Canada has some proud history on global environment action and diplomacy. It was the birthplace of the Intergovernmental Panel on Climate Change and the Montreal Protocol, the global treaty that has been instrumental in addressing ozone depletion.
More recently, rising emissions and withdrawal from the Kyoto Protocol have led many to ask whether Canada is now a barrier to effective global action on climate change. Given the parallels that are being drawn between Canada and the new Australian government’s policy, The Climate Institute’s Erwin Jackson asked a few questions of PJ Partington, technical and policy advisor for climate change at Alberta-based Pembina Institute, a research and advocacy non-profit organisation.
ERWIN JACKSON: Firstly, let’s start with the basics. What has been happening to Canada’s greenhouse emissions in recent times and what are the main drivers behind these changes? How much has the tar sands oil industry have to do with this change?
PJ PARTINGTON: Despite international promises to limit them, Canada’s greenhouse gas emissions have grown rapidly since 1990. By 2007, they had grown by 27 per cent, to their highest level yet. As in most countries, the global recession caused pollution to fall temporarily. But now Canada’s emissions are back on the rise. The federal government expects that under current policies, they will continue to grow rather than shrink.
Provincial actions like Ontario’s phase-out of coal power and British Columbia’s carbon tax – as well as federal measures like harmonising fuel economy standards with the Obama administration – are slowing down this growth. But they are clearly not yet enough to reverse it and get emissions headed in the right direction.
The oil-sands sector is Canada’s fastest-growing source of greenhouse gas emissions and an unmistakably dominant player in the trends. Projected growth in oil-sands emissions will effectively cancel out all reductions made across the rest of the economy.
EJ: In line with the US, Canada has committed internationally to reduce emissions by 17 per cent below 2005 levels by 2020. What policies is the national government implementing to achieve these goals? A national carbon limit and price is not on the horizon at the moment and has any analysis shown that Canada can meet its 2020 and longer-term targets without this kind of policy?
PJP: The governing Conservatives have bounced around a lot on climate change policy. In the eight years they've been in power, they have drifted from an intensity-based national carbon pricing system, to a proposed cap-and-trade system with the US to, more recently, deciding to completely and vocally oppose all forms of carbon pricing.
Their current approach is to craft regulations for each individual sector of the economy, one by one. So far they have covered vehicles and coal power, but progress is extremely slow. The result is that Canada is now stuck with an incomplete patchwork of standards and provincial efforts, and nobody can credibly say that we're on track to fulfill our commitments on climate change – commitments which the Harper government set itself.
EJ: There has been some speculation recently that the lack of effective action in Canada to reduce emissions has been raised by US President Obama in the context of whether or not the US government will approve a new oil pipeline that is important to the Canadian oil industry. Do you think Canada’s lack of effective climate action is having an impact its broader policy objectives internationally.
PJP: It certainly has not helped. The friction over the proposed pipeline is one example of how Canada’s poor climate performance, particularly in the oilsands, is causing market access troubles for those products. Low carbon fuel standards in jurisdictions like California and the EU are others. Unless we get our environmental house in order, these challenges are only going to grow.
In terms of broader policy objectives, the loss of credibility certainly undermines our ability to help negotiate an effective global climate agreement.
EJ: While there is not currently a federal carbon price in Canada, a number of provinces like British Columbia, Quebec and Alberta have various forms of carbon pricing. Can you give us a bit of an overview of these schemes and their successes and failures?
PJP: British Columbia is a great example. Since 2008, they have had a tax on all greenhouse gas emissions from fossil fuel combustion (covering about 70 per cent of total emissions). It was introduced in steps, with the rate growing at $5 per year* until it reached $30 per tonne in 2012. The tax is revenue neutral by law, so the government must return all revenue in the form of personal and corporate tax cuts. Early results show that BC’s carbon tax has been very successful to date – cutting emissions without harming the economy. Importantly, it’s also beginning to serve as a model for others.
Other carbon pricing approaches in Canada include Alberta’s baseline-and-credit system for large polluters and Quebec’s cap and trade system, which will be formally linked with California’s in the new year.
EJ: The baseline and carbon penalty scheme that operates in Alberta is in some respects similar to what the new Australian government's national carbon policy could evolve into. What impact has this scheme had on emissions and investment in low emissions technology? What lessons have been learnt from its design and implementation?
PJP: As with any climate policy, stringency is key. Alberta’s system is interesting, but it simply isn’t strong enough yet to have a significant impact on emissions growth.
Major facilities are responsible for reducing their net emissions per unit of production by up to 12 per cent from their historic level, either through in-house improvements, emissions trading, offset purchases or payments into a technology fund at a fixed rate of $15 per tonne.
The weak intensity target, low carbon price, and unfettered access to offsets, all limit the incentive to invest in significant low emissions technology. The technology fund has raised about $70 million per year for additional investments, but this will have a very limited impact in the near term.
With this system in place, Alberta’s emissions – already the highest in the country – are expected to grow by 27 per cent about the 2005 level. In per-capita terms, Alberta’s emissions will grow slightly from current levels. At 64.9 tonnes per person, they are projected to be more than three times the national average of 20 tonnes per person by 2020.
EJ: Finally, has the prospect of Australia repealing its carbon price and emissions limit impacted at all in Canada? Are you concerned about the impact this may have on effective climate policy in Canada in the future?
PJP: Australia’s past progress on carbon pricing was encouraging here in Canada, as in many ways our two countries are very similar.
Unfortunately, some of those opposed to carbon pricing have seized on the prospect of repeal in Australia as evidence that that carbon pricing been a failure. This is a shame, considering that we have examples of successful systems within our own borders.
If we're going to have a constructive conversation about climate solutions, we've got to be honest about what the options are. By demonising carbon pricing, Canada's government has really backed itself into a complicated, second-best approach to reducing emissions. Where we are headed now has got everybody, including industry and the provinces, scratching their heads.
The good news is that some jurisdictions are trying to change this. Quebec’s work to link its trading system with California and British Columbia’s recent agreement with California, Oregon and Washington are both examples of the growing regional coalitions looking to change national conversations around climate action in North America.
*All currency references are in Canadian dollars. $C1 equals $A1.02
Erwin Jackson is deputy chief executive of think tank The Climate Institute.