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Peter Dyk unhooks his EV vehicle at a charging station near the QEW in Oakville, Ont. on March 17. One of the most affluent cities in Ontario, Oakville has the highest ZEV adoption rate in the province, at nearly four vehicles per 1,000 people. Mr. Dyk, however, says it can be difficult to find a charging station. He paid to charge his battery at this Flo Station after another Ivy Charge station nearby was not working.Melissa Tait/The Globe and Mail

Even as they lament the increasingly bleak outlook for the survival of the federal carbon-pricing system, many of those who championed it as the cornerstone of Canadian climate policy are acknowledging that it has turned out to be less crucial than once envisioned.

After Justin Trudeau’s surprise decision to lift the levy on fossil fuels for some consumers spurred calls by premiers for the system to be further dismantled, The Globe and Mail spoke with some of the policy’s most influential long-time advocates about how much effort they think should be expended trying to save it.

That question is increasingly relevant, as Ottawa faces choices about how resolutely to respond to challenges such as Saskatchewan Premier Scott Moe threatening to stop collecting carbon taxes on natural gas in that province.

The answers to it reflected considerable disagreement. That’s partly attributable to the fact that as Ottawa has ratcheted up the carbon price in recent years, it has not released detailed modelling or data showing its impact relative to other, often overlapping climate measures.

Some experts stood by it as being by far the most efficient way to reduce emissions. Among them was the Canadian Climate Institute’s Dale Beugin, previously the executive director of Canada’s Ecofiscal Commission, which was a leading force for national carbon pricing when it was implemented.

Others, such as the University of Ottawa’s Nicholas Rivers and Chris Bataille of Columbia University’s Center on Global Energy Policy, gave the impression that while carbon pricing still has strong potential if Ottawa sticks with it, it has thus far worked better in theory than in practice; they were more open to replacing it with other regulatory options.

The overall picture that emerged was that the absence of the carbon price faced by most consumers would leave a couple of significant holes in the plan to achieve Canada’s national emissions-reduction commitments – but not ones that would be impossible for a climate-minded federal government to fill.

There is also a fairly common sentiment that the separate pricing system for large industrial emitters – applied to sectors such as oil and gas, electricity and heavy manufacturing – is at least as important as the fuel charge faced by everyone else and has better long-term prospects.

That’s largely because it seems likelier to survive a change in government, since the federal Conservatives (currently leading in opinion polls) are less committed to scrapping it than they are the consumer-facing version. And the industrial requirements also face less opposition from the provinces.

Even carbon-pricing’s staunchest advocates acknowledge that the fuel charge’s perilous future, whenever Mr. Trudeau’s Liberals lose office, was at least somewhat undermining its effectiveness even before the recent swerve.

The uncertainty gets in the way of the premise that knowledge of the price’s upward trajectory – to $170 per tonne of GHG emissions by 2030, from $65 per tonne currently – will incentivize consumers to make long-term investments such as electric vehicles and energy retrofits to their homes.

Now, the Prime Minister has himself undermined the carbon price’s other main potential impact, which is to more immediately exert enough pressure to cause quicker changes to consumer behaviour. His government’s announcement of a three-year reprieve from the charge on home heating oil, for Atlantic provinces where that fuel source is common, has signalled a willingness by Ottawa to alleviate that pressure, if the outcry is strong enough.

“What a shame to undermine such a fundamental policy,” Mr. Beugin said.

Not that it’s just the government’s recent decisions around the policy that have caused second guessing. A common lament is that the rebate system that accompanies the fuel charge, in which almost all revenues are returned to taxpayers in a way meant to have all but those with unusually emissions-intensive lifestyles come out ahead, has caused confusion rather than ensuring buy-in.

Mostly, the policy’s boosters are critical of Ottawa for failing to communicate and deliver the rebates in a way that Canadians would easily understand and notice.

A former official involved in the implementation of the carbon-pricing system also recalled more fundamental disagreements about the rebates. Some within government unsuccessfully argued that the revenues should instead be used to cut other sales or income taxes, in a way that might have been more popular and less appealing for subsequent governments to undo. (The Globe and Mail is not identifying the former official because they were not comfortable speaking publicly about that process.)

At the same time, there is a feeling among some experts that what was once touted as a big advantage for carbon pricing over other climate-policy measures – the fact that it allows consumers to choose whatever emissions-reducing solutions work best for them – has been eroded by the unforeseen dominance of some clean technologies over others.

