Updating carbon pricing in Canada: PBO Report , Supreme Court case, and provincial opt-outs

On October 8, the Office of Canada’s Parliamentary Budget Officer (PBO) released its latest report on carbon pricing, Carbon pricing for the Paris target: Closing the gap with output-based pricing . The report concludes that the government’s existing and announced policies and measures – including a carbon tax which rises to $50 per tonne in 2022 and an Output-Based Pricing System (OBPS) will not be sufficient to allow Canada to meet its emissions target under the Paris Agreement – 30 per cent below 2005 levels by 2030. The PBO models three complex scenarios to estimate that the level of the carbon price necessary to achieve the Paris target ranges from $67 per tonne to between $81 and $239 per tonne.

A critique by Clean Prosperity , a Toronto NGO focused on carbon tax research and education,  finds two of the PBO scenarios “unrealistic” and calls for a fourth approach, which transitions the industrial output-based pricing system to economy-wide pricing plus a border carbon adjustment. Clean Prosperity concludes:  “The bottom line is that carbon pricing works and should continue to increase after 2022 at roughly the same level as today in order to help us meet our Paris targets.”  Clean Prosperity promises to  release its own modelling of such an approach “in the near future”.

The report was released while a constitutional challenge to the federal carbon pricing system is still before the Supreme Court, and does not reflect the September 20 announcement that “The Government of Canada will stand down the federal carbon pricing system for industry in Ontario and New Brunswick as of a date in the future.” (that date and formal change to the systems to be determined in consultation with each province.) 

Smart Prosperity (a University of Ottawa research centre)  posted a blog and a report Ontario’s Options: Evaluating How Provincial Carbon Pricing Revenues Can Improve Affordability on October 8 .  Smart Prosperity has published a number of relevant working papers, including : Environmental Taxes and Productivity: Lessons from Canadian Manufacturing  (April 2020);  Border Carbon Adjustments in Support of Domestic Climate Policies: Explaining the Gap Between Theory and Practice (Oct. 2019) and Do Carbon Taxes Kill Jobs? Firm-Level Evidence from British Columbia in March 2019.  Canada’s Ecofiscal Commission also researched and published numerous reports (archived here ) before it closed its doors in November 2019.

B.C. Budget delivers $902 million to fund Clean B.C. initiatives

BC government news open micThe government of British Columbia tabled its Budget on February 19- officially detailed in  Making Life Better- A Plan for B.C. 2019/20 — 2021/22 .  As summarized by the National Observer article, “B.C. provincial budget funds nearly $1 billion for climate action” , it included $902 million  over the next three years to support the 2018 Clean B.C. Plan . Here are some of the big-ticket items:  $107 million for transportation initiatives – mostly providing incentives for zero-emission vehicle purchases (up to $6000 per vehicle) and funding for new charging stations;  $58 million for making homes and commercial buildings more energy efficient – as a result, homeowners can get up to $14,000 for energy efficiency improvements such as  switching to high-efficiency heating systems or upgrading their doors or  windows. $168 million is dedicated to funding  an incentive program to encourage large industrial polluters to reduce their emissions; $15 million is dedicated to help remote communities transition to clean energy solutions, and  $299 million is unallocated as yet. In addition to the Clean B.C. funds, the budget includes $111 million over three years to fight and prevent wildfires, another $13 million for forest restoration, and $3 million for the BC Indigenous Clean Energy Initiative, to help First Nations communities build clean energy projects.

Reaction has generally been positive – for example, from Clean Energy Canada . The Canadian Centre for Policy Alternatives B.C. Office, in “Nine things to know about the B.C. Budget” commends the  $223 million which is  budgeted to increase the climate action tax credit for low- and middle-income earners, but says, “action needs to be ramped up further—and fast”.  CCPA’s  Special  Pre-budget Feature  included an essay by Marc Lee “Expand climate initiatives to reflect the urgency of the crisis”  (Feb. 1). Lee had called for the  reinstatement of  annual increases to the carbon tax, beginning in 2019 with an increase of $10 per tonne – but no such policy was announced. (Lee had also called for more realistic budget allocations for wildfire response, which was addressed).

