Ontario is a world leader when it comes to fighting climate change. Canada’s most populous province has shown that it’s not only possible to cut carbon emissions, it’s possible to cut quickly and deeply.
In the space of just one decade, between 2005 and 2015, greenhouse gas emissions from Ontario’s electricity sector fell by 87 per cent.
Until the mid-2000s, Ontario’s GHG output had been steadily rising. But since then, even as the economy and population have continued to grow, the province’s overall carbon output has fallen by 22 per cent.
Last week, we wrote about the Ecofiscal Commission’s final report, which said that meeting Canada’s GHG reduction goals calls for a carbon price of $210 a tonne – roughly 40 cents of additional carbon taxes on a litre of gasoline.
This page has long supported carbon pricing. Evidence and theory both suggest that a market-based mechanism that leaves millions of small decisions in the hands of individual consumers is, in many if not most cases, the most efficient way to tackle climate change without breaking the economy or bankrupting our governments.
However, carbon taxes aren’t the only tool in the tool box. And they weren’t what Ontario reached for when it decarbonized its electricity system.
Ontario used old-fashioned regulation: It simply ordered the closing of the province’s handful of coal-fired generating stations. In the space of nine years, starting in 2005, Ontario went from producing one-quarter of its electricity with carbon-heavy coal, to using no coal at all. Last year, 94 per cent of Ontario’s electricity came from carbon-free sources, mostly hydro and nuclear.
It did, however, have significant costs, some of which are baked into the province’s electricity bills. Mistakes included a misguided provincial policy of overpaying for wind and solar power, in a failed attempt at industrial policy, and the commissioning and cancellation of several gas plants; the compensation paid to their owners was an expensive scandal.
But Ontario’s decision to order a postcoal future also had big positives. It’s now one of five provinces – along with British Columbia, Manitoba, Quebec and Newfoundland and Labrador – whose electricity is almost entirely carbon-free. Eight out of 10 Canadians live in those five provinces.
Their clean electricity grids makes it possible to think about greening another sector: road transportation, which accounts for 20 per cent of the country’s carbon emissions.
Electric cars are still a small part of the market but, as the technology improves, their popularity is rising. In the third quarter of 2019, zero-emission vehicles represented 3.5 per cent of all Canadian passenger vehicle sales, a seven-fold increase since 2016. In B.C., they were 10 per cent of the new-car market; in Quebec, they were 7 per cent. In the five provinces with clean electricity systems, each electric car that replaces a gas-guzzler means a big cut to carbon emissions.
But how can more Canadians be encouraged to switch to electric cars? It could be done by regulation, such as ordering manufacturers to build ever cleaner vehicles. That’s been tried before, and it hasn’t worked. Today’s cars, thanks to regulations, are far more fuel-efficient than yesterday’s similarly sized vehicles – but people have responded by driving more and buying ever bigger, less fuel-efficient SUVs and trucks.
Or consumers could be offered cash from government to go electric. But those subsidies are carbon taxes in reverse. They’ll be paid by everyone not driving an e-car, including those riding public transit, or who can’t afford a car.
Or, more fairly, we could encourage people to lower their car-caused carbon emissions by imposing taxes on carbon fuels, taxes which people can avoid or reduce by taking public transit, buying a more fuel-efficient car – or in the five provinces with clean grids – going electric.
The bottom line is that cutting emissions is going to take both smart carbon regulation and smart carbon taxes.
That’s why the federal government’s plan, though carbon taxes are front and centre, includes regulation of everything from building codes to fuel standards to phasing out coal-fired electricity by 2030. But it’s also why, despite its anti-carbon tax rhetoric, Alberta has imposed carbon pricing on the oil industry and is encouraging cleaner electricity production through carbon pricing.
It’s not an either/or proposition.