Understand Canada’s Carbon Pricing Plan

This October, Prime Minister Trudeau declared that all Canadian provinces have until 2018 to adopt a carbon pricing scheme, or the federal government will step in and impose one for them. While it shocked Newfoundland, most Canadians – 85% – live somewhere that already has a plan in place.

Yet, a lot of Newfoundlanders have strong opposition to carbon pricing, or else they aren’t sure what Carbon Pricing means. So here’s a guide.

What Is Climate Change and How Bad Is It Really? 

Air pollution from burning oil releases gasses, like CO2, that float up into our atmosphere, where they hover like a blanket and insulate the earth, so that heat can’t escape back up into space like it used to. Hence the term “greenhouse gasses” – these carbon-based air pollutants are making a greenhouse of the planet.

It’s a documented fact the world is warmer now than ever before: the 21st century has broken more temperature records than any century before it. Heat waves are steadily increasing, spreading wild fires, insect-borne disease, and crop-killing drought.

Warmer temperatures create nasty, damaging storms, because they breed torrential rains and hurricanes: tens of millions of people have to vacate their homes every year due to climate-related storms. That’s obviously very costly and disconcerting.

Warmer temperatures also melt polar ice caps – that’s not good for coastal towns like ours. The Montana Glacier National Park had 150 glaciers 100 years ago; now it has 25.

Politicians do a perfect job of scaring citizens into going along with the status quo of polluting because there’s money in it, but the truth is there’s also money and jobs in green energy too. Going greener will actually create jobs – someone has to build new hydro stations, wind farms, solar fields, etc.

Okay, Climate Change is Bad: What’s Trudeau’s Plan?

In 2016, the UN organized one of the largest diplomatic conferences ever, where 150 country leaders from all over the world got together to discuss one simple question: What the hell are we going to do about climate change? This overdue meeting in Paris has been dubbed “The last chance for the environment.”

Since coming home from those meetings, Trudeau and his Minister of Environment and Climate Change Catherine McKenna decided Canadian provinces must curb their carbon pollution, or pay a fee in direct proportion to how much they’re contributing to climate change. That fee will, in theory, inspire provinces and companies to go greener, because avoiding the carbon fee is good for business.

There are two ways a province – including ours – can do as Trudeau has demanded: Impose a Carbon Tax, or launch a Cap & Trade System. So it’s time to get planning.

What Is Carbon Tax?

A carbon tax is basically a fee placed on greenhouse gas emissions: it puts a price on each tonne of GHG an entity emits in a year.

This is already in play in BC, and they use the carbon tax revenue to reduce peoples’ personal taxes. Some people like the liberty in this system because going the Carbon Tax route doesn’t dictate how we ought to go about reducing greenhouse gas emissions – Company X can reduce fuel consumption, or it can increase fuel efficiency, or it can adopt new green technology. It can do whatever it wants, but it must do something, or pay a price for polluting. The goal isn’t to cripple a business financially, it is to financially motivate that business to pollute less by going greener.

What Is Cap and Trade?

Cap and Trade is, as it sounds, a two-fold ordeal.

The “cap” is the maximum allowable limit, measured in billions of tonnes of carbon emissions, that Company X can emit every year. With each passing year, this cap will be lowered at a reasonably attainable, predetermined rate, so companies can plan for it.

As for the “trade” aspect, basically, a provincial government sells pollution credits (aka quotas or allowances) that a company can use if they go over the provincial cap. All entities aim to pollute less than the provincial cap each year, but keen businesses that pollute under their provincial cap can sell their remaining carbon credits to a business that went over the provincial cap.

If “Yabba Daba Energy” was 80 tonnes under the provincial cap, they can sell those credits to a company that was 80 tonnes over. Yabba Daba just made money selling carbon credits – they got a financial reward for their environmentally conscious behaviour – and the other company was forced to buy carbon credits, and were in effect penalized for not shifting towards a greener corporate behaviour. This creates an incentive for entities to reduce their emissions, and be able to sell, rather than purchase, pollution credits.

What Is Better, A Carbon Tax, or Cap and Trade?

The beauty of either is that they both inspire companies and provinces to shift towards greener technologies by targeting what motivates every business on earth: watching their bottom line, avoiding excessive costs. With either system, it’s costly to pollute, and it pays to use green technologies that evade taxable carbon pollution.