Finally, the Pembina Institute response is generally positive, though it calls for an independent panel to publicly monitor accountability and report on progress annually, echoing the Op-Ed “wish list” it had released before the budget was handed down.  . That had  stated: “B.C.’s Climate Change Accountability Act needs more teeth. What’s required is a transparent process whereby the government forecasts carbon pollution (including reduction goals for each sector), tracks and publicly reports on our progress, submits this data for independent verification, and adjusts policies as necessary.”   Other key items which Pembina had called for include  stronger regulations than those announced in January to limit methane pollution, and a strategy to use clean electricity to power the controversial LNG production which threatens to make the province’s GHG emissions targets unreachable.

Economists weigh in on deceptive carbon pricing messages

Economist Brenda Frank contributes to the ongoing battle of ideas about carbon pricing in Canada with his  January 9 blog : “Carbon pricing works even when emissions are rising”. Frank begins:  “An old, debunked argument against carbon taxes has flared up recently: If total emissions aren’t falling, the tax must not be working. Let’s quash that myth.”  Continuing the arguments he published in a 2017 blog, “The curious case of counterfactuals”, his central question is, “if emissions are still rising, how fast would they have been rising without a carbon price?”  He cites recent studies, such as “The Impact of British Columbia’s Carbon Tax on Residential Natural Gas Consumption” (in  Energy Economics, Dec. 2018), as well as  the extensive carbon pricing reports produced by the Ecofiscal Commission, most recently Clearing the Air: How carbon pricing helps Canada fight climate change (April 2018).  The  conclusion: carbon pricing is more “complicated than something you can fit in a tweet”, and  complex analysis demonstrates that it does work.

Marc Hafstead , U.S. economist and Director of the Carbon Pricing Initiative pursues a similar theme in  “Buyer Beware: An Analysis of the Latest Flawed Carbon Tax Report” ( November 28).   Hafstead contends that “some papers can introduce confusion and misinformation”, and demonstrates how this is done in  The Carbon Tax: Analysis of Six Potential Scenarios , a study commissioned by the Institute for Energy Research and conducted by Capital Alpha Partners.  Hafstead critiques the modelling assumptions and concludes they are flawed ; he also charges that the paper fails to explain its differences from the prevailing academic literature.

Even without Hafstead’s economic skills, one might be wary of the U.S. paper after a check of the DeSmog’s  Global Warming Disinformation Database , which provides mind-blowing detail about the financial and personnel connections between the Institute for Energy Research and  Koch Industries . DeSmog maintains records on organizations and individuals engaged in “climate change disinformation” in the U.S. and the United Kingdom.

New B.C. Plan weds a clean economy with economic growth and worker training

cleanbc logoBritish Columbia’s long-promised climate plan, CleanB.C.  was released on December 5. The press release summary is here , details are in a 16-page Highlights Report . Top-line summary: the CleanBC plan is at pains to emphasize that it is a plan for economic growth as well as a cleaner environment.  B.C.’s existing carbon tax will increase $5.00 per year from 2018 to 2021, with rebates for low and middle income British Columbians and support for clean investments in industry.  CleanB.C. repeats some already announced initiatives, such as the the zero-emissions vehicle sales mandate and ZEV consumer incentives,  and the requirement for new buildings to be  “net-zero energy ready” by 2032.  Publicly-funded housing will benefit from $400 million to support retrofits and upgrades.  Cleaner operations by industry will target a 45% reduction of methane emissions from upstream oil and gas operations , and incentives “will provide clean electricity to planned natural gas production in the Peace region”.  There is also support through “a regulatory framework for safe and effective underground CO₂ storage and direct air capture “.

CleanB.C. recognizes the needs of workers.  From the Highlights: “As new jobs and professions emerge, post-secondary education and training need to keep pace. The Province is working with employers, Indigenous communities, labour groups and postsecondary institutions to analyze the labour market and identify: -where the strongest job growth is likely to be, – what skills are needed to meet the demand, – what specific training we need to develop and deliver in our communities, and – what support students and apprentices need to excel in these programs. As a first step, we are investing in two key sectors where we already know demand is strong and growing – cleaner buildings and cleaner transportation:  – Developing programs like Energy Step Code training and certification and Certified Retrofit Professional accreditation – Expanding job training for electric and zero-emission vehicles.” The government also states it is developing a  CleanBC Labour Readiness Plan, which is part of the reason that  Unifor responded with “Unifor supports introduction of Clean B.C. Plan”.  Laird Cronk, president of the  BC Federation of Labour calls the new strategy an “historic opportunity” to develop a sustainable economy, and states: “We’re committed to working together on just and fair transition strategies to protect existing workers and to ensure that new employment opportunities created by the CleanBC plan are good, family- and community-supporting jobs.”

