Dave Sawyer is an economist with EnviroEconomics.org and is leading CMC Research Institute's Deep Decarbonization Pathways Project. He is a past vice-president with the International Institute for Sustainable Development. He tweets @enviroeconomics
The climate file will be a messy affair for the new Liberal government. Years of open warfare between provinces and the federal government coupled with a bureaucracy beaten into submission means dark thoughts now pervade climate policy. Monday' meeting between the First Ministers is a much needed step in the right direction.
Still, we have an almost unworkable patchwork of provincial policies defined by two extremes.
The first are the provincial laggards who laid low as Conservative climate initiatives sputtered. For this crowd, it paid to go slow and wait for federal regulations to become law. Absent new federal prompts, this go slow approach will continue.
But for those leading jurisdictions implementing carbon pricing now, there's not much room for the federal government to move. Our largest economies are more or less covered by three different forms of carbon pricing. In British Columbia, there's the carbon tax, Alberta continues with a hybrid carbon price that is now economy-wide while Québec and Ontario are implementing cap and trade with California.
So, what is the path forward for Prime Minister Justin Trudeau and Environment Minister Catherine McKenna?
First, bring sunny ways to the climate file. Industry, the provinces, the federal bureaucracy and the NGOs all need a hug. Truthfully, this crowd is drained after the train wreck of the last 10 years. Internationally, Canada's myopic positions have left our geopolitical and economic interests exposed. Keystone XL says it all. If workable policy solutions are to emerge, mending fences at home and abroad is job one.
Second, implement your campaign platform. Getting on a plane to next week's Paris Climate Summit is a good use of scarce time, as is today's First Ministers meeting. Smoothing the political waters and signalling a willingness to cooperate at home and abroad will pay dividends.
Another good move is defining a federal backstop policy to push provincial laggards while increasing ambition aligned with Canada's 2020 and 2030 GHG targets. The challenge will be to accommodate the provincial patchwork within a national performance standard. For now, the simplest action is to increase the federal gas tax, reinforcing provincial carbon policies while broadening the price signal to laggards. Recycling tax proceeds back to the provinces will help with infrastructure spending priorities. In the longer term, a cap and trade mechanism linking subnational systems is needed, but set that aside for now.
Investments in clean technology are also needed, especially for industrial emitters. We can't expect global technology spillovers to solve our emission challenge. Working with the provinces on regional R&D priorities is an ideal role for the federal government. As is allocating more climate finance to obtain carbon reductions globally, making our targets cheaper to attain while supporting sustainable development in least developed countries.
Finally, focus on actions and not targets because we know politically set targets are economically infeasible. Was Mr. Harper really prepared to implement a $175 per tonne carbon price to hit his 2030 target? Hold the line on the current federal target and focus on actions, not words. Our current 2030 target is a stretch.
With a little sunshine, some simple steps, and a pragmatic and inclusive approach the federal government could move forward rapidly with a credible policy package. This is not transformative change, but rather a badly needed reset of federal climate policy. Then with a bit of breathing room and less brawling, Canadians might just begin to focus on prospering in the global low-carbon economy.