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Canada will adopt carbon tax, former Quebec premier Charest predicts

Stephen Harper signs a "No Carbon Tax" sign at a campaign rally in Cornwall, P.E.I. on Oct 13, 2008.

Tom Hanson/THE CANADIAN PRESS

Canada will ultimately move to adopt a carbon tax despite the outright rejection of such a policy by the Harper government, former Quebec premier Jean Charest said Thursday.

In a discussion on carbon pricing, Mr Charest joined former Syncrude Canada chief executive Eric Newell in endorsing a clear and simple tax on carbon emissions.

"I think there is going to be a tax on carbon and I think it will happen in the next 10 to 15 years," said Mr. Charest, who introduced a small such levy when he was premier.

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Mr. Newell - who now leads Alberta's carbon investment fund - said oil industry executives know they face an increasingly tough climate policy and want a straightforward levy.

"There is more acceptance with CEOs for a strong carbon price signal," Mr. Newell said.

"We need to make it simple, make it direct, make it certain and then the free enterprise system will take over."

But Mr. Newell said it is critical that any plan generate revenue to support the development of emission-reduction technology for industries like the oil sands.

The Alberta government is now looking at strengthening its climate policy to force large polluters like those in the oil sands sector to cut emissions per barrel by 40 per cent and pay a $40 a tonne levy into a technology fund on levels in excess of that.

The federal government is negotiating with Alberta and the industry on a regulatory approach, but may yield to the province on the design of the program.

Ottawa thinktank, Canada 2020 hosted Thursday's discussion on carbon pricing and argued for a new national debate on the issue, without the bitter partisanship that now exists.

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The Harper government once proposed a system to cap emissions and allow trading of credits, but dropped that when a similar plan in the U.S failed to pass Congress.

It is now pursuing a regulatory system that would set limits for individual industrial polluters.

But Prime Minister Stephen Harper adamantly opposes an economy-wide carbon tax, and has aggressively attacked any opponent who broached the idea.

Green Party Leader Elizabeth May said a carbon levy with matching cuts to other taxes is preferable to either regulation or the type of cap-and-trade plan supported by the New Democrats.

She said the cap-and-trade approach is susceptible to "fraud" and "gaming."

Ms. May said there is an urgent need for action and - as one of the world's largest emitters per capita - Canada should play a leadership role.

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Editor's Note: An earlier headline on this story incorrectly identified Jean Charest as Quebec's current premier. This version has been corrected.

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