The general acclaim for Clean B.C. is compiled in a Backgrounder at the B.C. government website, with statements from politicians, environmentalists, business leaders, First Nations, labour unions, and academics- among them,  Marc Jaccard from Simon Fraser University, who states:  “This plan returns B.C. to global climate leadership.” From other sources:  Clean Energy Canada:  “CleanBC marks a turning point for B.C.’s environment and economy”  (Dec. 5);  The Broadbent Blog , which singles out the exemplary commitment to equity and reconciliation with First Nations people; the Pembina Institute, “B.C. climate plan sets a course to Canada’s clean future”   and  “Five bright spots in B.C.’s new climate plan”, which highlights the importance of the accountability mechanism.   The David Suzuki Foundation   calls it a “Big Step Forward”, but points out that there is more to be done – a Phase 2 is needed.

The Phase 2 of further initiatives (and implementation legislation ) are promised. The  Government clearly admits that the initiatives announced on December 5 will only  achieve 18.9 Mt GHG reduction, leaving a 25% gap with what is required by the  legislated target for 2030 ( 25.4 Mt GHG from a 2007 baseline).

The response from West Coast Environmental Law  applauds and endorses CleanB.C. and its accountability measures, but raises the elephant in the room question:  “We know that the Province needs to go further: the map set out in CleanBC is not complete, nor does it go far enough. Some recent decisions, for example on LNG, are difficult to square with this climate plan”.  This big LNG question also appears in “Critics question B.C.’s LNG pursuit in wake of climate plan announcement” (updated on December 6), stating that “ the already-approved LNG export facilities — LNG Canada and Woodfibre in Squamish — would take up almost all of B.C.’s allowable carbon footprint under the current targets.”  The government’s current LNG Framework   was released in March 2018 , allowing the approval of a controversial  $40-billion LNG project centred in Kitimat  in October 2018.  At that time, the Green Party leader linked his Party’s support for the clean growth strategy and promised the Greens “would have  more to say” about LNG after the Clean Growth strategy was finalized.

B.C. consultation on “Clean Growth” policies for transportation, industry, and the built environment

Flag_of_British_Columbia.svgWhile British Columbia is understandably preoccupied with the devastating wildfires raging across the entire province, an engagement process called Towards a Clean Growth Future in B.C.  was launched on July 20, with a short, summertime deadline of August 24.

Three brief Intentions Papers have been published to solicit public input : Clean Transportation ,which discusses policies to incentivize Zero Emissions Vehicles – including the possibility of a ban the sale of new gasoline and diesel light duty vehicles by 2040;  Clean, Efficient Buildings,  which proposes five steps to cleaner buildings, including Energy efficiency labeling information, financial incentives, and additional training for workers in energy efficient retrofitting and in the new-build Energy Step code; and A Clean Growth Program for Industry , which includes the province’s Industrial Incentive under the carbon tax regime and addresses the potential dangers of “carbon leakage”.

Public Submissions are available online  and to date have been submitted by: Canadian Centre for Policy Alternatives (CCPA), written by Marc Lee ; Closer Commutes ;   The Wilderness Committee ; and  The Pembina Institute , which at 37 pages is extremely detailed, and includes 5 recommendations relating to Training and Certification for Clean Buildings,  including  a call for “a construction labour strategy that addresses skilled labour gaps and equity issues in the building industry. Integrate with emerging technology and innovation strategy to foster greater use of automation and prefabrication.”

The West Coast Environmental Law Association (WCEL)  also posted a thorough discussion of the Clean Growth proposals on its own website on August 16.  “BC’s decade-delayed climate strategies show why we need legal accountability” by Andrew Gage notes that the intentions papers are largely built on existing proposals (some dating back to the 2008 Climate Action Team  Report ), and that they are not complete, as the government is also developing proposals through its  Climate Solutions and Clean Growth Advisory Council  and the newly appointed Emerging Economy Task Force .  (The Wilderness Committee calls the proposals “underwhelming”). Whatever the final policies that flow from these consultations, WCEL emphasizes the importance of demanding accountability, and like Marc Lee in his submission, points to the success of the U.K.’s Climate Accountability Act (2008). WCEL has previously critiqued  Bill 34, B.C.’s  Climate Change Accountability Act which received Royal Assent on  May 31 2018.

