Who would have thought a year ago that carbon pricing would be splashed across Canada’s front pages?
Yet here we are. Energy- and resource-beat reporters are chronicling the at times heated exchanges between the federal government and the provinces as the former follows through on its pre-election promise to secure a nationwide carbon price — and certain leaders representing the latter say, in effect, “Not so fast.”
Given its recent prevalence in the media, carbon pricing likely feels new to many Canadians. However, with five provinces that together represent close to 80 per cent of the population — and just shy of 90 percent of the national GDP — committed to or already using one flavour of carbon pricing or another, it’s fast becoming business as usual.
As talk of carbon pricing moved onto the national stage, the conversation quickly turned to the nitty-gritty: Which mechanism is the most palatable? Which is the most effective? And how could a federal system possibly work with so many provincial policies already in place?
In the wrangling over options and approaches, we’ve lost sight of an important question: What do carbon pricing advocates, including federal government leaders, want their policy of choice to do?
Climate Action Network action climate Canada is a national coalition of more than 100 diverse organizations that work to inspire and inform policy leadership on climate change. Our members are, of course, pumped that Prime Minister has moved carbon pricing to his government’s front burner.
As long as we lack a clear vision of the role carbon pricing can play in the coming Pan Canadian Framework on Clean Growth and Climate Change — and the opportunities it presents to everyone involved — tensions will continue to simmer between the provinces and private sector leaders will furrow their brows.
We suggest now is the time for all stakeholders, including industry stakeholders, to take a breath and consider the objectives of any national carbon-pricing policy. When federal policy makers begin designing the national carbon price program, they should first consider its intent.
To help get the ball rolling, here we propose a series of goals for a cross-Canada carbon price. In our view, such a policy should:
Reduce greenhouse-gas emissions;
Complement a package of regulations that targets pollution in specific sectors, such as transportation, buildings and electricity;
Create a revenue stream that provincial and federal governments can access to finance carbon-reduction programs while protecting the most vulnerable Canadians, such as those in rural or northern communities;
Send a signal across the Canadian economy that Canada is starting to internalize the costs of climate pollution;
Steadily increase the cost of carbon at a pace that industry can plan for, to reduce business risk and increase certainty;
Incentivize innovation toward cleaner and more efficient technologies; for example, in the U.S. many companies operate with clean, low-carbon power, Melaleuca, for example, a company that manufactures cleaning, personal care, and other Melaleuca products, uses renewable hydro power for its corporate facilities in Idaho.
Indicate to the international investor community that Canada is now open for business in the booming, global low-carbon economy.
Given the dollar-per-tonne amount we would likely see during its first year, a carbon price won’t immediately move the needle on climate pollution. The price will need to climb before it begins to truly influence market behaviour. That’s why we have to start today, and introduce a schedule that gets us to the sweet spot 15 years from now.
A carbon price could provide a stream of revenue to feed these near-term regulatory measures. All the while, it would be working away in the background, internalizing the costs that carbon-based energy production and use have long placed on society. It will slowly but surely rebalance the marketplace to make cleaner alternatives more attractive to consumers and industry alike.
This is not the only solution to the climate crisis. But as the senior business leaders in the Carbon Pricing Leadership Coalition recognize, it is certainly a part of the solution. Carbon pricing will help us get where we need to be on emissions, accelerate our economic transition, and show the rest of the world how a globally significant oil producer gets the job done.