Climate Talks II: Real Change, Real Challenge

The media war drums around this month’s First Minister’s climate change meeting subsided pretty quickly. Climate delinquent Brad Wall got to play captain petro for a while and instead of the nation-shattering confrontation anticipated by some, the FMs signed up to a collective effort to a cut of at least 30% in GHG emissions over the next 15 years. Then the nation’ s media turned their eyes to Washington glitz and speculation about this week’s federal budget.

The fact that the climate change talks dropped almost immediately out of the news cycle was no surprise. The media were looking for something new or dramatic and instead were fed platitudes and process. The official communiqué declared “we are moving toward a pan-Canadian framework for clean growth and climate change that will meet or exceed Canada’s international emissions targets.” Alberta’s Rachel Notley elaborated.” Nobody was debating whether we needed to take action on climate change, no one was really debating whether some form of pricing in some fashion was going to be required to take action on climate change and everybody was very committed to the timelines.”

The fact there was agreement on “some form of pricing” for carbon was hardly a breakthrough, given that last August the Premiers agreed among themselves to “review and explore market-based mechanisms for cutting GHG emissions.” And buying into the timeline was no act of political courage – it’s highly unlikely any of the first ministers will be in office to face the music 15 years from now if they are not met. And the “international emissions targets” agreed to were the ones handed down from the Harper government, which made an art of foot-dragging on GHG emissions.

The only action item from the meeting was agreement by the provinces to join the feds in four working groups, ordered to report back in six months. The combined mandates of the working groups are so broad that even Wall – vehemently opposed to carbon pricing and apparently any other steps to reduce emissions – could sign the grandly named Vancouver Declaration. He apparently found some wording buried deep in the 2,700-word document about bringing “ new and emerging technology and innovations to market” that enabled him to sign on – even if he did have his fingers crossed behind the back.

High carbon price needed

Of the four working groups – clean technology, carbon pricing mechanisms, specific mitigation opportunities, and adaptation – the second group, carbon pricing mechanisms, is where the action will be. Putting a price on carbon is the Liberal policy and it is also the approach endorsed by most experts. Trouble is, unless the price is steep, there will be no meaningful reduction in GHG emissions.

Within the carbon pricing framework, there are two distinct approaches, cap and trade, which Ontario, Quebec and Manitoba are doing, and a carbon tax, the preference of British Columbia and Alberta. The other five provinces – the Atlantic Provinces and Saskatchewan – have embraced neither approach. But unlike Saskatchewan, the Atlantic region has been generally part of the solution, not the problem. The four Atlantic Provinces have 6.7% of the population and produced, in 2013, 6.1% of the country’s emissions. This is down significantly from 2005 when this region polluted above its weight – 7.6% of emissions. Moreover, this downward trend is expected to continue – the result of some successful emission-reduction steps and – sadly – stagnant economies and negligible population growth.

Projections of GHG emissions indicate that, led by Nova Scotia, the Atlantic Provinces will in fact come very close to hitting the target of 30% reductions from 2005 levels by 2030.

2005               2030       % reduction

NL                     10mt             8mt               20.0

PEI                       2mt             2mt                0.0

NS                    24mt             14mt             42.0

NB                     21mt             16mt             23.8

Atlantic           57mt             40mt             29.8

ROC                 692mt           775mt          (12.0)

As the table shows, the Atlantic region is projected to come within a fraction of hitting the 30% in 15 years minimum target. Over the same period, it is projected that the rest of the country (ROC) will be increasing emissions by 12%. This is according to the National Inventory Report for GHG emissions, published by Environment Canada and submitted to the United Nations as part of Canada’s obligation to the UN Framework Convention on Climate Change. If its projections are correct, the current carbon pricing policies of the provinces west of us will leave the country 250 mt over the target the first ministers agreed to in Vancouver. Achieving those reductions over the next 15 years will be one tough assignment

On the positive side, since Environment Canada published its projections last September Albert has announced an ambitious plan to contain emissions. New measures include:

  • A 100-megatonne cap on carbon emissions from the oil sands;
  • An economy-wide tax of $20 per tonne on carbon-dioxide emissions starting in 2017, rising to $30 in 2018;
  • Incentives to have nearly one-third of power generated from renewables such as wind and solar by 2030;
  • A reduction of 45% in releases of GHG heavy methane from oil and gas production.