Another commentary, appearing in the National Observer (July 27) addresses the weakness of the transportation proposals.  “B.C.’s climate plan needs a push – from you”  refers to the author’s more detailed report, Transportation Transformation: Building complete communities and a zero-emission transportation system in BC , which was published by the CCPA in 2011.

The CCPA also published an article on August 2, 2018 in Policy Note:  “The Problem with B.C.’s Clean Growth climate rhetoric” . Author Marc Lee reviews the history of the term “clean growth” and offers his critique, noting that clean growth “promises change without fundamentally disrupting the existing economic and social order.”

Individuals have until August 24 to can email their input to clean.growth@gov.bc.ca .

The new British Columbia government tackles climate change policy and controversies: Site C, Kinder Morgan, and Carbon Tax neutrality

As the smoke from over 100  forest fires enveloped British Columbia during the summer of 2017, a new brand of climate change and environmental policy emerged after June 29, when the New Democratic Party (NDP) government assumed power , thanks to a Confidence and Supply Agreement with the Green Party Caucus.  Premier John Horgan appointed Vancouver-area MLA George Heyman, a former executive director of Sierra Club B.C. and president of the B.C. Government Employees and Service Employees’ Union, as Minister of Environment and Climate Change Strategy, with a mandate letter which directed Heyman to, among other priorities, re-establish a Climate Leadership team,  set a new 2030 GHG reduction target, expand and increase the existing carbon tax, and “employ every tool available to defend B.C.’s interests in the face of the expansion of the Kinder Morgan pipeline.”  A separate mandate letter to the Ministry of Energy, Mines and Petroleum Resources, directed the Minister to create a roadmap for the province’s energy future, to consider all Liquified Natural Gas proposals in light of the impact on climate change goals, to freeze hydro rates and to  “immediately refer the Site C dam construction project to the B.C. Utilities Commission on the question of economic viability and consequences to British Columbians in the context of the current supply and demand conditions prevailing in the B.C. market.” In addition, the government “will be fully adopting and implementing the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), and the Calls to Action of the Truth and Reconciliation Commission.”

Some notes on each of these priorities:

Re the B.C. Climate Leadership Plan The recommendations of the B.C. Climate Leadership Team were ignored by the Liberal government when delivered in 2016.  In mid-September 2017, the reasons for that became clear, as reported by the National Observer , DeSmog Canada, Rabble.ca and Energy Mix . According to the National Observer,  “provincial officials travelled to Calgary to hold five rounds of secret meetings over three months in the boardroom of the Canadian Association of Petroleum Producers (CAPP). Representatives from Alberta-based oil giants Encana and Canadian Natural Resources Ltd (CNRL) are shown on the list of participants meeting with B.C.’s ministry of natural gas development.”  In the article for DeSmog Canada, Shannon Daub and Zoe Yunker state that the Climate Leadership process was a stunning example of institutional corruption: “what can only now be characterized as a pretend consultation process was acted out publicly….  The whole charade also represents an abuse of the climate leadership team’s time and a mockery of B.C.’s claims to leadership during the Paris climate talks, not to mention a tremendous waste of public resources.”  The documents underlying the revelations were obtained under Freedom of Information requests by Corporate Mapping Project  of the Canadian Centre for Policy Alternatives, of which Shannon Daub is Associate Director.

Re the  Carbon Tax:  The Budget Update released on September 11 states: “The Province will act to reduce carbon emissions by increasing the carbon tax rate on April 1, 2018 by $5 per tonne of CO2 equivalent emissions, while increasing the climate action tax credit to support low and middle income families. The requirement for the carbon tax to be revenue-neutral is eliminated so carbon tax revenues can support families and fund green initiatives that help us address our climate action commitments.” For context, see “B.C. overturns carbon tax revenue-neutrality”  (Sept. 22) by the Pacific Institute for Climate Solutions;  for reaction, see the Canadian Centre for Policy Alternatives-B.C. or the Pembina Institute .

