Braid: Testy first week shows hard slog to national carbon price

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Ministers from three provincial governments walked out. Alberta Premier Rachel Notley was startled and unhappy.

Only three provinces – Ontario, Quebec and B.C. – appeared content with Prime Minister Justin Trudeau’s new carbon price plan.

That was Monday, just the first day of the national march to lower emissions and fight climate change.

Five months ago, at a meeting in Vancouver, most provinces agreed in principle “to meet or exceed our national target of reducing greenhouse gas emissions.”

That was general. Nearly everybody talks eagerly about fighting climate change. Even Wildrose, while hotly opposed to a carbon tax, accepts the idea of meeting a national standard.

Now we’re into the gritty details, the gist of how the provinces will absorb a $50 per tonne levy by 2022.

Mount Royal political analyst David Taras sees “layer upon layer of complication” that could tip the whole enterprise into chaotic bickering. 

The Alberta government, even with its friendly attitude toward the goal, expects the negotiations to be long and hard.

“The talks over this will be extremely difficult because of the need to ensure policy equivalency across provinces,” says one senior official.

That’s the core of it – how to ensure that no province feels, to be blunt about it, screwed by any other province, or by Ottawa. 

With 14 governments at the table, the goal is surely mythical. The best Trudeau can hope for is a wide geographic distribution of provincial discontent, eased by acceptance of climate action among voters at large. 

Nova Scotia already wants some kind of exception, probably justified, for greening its electricity grid at great cost, including a 62 per cent rise in consumer prices.

Notley has a specific need –  getting a pipeline in return for agreement on Trudeau’s $50 per tonne price by 2022.

That’s just the start. Every party will want to get something, or escape something. Most provinces are keen to help, as long as no one else is helping less.

A year ago, Notley was in lockstep with Trudeau, handing him a provincial climate change policy that made him a hero at a climate summit in Paris.

Now she says Alberta can’t afford the new federal plan without a pipeline to tidewater. The strategy enraged hard-line environmentalists who praised her only last year.

While irritants will appear in every province, the biggest built-in problems may be Ontario and Quebec.

Ottawa has exempted them from imposing a carbon tax, because Quebec already has a cap-and-trade system, and Ontario soon will.

Cap and trade is more bureaucratic and opaque than a carbon price imposed on the general economy.

The government decides how much CO2 companies can emit. It sells, auctions, or gives away permits. A company can earn credits for emitting less, and sell those credits. Gradually, the bureaucrats squeeze down the level of emissions allowed.

In Alberta, the oilsands face an ultimate cap – 100 megatonnes of emissions per year – as well as the province-wide carbon price of $30 per tonne in 2018.

For the rest of us in Alberta, there’s the carbon tax. We know that on Jan 1, 2017, we’ll pay 4.49 cents more per litre at the pump. Natural gas prices on utility bills will jump by $1.011 per gigajoule.

In Ontario and Quebec, general cap and trade won’t leave such visible tracks. Nor will there by much transparency in such a bureaucracy-driven system.

This makes it easier for the governments to avoid political backlash, and more tempting for companies to game the system (over-reporting emissions at the start point, for instance, and under-estimating them afterwards.)

For people in other provinces, it will be very difficult to see if the cap-and-trade provinces are meeting the equivalent of  a $50 carbon price by 2022. 

It’s almost impossible to cross apples and oranges, in the garden or in national tax policy. Trudeau and the provinces will likely take years to grind out the details.

Don Braid’s column appears regularly in the Herald

dbraid@calgaryherald.com