polls gave Johnson 8.6% of the vote and Stein, 3.1%. Nate Silver’s 538 poll indicates that votes for either of these two are unlikely to influence the course of the general election.

However, the NBC News|SurveyMonkey Weekly Election Tracking poll conducted online September 5 through September 11, 2016 (n=16,220 adults nationwide) indicates that “the third-party candidates have the potential to play a key role in the 2016 presidential contest.” But will these third-party supporters turn into actual voters in November — and for whom?