Re the Kinder Morgan Trans Mountain Pipeline:  On October 2, 2017, the Federal Court of Appeal  is scheduled to start the longest hearing in its history, for the consolidated challenges to the National Energy Board and Federal Cabinet approval of Kinder Morgan’s Trans Mountain Project.  The government has applied for intervenor status, and in August  hired environmental lawyer and former B.C. Supreme Court Justice  Thomas Berger as an external legal advisor on the matter.  West Coast Environmental Law blogged, “See you in court, Kinder Morgan” , which provides a thorough summary of the 17 cases against the TransMountain expansion; WCEL has also published a Legal Toolbox to Defend BC from Kinder Morgan, which goes into the legal arguments in more detail.  The NEB website provides all official regulatory documents. Ecojustice is also involved in the complex court challenge.

Re the Site C Dam:  In early August, the B.C. government announced a review of the Site C project by the B.C. Utilities Commission.  The Preliminary Inquiry Report was released on September 20,  calling for more information before passing judgement on whether BC Hydro should complete the project. The Inquiry Panel also finds “a reasonable estimate of the cost to terminate the project and remediate the site” would be $1.1 billion, based on the figures provided by BC Hydro and Deloitte consultants. The Inquiry report is  summarized by  CBC . Next steps:  a series of round-the-province hearings and final recommendations to government to be released in a final report on November 1.

After years of protests about Site C, evidence against it seems to be piling up. A series of reports from the University of British Columbia Program on Water Governance, begun in 2016, have addressed the range of issues involved in the controversial project : First Nations issues; environmental impacts; regulatory process; greenhouse gas emissions; and economics.  In April, an overview summary of these reports appeared  in Policy Options as  “Site C: It’s not too late to hit Pause”,  stating that Site C is “neither the greenest nor the cheapest option, and makes a mockery of Indigenous Rights in the process.”   On the issue of Indigenous Rights, the UN Committee on the Elimination of Racial Discrimination called for a halt on construction in August, pending a full review of how Site C will affects Indigenous land.

If Site C is a good project, it’s time for Trudeau to trot out the evidence” in  iPolitics (Sept. 17), calls Site C “an acid test for Trudeau’s promise of evidence-based policy” and an environmental and economic disaster in the making.  The iPolitics article summarizes the findings of a submission to the BC Utilities Commission review by Robert McCullough, who concluded that BC Hydro electricity demand forecasts overestimate demand by 30%, that its cost overruns on the project will likely hit $1.7 to $4.3 billion, and that wind and geothermal are cleaner alternatives to the project. McCullough’s conclusions were partly based on his review of the technical report by Deloitte LLP, commissioned by the Inquiry.

 

Carbon Pricing now covering 13% of global GHG emissions; Canadian and U.S. developments

The World Bank released  the State and Trends of Carbon Pricing 2016 report on October 18,  which  measures the growing momentum of carbon markets: in 2016, 40 national jurisdictions and over 20 cities, states, and regions are putting a price on carbon, including seven out of 10 of the world’s largest economies.  About 13 percent of global GHG emissions are now covered by carbon pricing initiatives.  Drawing on new economic modelling, the report also predicts that this coverage could increase by the largest leap ever in 2017, to between 20 – 25 percent,  if the Chinese national Emissions Trading System (ETS) is implemented in 2017 as planned .

Carbon pricing in Canada continues to draw opinion and reaction, including  from Toby Sanger, a Senior Economist at CUPE and  a member of the Federal Sustainable Development Advisory Council, who reiterates a call for Just Transition and equity considerations in “How to offset the hardship of carbon pricing”  in the Ottawa Citizen (Oct. 6) . Andrew Gage at West Coast Environmental Law (Oct. 17) asks important questions about the price levels, scope, and timing of the national carbon price proposals currently under consideration  in “Will Canada’s national carbon price clean up our climate mess?” . His blog includes consideration of the impact  on B.C., and sends a message for  Saskatchewan: “So suck it up, Mr. Wall – it’s time to pay the carbon price and get on board with a national plan to deal with Canada’s climate mess”.   And a blog from Keith Brooks at Environmental Defence takes issue from an Ontario viewpoint with a recent Fraser Institute criticism of the Trudeau carbon pricing proposal in “Stupid or Just Lying? What’s up with the Fraser Institute?” (Oct. 13).

