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Business Commentary Climate change and carbon pricing take centre stage in 2019

The year 2018 had many extreme weather events, from coast to coast in Canada and around the world. Here in Canada, we saw an extreme heat wave in Quebec, flooding in New Brunswick, wildfires in British Columbia and tornadoes in Ottawa-Gatineau. High temperature records were set in many places around the world and weather disasters were widespread: record rainfalls in Japan; wildfires in Greece, Sweden and California; flooding in India; a super typhoon in the Philippines and two hurricanes that hit the Southwest U.S.

The cost of such events is staggering. The Insurance Bureau of Canada reports that insured damage from severe weather reached $1.9-billion in 2018. A 2016 report from the Parliamentary Budget Office showed that government spending on weather catastrophes had grown by 40 per cent over a decade and predicted continued growth. And these projected costs don’t even include expenditures on upgrading public infrastructure to withstand the extreme weather of the future – or other adaptations to offset the effects of drought and floods on food systems and other essentials.

In response to the threat of climate change, the Trudeau government and several provinces have developed carbon pricing programs with the intention of slowing greenhouse gas emissions. Provinces that don’t develop their own carbon pricing systems are subject to the federal backstop approach. The backstop includes two distinct mechanisms: the one focused on large emitters came into effect on Jan. 1; a more general fossil-fuel charge will be introduced on April 1 of this year (or no later than July 1 in northern territories).

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Conservative politicians in Canada are united in opposition to the carbon tax, referring to it as a “job killing tax on everything.” There is a strong likelihood that carbon pricing will be among the issues debated in the run-up to the 2019 federal election.

So, with extreme weather in the news, costs mounting, and politicians sparring over whether and how to address climate change, where do Canadians stand?

Based on many years tracking these issues, we find that most Canadians are concerned about climate change, even if they don’t feel particularly well informed about it. We have also found majorities of Canadians supportive of carbon pricing in their province, with Alberta and Saskatchewan the exceptions. And though most Canadians are generally supportive of carbon pricing, personal willingness to pay for climate change action has declined over the past half dozen years, after peaking in 2012. At the same time, however, we have seen an increase in the proportion of Canadians feeling that government action will be required to address climate change, believing that voluntary action isn’t going to be enough.

Over the years, we have also monitored what Canadians feel should be the country’s collective response to climate change – mitigation by way of greenhouse gas reductions, or adaptation to prepare for changes, such as extreme weather. Our 2018 results show that the majority – about six in 10 Canadians – prioritize mitigation over adaptation, a pattern that has not changed over the past decade. Six in 10 Canadians also now believe that a local extreme weather disaster is likely within the next two years, up from four in 10 a decade earlier.

The reality of extreme weather and the threat to home and family appear to have sunk in for many Canadians, and this may be driving their support – albeit grudging support – for carbon pricing as an effort to reduce GHG emissions and slow climate change.

With Saskatchewan and Ontario challenging the federal carbon price in court and the federal election on the horizon, 2019 is set to be the year of the carbon fight. Based on public opinion at this stage – and holding all else equal – carbon pricing should win the day.

In politics, however, things don’t always turn out as expected.

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Tony Coulson is Group VP and Sarah Roberton is VP, both in Corporate & Public Affairs, at Environics Research.

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