So, either system will lead our province to greener pastures, and going greener will launch a self-fulfilling cycle that creates more demand for green energy, and innovation in the green energy sector for better products, and in turn, more jobs in building up a green energy sector (from, say, building a wind farm, to finding ways to make solar panels cheaper or more efficient).

One pro for Carbon Tax is that it’s easier and quicker for governments to implement. And compared to the Cap and Trade system, carbon tax is less prone to evasive lobbying and loopholes. One pro for Cap and Trade is that the cap provides more certainty about how much emission will be reduced.

What is NL Leaning Towards?

It’s early days, so who knows. All our premier has done so far is advise our Minister of Environment to storm out of a federal meeting where Canada’s “Adopt a Climate Pricing Scheme by 2018 Or I Will Do It For You” ultimatum was revealed.

Premier Ball claims his beef is that Newfoundland was already at work on a plan, and Trudeau’s new ultimatum threw a wrench in it. Ball seems worried that carbon pricing could increase many costs in the province, and in expressing those fears, he’s doing what politicians do well: using financial woes to perpetuate status quos. The fact is, no one likes change, it’ll be a bit of work, but civilization has survived much wilder things than changing how they heat their homes.

If This Was a Crazy Idea, Canada Wouldn’t Already Be Doing It

Roughly 85 percent of Canadians already live in a province using a carbon tax or cap and trade system, or else they will have one in play by 2017 – that’s a year before Trudeau’s 2018 ultimatum.

So, the idea isn’t new to Canada, or something to be scared about. The European Union has had a cap and trade system in effect since 2005 – they’re still alive over there.

B.C. and Quebec have been using carbon taxes as a way to reduce emissions for years now, and it’s encouraged the use of more renewable energy, and created thousands of jobs. Alberta’s Premier Rachel Notley announced her province’s commitment to a carbon tax of $20/ tonne starting in 2017 – that’s a year earlier, and double the fee of what Trudeau is asking other provinces to start at.

Newfoundland & Labrador can’t go whining if other places are doing as they should. In Alberta, the carbon fee revenue is expected to fetch roughly $3 billion in new money, which Alberta can use to invest in green initiatives such as building retrofits, investing in large scale renewable energy projects, and public transportation.

Ontario is poised to launch a Cap and Trade System in 2017. They also plan to join forces with two members of the “Western Climate Initiative” — California and Quebec — to create a larger carbon credit trading system. Nova Scotia has made huge strides in relying more on green tech for energy. In 2000, the province’s energy grid was 100% coal-fired; today it is only 56% reliant on coal.

patrick-canning-for-the-overcast
Illustration by Patrick Canning for The Overcast

One More Worldly Example of Going Green without Going Broke: Sweden

Sweden has been using carbon taxes since 1991, and it has drastically driven down the burning of oil for heat. Sweden’s carbon tax is a whopping $140 per tonne of carbon pollution: has it hurt their economy? No.

Since the carbon tax was introduced, Sweden’s economy has grown by more than 100%, and 2013’s “World Economic Forum Global Competitiveness Report” called them one of the top 5 countries in the world for economic competitiveness.

Naturally, those most opposed to carbon taxes are those who are financially motivated pollute without financial penalty. Sadly they have the advertising bucks and the tall podiums from which to convince us Trudeau’s Carbon Pricing Plan is bad for the country.

David Suzuki – the face of trustworthy decency – has assured us that Canada’s economy can grow healthily during our transition to greener energy (just as Sweeden’s did).

I often think of kids when I think of pollution – not in that “what kind of world are we leaving them” sense, but rather, how clear and simple their questions are: if pollution is bad, why do we do it? “There’s money in it” sounds ignorant. If we can land a man on the moon, and unravel what happened to the dinosaurs, we can damn well use those same brains to switch to cleaner energy without humanity spiralling into chaos.

Climate change is creating weather systems that will bash down our buildings, rumple up our roads, and leave people hurt and homeless. We sully our water supplies and let corporations harm people’s health, all to make a buck. Try explaining that to a 5 year old, who doesn’t yet know that humanity’s environmental ambivalence has created the kind of world where a child is born with more toxins in their blood, than people in their family.

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