In the U.S., all eyes are on the State of Washington, where a ballot question in the November 8 election will decide whether Washington becomes the first state in the U.S. with a  carbon tax.   The Washington Carbon Emission Tax and Sales Tax Reduction question, known as Initiative 732 (I-732)  is modelled after B.C.’s carbon tax, but has divided traditional left and environmental allies, with the Alliance for Clean Jobs and Energy and the Washington District Labor Council opposed to the initiative, and the Sierra Club and others taking a “do not support” position.   For background, see the excellent overview (with links) at Ballotpedia, or “How a tax on carbon has divided Northwest climate activists” in the Los Angeles Times (Oct. 13) .

Proposals for carbon pricing designs:    A new policy brief released by the Centre for International Governance Innovation (CIGI)  in Waterloo, Ontario  proposes  a carbon-fee-and-dividend (CFD) program , which has been advocated by the Citizens’ Climate Lobby.  How the United States Can Do Much More on Climate and Jobs  envisions a federal program which would  collect a carbon fee from coal, oil and natural gas producers and importers, and distribute  all the revenue (after administrative costs) directly to American households in equal per capita monthly dividends.   To address fears of carbon leakage, the  program would include a border adjustment,  authorizing  a special duty on imports from countries lacking equivalent carbon pricing.   The paper concludes with arguments as to why this is the most likely- to- succeed political option.

Another U.S. discussion paper, from Resources for the Future,  Adding Quantity Certainty to a Carbon Tax, defines and discusses  the multitude of design elements for a Tax Adjustment Mechanism for Policy Pre-Commitment (TAMPP) –  which would adjust the tax rate of a carbon tax  at intermediate benchmark points if emissions reductions deviate sufficiently to threaten the long-term targets . The paper argues that the approach should be rule-based with a clear and transparent adjustment process to reduce unnecessary uncertainty for investment.

 

 

New B.C. Climate Leadership Plan leaves carbon tax untouched

Months later than scheduled, the Government of B.C. released its Climate Leadership Plan   on August 19, claiming that it will create 66,000 green jobs and decrease carbon emissions by 25 MT by 2050. See the news release and backgrounders here .  The Plan largely ignores the 2015 recommendations of the government’s own Climate Leadership Team (CLT) and does not increase the carbon tax, to allow other jurisdictions to “catch up”.    It organizes its  21 “action items” into 6 areas —natural gas, transport, forestry and agriculture, the built environment, industry and utilities, and the public sector, and focuses on  electric vehicles,  energy efficiency in buildings,  carbon sequestration in the forestry industry,  and promised emission reductions in natural gas production.   The Pacific Institute for Climate Solutions (PICS) reviews each of these areas in its Initial Assessment: Part 1 here     and Part 2 here .  In   “3 Big Questions about British Columbia’s Climate Plan”    , Clean Energy Canada states that carbon reduction measures “aren’t backed up by either the dollars or the regulations” – resulting in emissions reductions that are likely to be approximately 2 MT, rather than the 25 MT that the Leadership Plan promises.

The tone of reaction is summed up by Tzeporah Berman’s Facebook posting:  “pathetic and cowardly”.  For more detailed reactions, see   “5 Things you need to know about B.C.’s new climate plan” from the Pembina Institute;    “B.C.’s Climate Plan reaches Olympian heights of Political Cynicism” , an OpEd by Marc Jaccard in the Globe and Mail;  “B.C. hesitates when it should lead” by the David Suzuki Foundation;  “Christy Clark gives up the Climate Change Battle” in The Tyee ;  “B.C. Climate Plan leaves hard work for another day” by the Pembina Institute , and “B.C. Climate Plan full of holes”    in the National Observer.

Is British Columbia losing its leadership position on Climate Change?

On May 10, the Chair of Canada’s Ecofiscal Commission wrote in the Globe and Mail  , urging Premier Clark to increase B.C.’s carbon tax and emulate the revenue transfers in the Alberta carbon tax structure.   Some members of the government’s own Advisory panel on Climate Leadership sent an Open Letter to the Premier   on May 17  (one year after the panel had delivered its recommendations  ), urging action and questioning the delays on their recommended initiatives.  The Open Letter coincided with an Opinion piece  in the Victoria Times Colonist, and an article by Tzeporah Berman (one of the signatories) in the National Observer  . For the best summary of the current state of climate progress in B.C., see the Pembina Institute/Clean Energy Canada backgrounder: Evaluating Climate Leadership in British Columbia   .

