Is Trudeau’s national carbon tax even big enough to be worth it?

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Justin Trudeau and the premiers met last week to talk climate change, looked at the options, and then punted everything to the fall. They know that for Canada to meet the relatively modest carbon-emission targets set by the Harper government, the Prime Minister and the premiers will have to agree measures that could cost them their jobs.

The problem is pricing carbon. To seriously reduce emissions of carbon dioxide, "every jurisdiction needs to have a price on carbon," Environment Minister Catherine McKenna told interviewer Chris Hall on CBC radio last Saturday. When Mr. Hall asked, "whether you're prepared to impose a price at some point," she replied: "We have said, and the premiers have agreed, that a price on carbon is part of the solution."

Here's one problem with that: The premiers may have agreed to put a price on carbon (though this will come as a surprise to Saskatchewan's Brad Wall), but they emphatically did not agree to have one imposed on them. Western provinces would consider such a move the National Energy Program 2.0, and don't even ask what the reaction would be in Quebec.

Here's another: A carbon price, to be effective, would have to be astronomically high. That's not opinion, that's fact. Look at the latest report by Environment Canada to the United Nations on this country's efforts to combat global warming. At 726 megatonnes (Mt) of carbon produced annually, according to the latest available data, Canada is nowhere close to meeting its 2020 target of 622 Mt, much less the 2030 target of 524 Mt. (Which is why this column is ignoring Liberal promises about improving on the Conservative government's targets.)

After listing a plethora of federal and provincial initiatives completed, under way or planned, such as Ontario's phase-out of coal-fired plants, B.C.'s carbon tax, Newfoundland and Labrador's Lower Churchill hydro project, tougher federal emissions standards for vehicles, and on and on and on, the report gloomily concludes that overall Canadian emissions will continue to increase – not decrease, increase – to 815 Mt in 2030. More than a decade of efforts to reduce carbon emissions in Canada have utterly failed to bend the curve.

All the more reason to establish a national carbon price that will force meaningful reductions, you might say, and you'd be right. But here's the thing. B.C.'s carbon tax is currently $30 per tonne of CO2. Mark Jaccard, a professor of sustainable energy at Simon Fraser University, has calculated that for Canada to meet its existing 2030 commitment, it would need to a) make the B.C. price the national price, either through a tax or through a cap-and-trade regime, by next year, and b) increase that price by $10 every year, until it reached $160 by 2030, or 40 cents a litre of gas.

"I've checked with other modellers around the country," Prof. Jaccard said Tuesday in an interview, "and the number's pretty close."

That means, just for starters, Quebec would have to hugely increase the carbon price under its current cap-and-trade system; the cost would be even more terrifying for Ontario and Alberta.

"Trudeau must understand that relying solely on one of these two forms of carbon pricing [a tax or cap-and-trade] to achieve even the seemingly modest Harper target may cost him his job," Prof. Jaccard wrote last month in Policy Options. From this chair, that's an understatement.

People who look at this stuff closely generally fall into one of three camps. The first camp favours meeting or exceeding the 2030 targets through pure carbon pricing, and damn the consequences. The problem with this approach is that, apart from the economic cost, it would be political suicide for any politician who embraced it.

The second camp, to which Prof. Jaccard belongs, favours getting to the 2030 target through a combination of carbon pricing and measures that punish fossil-fuel use and encourage alternatives. Think much, much tougher fuel-efficiency standards and building codes, major spending on transit, shutting down all remaining coal-fired generators, increasing green-energy subsidies and the like. The problem with this approach is that, done piecemeal, it won't be any more effective than what's come before; done properly, it will cost a fortune.

The third camp, believing that voters would quickly dispatch any politician who imposed either of the above approaches on them, concludes there's nothing for it but to succumb to despair.

Rather than despair, we might allow ourselves to hope that new and existing technologies will come to the rescue – perhaps nudged along through regulations – that will allow us to make the transition to a low-carbon environment without enduring crippling economic pain.

But meeting the challenge of combatting global warming without killing growth for a decade and sending both voters the premiers into open rebellion is going to be the biggest challenge of Mr. Trudeau's first term.