British Columbia's carbon tax has resulted in a 17.4-per-cent reduction in greenhouse gas emissions, according to a new study being released Wednesday as premiers gather in Niagara-on-the-Lake, Ont., to discuss a national energy strategy aimed at – among other things – lowering carbon emissions.
The premiers' energy agenda has been dominated by discord: British Columbia opposes a pipeline from Alberta to its coast, while Quebec is embroiled in a dispute with Newfoundland and Labrador over hydroelectric power from the Churchill River.
But the provincial leaders say they are committed to moving forward with an integrated approach to climate change, even as several pursue new regulatory regimes either in collaboration with Ottawa or alone. But the premiers have shied away from discussing the contentious issue of carbon pricing.
Business leaders – including the Council of Canadian Chief Executives – have endorsed a national carbon pricing scheme, hoping to avoid a balkanized system of climate regulations. But the Harper government is pursuing a regulatory approach for industry, and will likely give each province the right to set its own rules so long as they meet federal targets for emission levels. Ottawa is due to release proposed rules for the oil and gas sector later this year.
In a report to be released Wednesday, the Ottawa-based think tank Sustainable Prosperity argues British Columbia's carbon levy has not only succeeded in reducing emissions in that province, but has done so without impairing economic growth. Because the B.C. government reduced other taxes as it imposed the carbon levy, taxpayers in the provinces have actually benefited, the study said.
Between July 1, 2008, and July 1, 2012, the greenhouse gas emissions in B.C. fell 17.4 per cent, while they rose in the rest of the country by 1.5 per cent over the period, the report found. At the same time, B.C.s economy slightly outperformed the rest of the country.
"B.C. took a risk and it's been an environmental and economic success," said Stewart Elgie, co-author of the report and a founder of Sustainable Prosperity. "We can have a cleaner environment without hurting the economy if we have smart policies. Taxing pollution and lowering taxes on income is the best way to build an economy that is greener and stronger."
Mr. Elgie acknowledged that the premiers are reluctant to discuss carbon taxes or a national approach to put a price on carbon emissions, even though they say they are committed to pursuing a harmonized strategy.
Indeed, the premiers are likely to make little progress on the proposed strategy after three of them – Alberta's Alison Redford, Manitoba's Greg Selinger and Newfoundland's Kathy Dunderdale – agreed last year to work on it together. Instead, they are expected to launch a national process to consult Canadians, delaying any real decision making for another year.
In a release Tuesday, Premier Redford said it is critical to make progress on an energy strategy.
"It is crucial that we have a forward-thinking strategy that ensures the entire country remains an energy leader," she said.
The country's power utilities are also keen to see movement toward greater inter-provincial co-operation on electricity generation and transmission, even as Quebec and Newfoundland battle over Churchill Falls and the new development on the Lower Churchill River.
While premiers talk about better co-operation on delivering energy and the need for innovation, little progress is being made on the ground, said Jim Burpee, president of the Canadian Electricity Association.
"We need to figure out how to work together to pursue opportunities" rather than each province running its electricity system in isolation, he said.
That does not mean building a national electricity grid, but does mean expanding inter-connections where they make economic sense.