Regarding the recent blog post, ‘Canada Leads Way on Carbon Pricing’, there was no information on trends in fossil fuel emissions since the pricing was put into effect. Is it to soon to know?
@Steve Glaser Canada's emissions curve has been abysmal despite its adoption of carbon pricing, pointing to the importance of detail in the implementation of climate policy. The problem lies in the many industrial exemptions and particularly in the steep rise in emissions from the politically influential oil and gas sector. I discussed this issue at length in my Nerd Corner post “What's the Matter with Canada?”.
I've seen some recent news stories suggesting that Canada's carbon fee & dividend may be in danger. I think we need a clear-eyed look at what's happening since it could happen if we are successful here.
Here are a couple of these recent stories:
- Trudeau’s halt on carbon tax could undo years of his tentpole climate policy - https://www.theguardian.com/world/2023/nov/07/canada-trudeau-carbon-tax-pause-climate-policy
- Provincial leaders demand national carbon tax reprieve after some energy consumers get a break - https://www.cbc.ca/news/politics/premiers-carbon-tax-federal-housing-policy-1.7020068
I think the core problem here is that it's easy to start down a slippery slope of giving exceptions for key industries - we have already talked about that for retail gasoline here, for instance.
On the one hand, that is pragmatic and in the big picture may not make that much difference on the overall effect on emissions of the carbon fee. But it does undermine the perception of "fairness" and simply creates demand for others to get in line to get their special case exemption as seems to be happening in Canada.
Full disclosure: I am by no means an expert on the Canadian policy, but I found these stories because one of the environmental groups I've talked to here in WA said "Well, that carbon fee may not be working so well in Canada" and I went to look. This could just be a hiccup.. I don't know.
Thanks for any thoughts, especially from those in Canada more knowledgeable about this - is this just noise from those who opposed carbon taxes from the beginning anyway and are now hitting on yet another reason to oppose, or does it represent a real threat to the carbon fee in Canada?
WA State Co-Coordinator
Hi @Mike Kelly. I agree that carbon pricing exemptions are a bit risky, because then they make other groups/industries want their own exemption, although sometimes they're nevertheless important for political expediency or other reasons. I do like this response from the Trudeau government noted in the Guardian article you link:
Instead of adding more exemptions, Trudeau said his government will work with the provinces to further subsidize heat pumps for low-income residents, similar to what was announced in Atlantic Canada.
If home heating costs are the concern, then I think that making the clean alternative more affordable is a smarter solution than granting pollution exemptions, since the point is to incentivize the clean alternative! Hopefully we see more smart constructive solutions like that to complement rather than undercut Canada's carbon price.
I'll also note that we on the CCL Research team plan to do a deep dive into what's happening with Canada's carbon price and emissions, but before we get to that we have to work on some some higher priority items. But it's on the to-do list 🤓
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