Both Mr. Rivers and Mr. Bataille pointed to electric vehicles, and electric heat pumps to replace fossil fuels for the heating of homes and commercial spaces, as the two prime examples of that phenomenon. Both have taken off faster than was expected when carbon pricing was being conceived years ago.

So there is now a stronger case for regulatory and incentive policies more specifically designed to further accelerate their uptake, in the two sectors – transportation and buildings – which the fuel charge is mostly meant to affect.

But as matters currently stand, the carbon-pricing regime is considered much more important to one of those sectors than the other – pointing to the complexities of assessing the consequences of its possible demise.

The shift toward EVs, according to most experts, would be affected relatively marginally, for a variety of reasons. Among them are variable gasoline prices in which carbon taxes play a fairly small role, and the high upfront cost of purchasing a new vehicle.

Meanwhile, there are other regulations for that industry already in place (fuel-efficiency standards) or at advanced stages of development (a requirement that EVs occupy a growing share of all vehicle sales) that stand to have greater impact, coupled with purchase subsidies.

Buildings are a different story. There, the carbon price occupies an increasingly significant share of natural-gas costs in particular, to the point where analysis by experts such as Mr. Rivers shows it making the replacement of furnaces with heat pumps economical when it otherwise would not be. And although Ottawa provides some heat-pump purchase subsidies, there are fewer other existing or in-the-works regulations to encourage that shift.

Arguably, there is a correlation between the carbon price and slowness to develop other federal policies to reduce building emissions. Brendan Haley, the policy director for the buildings-focused think tank Efficiency Canada (and something of a carbon-pricing skeptic), said that federal departments with which he engages sometimes invoke carbon pricing to dismiss suggestions of additional measures.

Were the fuel charge to be taken off the table, the push for more sector-specific policies – including restrictions on new installations of gas furnaces – could become stronger and harder for climate-minded federal (or provincial) governments to brush off.

Another corner of the economy where there would be an obvious gap would be companies in manufacturing or other sectors that have significant emissions, but are too small to be covered by the separate system for heavy emitters.

That points to one of the top high-level concerns about the potential consequences of a full carbon-pricing retreat: a worsening of competitive disadvantage with the United States. Washington is spending staggering sums on incentivizing clean-technology investment by businesses big and small, via last year’s Inflation Reduction Act.

While Ottawa has tried to match some of those subsidies, mostly through a series of promised investment tax credits, it has been candid about its inability to equal Washington’s spending. And it has pointed to carbon pricing (which does not exist nationally in the U.S.) as a reason it does not need to do so.

“Combining carrot and stick was always the intent, and a more sensible approach to climate policy given the size of government,” said TD Economics managing director and senior economist Francis Fong. In the absence of the fuel-charge stick, he suggested, Ottawa would need to look at expanding both incentives and the industrial pricing system to keep up.

Beyond these direct effects, there is a more symbolic one to consider, if carbon pricing’s future is as grim as it currently appears.

A frustration, among some leaders in the climate-policy space, is the extent to which it has an outsized role in perceptions of Ottawa’s emissions-reduction strategy. That’s despite all the other measures, from tax credits to industrial grants programs to regulations of fuel and power sources, that are in place or in the hopper.

“Because it’s been politicized, it’s like the headline measure,” said Dave Sawyer, the Climate Institute’s principal economist.

Mr. Sawyer didn’t dismiss carbon-pricing’s impact. At its current level, he said, “it’s starting to bite” enough to increasingly affect behaviour. But “if you talk to anyone in the field, all these other policies are also driving down emissions.”

An optimistic view from an emissions-reduction perspective, albeit one that most carbon-pricing advocates only reluctantly acknowledge, is that even if it’s scrapped, the carbon price’s lightning-rod status has opened up room for Ottawa to implement some of its other measures with less controversy around them.

That could also make it a sacrificial lamb, conceivably sparing some other climate policies that could otherwise be on the chopping block, if a new government takes office and wants to differentiate itself.

Before it gets to that point, nobody who lobbies for ambitious emissions strategy wants or expects the current government to completely abandon what has been portrayed – perhaps too much so – as its signature policy.

Whether it’s a hill to die on is more a subject of debate.

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