Where do unions stand on Carbon Markets?

In a Working Paper titled Carbon Markets After Paris: Trading in Trouble , Sean Sweeney, Coordinator of Trade Unions for Energy Democracy (TUED),  argues that it is time for unions to reevaluate their stance on emissions trading. He asserts a “Paris Contradiction” –   that the INDC’s targets from COP21 in Paris in December 2015 are not sufficient to reduce GhG emissions, and  are part of a “neo liberal fantasy”.  Focusing on Europe and the problems of the European carbon market ( the EU ETS), Sweeney criticizes the  European Trade Union Confederation for its “defensive approach (prevention of carbon leakage and the protection of existing jobs)”, and its continued participation in the Social Partnership framework. In his accompanying blog , he states:  “ Facing up to the the failure of carbon markets will allow unions and their allies to better concentrate on developing and organizing around the kind of programmatic commitments that can seriously tackle climate change and the systemic roots of the crisis…. by extending social ownership of key sectors like energy, a genuine ‘just transition’ is possible and that unions can play an important role in making it happen.”    Even outside the neo-liberal fold, Sweeney’s call to reject carbon markets is controversial.  The European Trade Union Confederation, subject of Sweeney’s criticism, most recently issued its  “Position on the structural reform of the EU Emissions Trading System”  in December 2015, reflecting a concern for “carbon leakage” but demanding a Just Transition Fund to protect workers.  The ETUC claims to have consulted widely amongst European labour unions to reach its position.   The Canadian Labour Congress, in the lead-up to COP21 stated (Nov. 2015)  “The Canadian labour movement supports a national cap and trade carbon-pricing system”, and the Canadian Union of Public Employees, in its response to the 2016 Federal Budget  states, “CUPE supports putting a price on carbon, but it must be done in a progressive way that penalizes corporate polluters rather than low-income and working Canadians. Revenues raised from carbon pricing should be used to invest in complementary green investments, job retraining, create green jobs, and to mitigate negative impacts of climate change and carbon pricing measures on vulnerable Canadians.”  See also  Marc Lee, “Don’t believe the Hype on B.C.’s Carbon Tax” (March 4), and in the U.S.,   the Center for American Progress called for an integrated North American carbon market on March 17.

A Clean Energy and Jobs Plan for B.C., based on more stringent Regulations

The government of British Columbia is scheduled to release its updated Climate Leadership Plan in December 2015. In November, Clean Energy Canada released  A Clean Economy and Jobs Plan for British Columbia   to contribute to those discussions. It characterizes the future as “not a revolution, but an evolution”, and summarizes its policy recommendations as having two core fundamentals: “Introduce and expand clean standards for vehicles, buildings and industry, and “Create a clean economy investment and tax rebate program.” The Jobs Plan document is based on commissioned research by Navius Research, A Plan for Climate Leadership in British Columbia: Forecasting the Benefits and Costs of Strengthening British Columbia’s Greenhouse Gas Policies . The Navius report provides the details of both the economic modelling, and the policy prescriptions. Those deep decarbonization policies include a carbon tax of at least $80 per tonne and stronger sector-specific regulations on buildings, transportation, energy supply, and industry – especially LNG production. Under such policies, Navius forecasts that BC will miss its 2020 emission target, (33% reduction in GHG emissions relative to 2007 levels), but can achieve its 2050 target ( 80% reduction in emissions relative to 2007).   The resource sectors are forecast to grow at 2% annually and remain important to BC’s economy, but more than 70% of future growth will occur in the service sector, (including healthcare, education, and technical and professional services). Because of the diversity of the economy, approximately 250,000 new jobs are predicted in the next ten years, with total jobs growing by 900,000 between 2015 and 2050.

Public Opinion about Climate Change policies: Alberta and Canada

In September, 2015  Pembina Institute released an opinion poll of Albertans, conducted by EKOS Research. Of the 1,885 respondents, 50% would support an economy-wide carbon tax, rising to 72% if the proceeds were invested in low-carbon projects; 70% want stricter enforcement of the existing environmental rules and safeguards in the oilsands; 70% support investing in renewables to reduce coal use, and 86% want the province to increase support for clean energy and clean technology.  
 
