First off, I apologize for the inexcusably long time between posts. From now on I hope to post at least once a week (still not good enough, I know). This is Part II of our look at the climate change reduction efforts (or lack thereof) of Canada, our fascinating yet sometimes forgotten neighbor to the north.
In Canada, Part I we looked at the federal government’s failure to pass GHG reduction legislation. As a result, Canada has NO hope of meeting its 2012 Kyoto targets. (This begs the question of what is better: refusing to adopt the Kyoto Protocol, as the United States did, or enthusiastically adopting Kyoto but doing nothing to meet the reduction goal, which is Canada’s situation.)
Federal failure has allowed Canadian provinces to assume a leadership position, just as the Bush administration’s failure to combat climate change has made California the lead innovator in this country. So Canada currently features a GHG reduction free-for-all; or, to put things more positively, Canada is in the midst of local experimentation that will show us which tool(s) should be applied in the effort to avert climate change’s worst effects.
On one end of the spectrum, British Columbia has a carbon tax. The tax is the first of its kind in North America, coming into force in July 2008 and applying to vehicle and heating fuels. But the tax could hardly be called Pigouvian – that is, at a few cents per liter of gas, it is not high enough so that the full environmental cost of burning a gallon of gasoline is reflected in the price of gas. Yet according to a recent poll, only 41 percent of British Columbians support the tax, which has become a major issue in an upcoming provincial election (of course, a tax that does not reflect the true environmental cost of GHG emissions can still be difficult for ordinary people to bear, especially in these trying times).
For whatever reason (ideology?), taxes are an unpopular tool for achieving GHG reductions, although many economists support them. Somewhat less controversial than taxes is a cap-and-trade system, a kind of indirect and elaborate tax which is in the works in at least four provinces: Ontario, Manitoba, Quebec and British Columbia. All four are members of the Western Climate Initiative, a crossborder agreement between provinces and American states lacking the blessing of federal officials in Washington or Ottawa. The WCI is the most ambitious of the GHG reduction regimes currently in the implementation stage in North America. While the Regional Greenhouse Gas Initiative only covers emissions from the electric power sector, the WCI aims to reduce emissions from driving, home heating, and commercial and industrial activities, in addition to emissions from power generation. The WCI’s reduction goal is modest – a 15 percent emissions reduction from 2005 levels by 2020. But the real aim is to embarrass the U.S. and Canadian governments into action, with the hope that leadership from two of the biggest emitters in the West will lead to commitments from China and India, whose ever-increasing emissions, if not eventually subjected to a cap, will neutralize any reductions from the developed world.
Returning to the Canadian provinces, Alberta is situated at the other end of the doing-something-about-climate-change spectrum. In fact, it is doing nothing. To be fair, Alberta thinks it is doing something – by 2050, it wants to reduce emissions by 50 percent below the business as-usual-level, which is the emissions level that would result if absolutely nothing were done. Such a reduction would bring emissions to 14 percent below 2005 levels (compare to President-elect Obama’s goal of reducing U.S. emissions 80 percent by 2050). Alberta’s plan indicates that it will not commit itself to GHG reductions anytime soon. And understandably so – Alberta’s economy is anchored to the oil and gas industries, and Alberta emits more GHGs than any other province despite having only the fourth-largest population. If anything, Alberta actually hopes to ratchet up its emissions, touting its oil sands – exploitation of which occasions greater emissions than oil or natural gas recovery – as a way to wean the United States off Mideast oil.
This patchwork begs for federal intervention. Among the reasons: a GHG reduction regime in Canada won’t be effective without Albertan participation. GHG regulation in only a few provinces could create a pollution haven in Alberta – new polluting firms will locate there so as to avoid incurring the environmental costs of their activities. Any emissions decreases in other provinces will probably be neutralized by increased emissions from Alberta.
Provincial carbon taxes and WCI participation are best viewed as ways to embarrass the federal government into action. And action may come soon enough, with Barack Obama’s election spurring Canadian Prime Minister Stephen Harper into proposing a North American cap-and-trade system. And we could even see a national carbon tax proposal from the Liberal Party, which might soon unseat Harper’s Conservatives. But the key question domestically is: can the Liberals, in this economic climate, show backbone and impose meaningful regulation on Alberta given the economic opportunities presented by the oil sands?
The final word on Canada: a provincial kick in the butt, combined with Obama’s election and domestic political developments, should finally – finally – result in meaningful action. But with the country’s abandonment of its Kyoto targets, and its abundance of oil sands, should we lower our expectations for what Canadian GHG reductions will look like?