Now that Ontario’s new Progressive Conservative government has officially ended the Liberals’ cap-and-trade experiment, Canada’s most populous province has no plan to reduce carbon emissions. And if you believe Premier Doug Ford, it doesn’t matter.
“Cap-and-trade and carbon-tax schemes are no more than government cash grabs that do nothing for the environment, while hitting people in the wallet in order to fund big government programs,” Mr. Ford insisted last week in announcing an end to the province’s 18-month-old cap-and-trade regime.
Sadly, he has a point. Almost everywhere carbon pricing has been implemented, it has failed to put a meaningful dent in greenhouse gas emissions. But that’s because the politicians who have embraced either cap-and-trade or carbon taxes have been reluctant to make the hard choices needed to meet their own stated carbon-reduction goals. In other words, they’ve been faking it.
“The result is a policy prescription widely billed as a panacea is acting as a narcotic,” Jeffrey Ball of Stanford University’s Steyer-Taylor Center for Energy Policy and Finance writes in a recent Foreign Affairs article. “It’s giving politicians and the public the warm feeling that they’re fighting climate change even as the problem continues to grow.”
An effective carbon-reduction scheme would involve not only putting a price on carbon far higher than any government has contemplated. It would require massive investments in carbon capture, energy storage, small modular nuclear reactors or other low-carbon technologies still in their infancy due to a lack of funding or incentives.
As it is, existing carbon-pricing schemes are mostly feel-good policies that may do more harm than good by lulling voters into complacency. They won’t get us to anywhere close to where we need to go anywhere fast enough.
With Ontario and Saskatchewan now challenging Ottawa’s authority to impose a carbon tax on provinces without their own carbon-pricing scheme, Canadians are witnessing a phony war that is detracting attention from the real problem. That problem consists of designing a carbon-reduction plan that meaningfully cuts emissions without pushing the economy over the brink. Canada is hardly alone in this challenge.
“Physics, politics and economics all conspire to make climate change what social scientists call a ‘wicked problem’ – one in which every supposed solution creates another complication,” notes Mr. Ball, a former Wall Street Journal environment editor.
That makes it tempting to throw one’s hands up in the air, as Mr. Ford and Saskatchewan Premier Scott Moe seem to have done, and leave the problem to another country, or another generation, to solve.
After all, nothing Canada does will matter if China, India and other developing countries don’t act soon to curb their emissions. Mr. Ball notes that, while China has vowed to introduce a countrywide carbon-pricing scheme within the next two years, its proposals have been steadily watered down. Current pilot projects in China put a price on carbon that is “too low to meaningfully change the behaviour of companies or citizens.”
So maybe carbon pricing is a dead end. Perhaps a new approach is needed.
One promising development arose earlier this year from the unlikeliest of sources. The budget bill that U.S. President Donald Trump signed in February provides major tax incentives to companies that capture their carbon emissions. Development of carbon capture-and-storage (CCS) technology has stalled in recent years. But analysts expect the new incentives, which include a US$50 tax credit for each tonne of carbon stored, will spur renewed interest and investments in CCS. Since it is illusory to expect that China, India and the developing world will wean themselves off coal in the coming decades, CCS could constitute the world’s best shot at getting within shooting distance of the goals set out in the 2015 Paris climate accord.
Nuclear power production also needs to be maintained at current levels, if not increased. Safety concerns could be minimized by incentivizing the development and installation of small modular reactors.
Instead of subsidizing more wind and solar power production, developing energy storage technologies that enable the optimization of existing renewable power sources should be a priority. And funding the development of better electric car batteries should take precedence over subsidizing electric-vehicle purchases.
And, yes Mr. Ford, gasoline taxes should rise considerably to induce consumers to buy more fuel-efficient cars and drive less. Increased gas-tax proceeds should be used to provide rebates to low-income drivers who don’t pay income taxes and income tax cuts to those who do.
Until politicians who claim to want to save the planet move to implement carbon-reduction measures that actually yield results, it will be easy for their adversaries to dismiss existing carbon-pricing policies as mere “tax grabs.”