Other opinions were expressed at the 2015 Alberta Climate Summit, convened on September 9 by Pembina Institute. Discussions centred on the economy and jobs, carbon pricing, energy efficiency, and renewable energy.
 
The Climate Change Advisory Panel of the Alberta government invited submissions from Albertans in August and September. Views of individuals, companies, academics, advocacy groups and associations, and three labour unions are available: A list by name helps to locate items of interest amongst over 400 documents. The union submissions are: #94, by the International Association of Heat and Frost Insulators and Allied Workers Local 110 (Alberta); #387, by the Alberta Federation of Labour and #494, a 1-page statement by the Business Agent of International Union of Operating Engineers Local 955.
 
Environics Institute, partnered with the David Suzuki Foundation, released Canadian Public Opinion about Climate Change, showing that support for the B.C. carbon tax is at an all time high in that province, and has increased to 60% in other provinces – notably Atlantic Canada, and amongst women. 74% of Canadians say they believe it is possible for their province to shift most of its energy requirements from fossil fuels to clean renewable forms of energy.

Employment Impacts of Reinstating annual increases to B.C. Carbon Tax

 
A proposal made at the September 2015 convention of the Union of B.C. Municipalities called for a reinstatement of an annual increase to the provincial carbon tax, at the rate of $5 per tonne, with new revenues invested in local climate programs such as transit and infrastructure. The carbon tax had been structured with this annual $5 per tonne increase when it was introduced in 2008, but has been frozen at 2012 levels. Although the resolution was defeated by a narrow vote, the new economic impact research which supported it is of interest. Commissioned by the Pembina Institute and conducted by Navius Research, the modeling showed that the $5 per tonne annual increase would stimulate economic growth by an average of 2.1% per year until 2030, creating approximately 850,000 new jobs, reducing B.C.’s carbon pollution by 2.1 million tonnes, and saving households an average $1,200 per year.

CARBON TAXES: THE POPE’S MORAL POSITION AND THE SECULAR ANALYSIS

On the issue of carbon taxes, the Pope’s Encyclical of June 2015 was clear:   “The strategy of buying and selling “carbon credits” can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors. ” Yet economists continue to take an interest: new analysis by B.Murray and Nic Rivers, released by Duke University, reviews the studies to date on the economic effects of British Columbia’s carbon tax, and discovers “little net impact” either for or against economic growth in the province. See British Columbia’s Revenue-Neutral Carbon Tax: A Review of the Latest ‘Grand Experiment’ in Environmental Policy  . And in June, the Ecofiscal Commission released a brief, The Way Forward for Ontario: Design Principles for Ontario’s New Cap-and-Trade System  which outlines four fundamental principles of good cap-and-trade design for Ontario, based on their April report.

B.C. Carbon Tax Receives International Praise

While Ontario hasn’t stated whether it will choose a cap and trade system or a carbon tax, British Columbia`s carbon tax has received a  recent flurry of praise. In a December 8 speech  leading up to the COP Lima meetings, World Bank President Jim Yong Kim stated that “all countries should commit to put a price on carbon” and singled out British Columbia’s system as one of the most “powerful” examples…”It’s worth noting that British Columbia’s GDP has outperformed the rest of Canada’s after introduction of the tax”.
Read also: a Globe and Mail editorial of December 13, “Why Stephen Harper should Love Carbon Taxes”; Alberta Federation of Labour President Gil McGowan in “Cutting Emissions needn`t kill Jobs, Says Oilsands Labour” in The Tyee (December 8). Even well-established conservative Preston Manning, now part of the Ecofiscal Commission, appears to endorse the concept in a November 19 Globe and Mail article: “How to Communicate a Good Idea: Carbon Pricing”. Last word goes to Larry Sommers, former Secretary of the Treasury in the U.S., in his January article in the Financial Times titled “Let this be the Year we Put a Proper Price on Carbon”.

    For more factual information about carbon taxes and how B.C. has achieved revenue neutrality, see Proof Positive: The Mechanics and Impacts of British Columbia’s Carbon Tax, released by Clean Energy Canada in December. A new, much more detailed study of the effect of a carbon tax, modelling with various revenue structures, was released by the state of Oregon in December.