Despite this impressive list of initiatives, Alberta’s 2030 target is to keep emissions at current levels. We can’t count on getting a 30% cut from Alberta’s 2005 emissions of 234 mt., even if that province hits its targets. At best, Alberta’s efforts will reduce the projected 2030 emissions from ROC by 50 mt., from 775 to 725, leaving the country 200 million tonnes above the 2030 target.

Missing targets

It’s not that the other carbon-pricing provinces don’t have targets. They have all set targets to 2030 that are more ambitious than the national one. The problem is that Environment Canada’s projections suggest they won’t hit anywhere close to those targets with their current suite of policies.

Province             2030 Target       EC Projection     Variance

Quebec                      56mt                    90                       34

Ontario                   115mt                     181                       66

Manitoba                  13mt                       24                      11

BC                             38mt                     83                        45

The most surprising failure is British Columbia’s. Despite that province’s widely admired $30-tonne revenue-neutral carbon tax, B.C. is projected to achieve only 45% of its 2030 target. This suggests a couple of things. First, the tax, frozen at $30 since 2012, is too low. Second, GHG reductions are incompatible with exemptions B.C. gives to emissions released during production, processing and transmission of fossil fuels – exemptions deemed essential to the province’s promotion of Liquefied Natural Gas exports. (Environment Canada’s projections confirm what critics have been saying all along: the B.C. carbon tax, as currently designed, doesn’t work very well. http://thetyee.ca/Opinion/2016/03/08/BC-Carbon-Tax-Failure/ )

Recent reports indicating that methane emissions from the oil and gas industry can be reduced at fairly low cost may help to solve part of the problem, but there is consensus that a $30 a tonne carbon levy – which will also be the Alberta rate in 2018 – is much too low to have a meaningful impact on the economy as a whole. The carbon price under the Ontario and Quebec cap-and-trade plan is even lower – $15 a tonne and with a broader range of exemptions than in Alberta and B.C..

The Suzuki Foundation has suggested that B.C.’s levy should be increased to $90 a tonne by 2020, which would amount to about 20 cents on a litre of gasoline and heating oil. That would work out to about $10 on a 50-litre fill up gasoline, $120 on a 600-litre tank of heating oil and about $4.50 to a gigajoule of natural gas, affecting business and residential customers and large users, like the tar sands. It is not a foregone conclusion that even a $90 levy would achieve the required reductions in emissions. However, it is clear that the carbon price now in effect in Canada’s four largest provinces won’t do it. And there is the rub.

The Liberals’ “Real Change” campaign slogan is looking a little shaky in a number of areas – pipelines, fighter aircraft and the “middle class” tax cut included – but is looking especially endangered on the climate change file. So far, the only evident change from the Harper government is in the rhetoric and the willingness to engage the provinces. Given Canada’s past and pending failures to live up to Kyoto and Copenhagen commitments actually meeting the modest reduction targets agreed to in Vancouver would be “real change.” But for that to happen the provinces that have moved to put a price on carbon are going to have to significantly jack up that price, and soon. And whether through carbon pricing, tougher regulation or just saying no, emissions from oil and gas development will need to be cut.

The first test of whether the 20-year logjam blocking national action of GHG emissions will be broken may take place even before the working groups report back to first ministers next fall. The feds are dealing with an application for approval of a massive LNG export facility in northern B.C., an undertaking that would add at least five million tonnes of GHG emissions to the national inventory. The proponent, backed by the B.C. government, argues that rather than damaging the environment, the exports will have a beneficial effect globally because the exported natural gas will replace high-carbon fuels like coal and oil. That may be the case – there is as yet no way of verifying such a claim – but it certainly won’t help Canada meet its GHG targets.

Nova Scotia and the other Maritime Provinces will be mainly spectators in the real struggle to get the big provinces, especially the oil and gas producers -to put their money with their green mouths are. But that does not mean that Nova Scotia and the Maritimes shouldn’t be taking a closer look at the pros and cons of carbon pricing, a topic for some future day.

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About Richard Starr

RICHARD STARR has had careers as a journalist, public servant, broadcaster, political staffer and freelance policy adviser. He is author of numerous newspaper and magazine articles, appearing in everything from Atlantic Insight to Atlantic Progress. A lifelong student of Maritime history, Starr is married to playwright and former MP Wendy Lill. They live in Dartmouth.
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