Illustration by Marina Muun.
When Stephen Harper says Alberta has a good model for carbon pricing, as he did in his year-end interview with CBC News, you know something has changed.
For the past couple of years, Canada’s prime minister has dismissed such talk as “crazy” and described all variations of carbon pricing as a “job-killing tax” on hard-working Canadians.
Alberta’s carbon levy can best be described as better than nothing. B.C.’s carbon tax would be a superior model to emulate, as emissions in the province have dropped while its economy has grown. Still, Harper’s flip-flop – no matter how non-committal – tells us climate action has emerged as a hot-button political issue in Canada.
It is a lesson on the importance of timing, and the patience good timing demands in politics. As Pierre Elliott Trudeau once said, “The essential ingredient of politics is timing.” Former federal Liberal leader Stéphane Dion became a victim of bad timing when a major part of his 2008 election campaign was to create a carbon tax similar to what B.C. has today.
It was a great idea, but politically it was a dud. Harper took advantage of that, warning voters that the proposal would undermine both the economy and national unity.
It didn’t matter that Harper was talking rubbish. What mattered was that the public was ready to believe Harper more than embrace Dion’s call to do the right thing. The repercussions were lasting. Dion’s spectacular failure made any future mention of carbon taxes politically radioactive, until recently.
Harper knows he can’t take that gamble anymore – there’s too much momentum in the opposite direction and plenty of evidence now that carbon pricing, when properly implemented, doesn’t undermine economies.
Canada’s national newspaper, the Globe and Mail, is now writing editorials urging adoption of a national carbon tax, calling it Economics 101. Preston Manning, the father of Canada’s modern-day conservative movement and former boss to Harper, hit the airwaves and commentary pages in November urging fellow right-wingers to support carbon pricing.
A November public opinion poll from Environics Research found that for the fourth year in a row a majority of Canadians outside of B.C. support having a B.C.-style carbon tax in their own province. Average support was 56 per cent. Ontario had the highest rate of support, 61 per cent, which is a six-point increase over the previous year.
Ontario, as we reported last week, is ready to bank on that support. Premier Kathleen Wynne has made climate action a priority for her government, which has already signaled that carbon pricing is coming this spring. “When you see it, it will be real, it will be efficient, and it will be economically positive,” Glen Murray, the province’s minister of environment and climate, told Corporate Knights.
In Oil’s Slippery Slope, published in the latest issue of Corporate Knights, I explained why Canada’s oil industry should be paying attention. The desire for change is growing thicker in the air. You can hear the chorus of voices calling for it growing louder.
In September, institutional investors representing more than $24 trillion in assets called for a price on carbon, and many of those same investors want oil majors to disclose how such policies will affect the value of their assets and nature of their business.
After all, does it make sense to spend billions of dollars on oil exploration when preventing the worst affects of climate change means leaving two-thirds of the world’s known fossil-fuel reserves in the ground?
It’s what some residents living around the Gulf of St. Lawrence must be asking as they watch oil companies preparing to drill in what many consider an ecological treasure. Regular CK contributor Peter Gorrie took a closer look at this developing story and how it’s poised to erupt into another Keystone-esque resistance movement.
Not that the oil industry doesn’t have other problems. Caught off guard by the plunge in oil prices, many high-cost development activities are being shelved as companies rework the economics of their projects and face the reality of oversupply in the market.
Given the situation, don’t think this isn’t a good time to introduce a carbon tax. Quite the contrary – it’s a perfect time. While we’re at it, oil subsidies should also go.
It will lead to higher fuel prices, but that’s exactly why it should be done now while consumers are less likely to feel it, argues Maria van der Hoeven, executive director of the International Energy Agency.
“The worst course of action would be complacency in the face of low oil prices,” she wrote in a recent online commentary. Policymakers, she added, “have a once-in-a-generation chance to get us back on track. Let’s hope they seize the moment.”
That’s what Canada’s Ecofiscal Commission is doing. It’s a collective of 12 economists from across the country who believe that properly designed fiscal policy – like the B.C. carbon tax – can achieve both environmental protection and economic growth.
Five years ago, such a commission would be largely ignored. But when it launched in November, it received widespread coverage in major media. What has changed? I posed that question to commission chairman Chris Ragan.
“The mood or mindset is starting to change on this,” said Ragan, explaining the commission is tapping a nerve. “It has,” he added, “been fortuitous timing.”