Analysis

Donald Trump gives carbon price foes a new line of attack

Donald Trump will likely have serious consequences for climate policy in the United States. But at least American voters had some say in the matter. That Trump would also be able to dictate Canadian, or even global, climate policy seems more unjust.

What a Trump presidency will mean for Canadian and global climate policy

President-elect Donald Trump's skepticism about climate change will have an effect on Canada's and the rest of the world's efforts to reduce carbon emissions. But the reasons for reducing greenhouse gas emissions haven't changed. (John Sommers II/Getty Images)

Donald Trump once suggested "the concept of global warming was created by and for the Chinese" to weaken the manufacturing industry in the United States. He later claimed he was joking, but he has also repeatedly described climate change as a "hoax." And the man he has appointed to oversee the transition at the Environmental Protection Agency has dismissed the threat of climate change.

All of which will likely have serious consequences for policy in the United States. But at least American voters had some say in the matter.

Trump's capacity to also dictate Canadian, or even global, climate policy seems more unjust. But that is now for Canada and the world to reckon with.

What does Trump mean for a carbon price in Canada?

Trump has vowed to repeal President Barack Obama's environmental regulations, make significant cuts to the EPA and withdraw the U.S. from the Paris climate agreement. His election has been greeted as a potential "disaster" for the planet. 

Though his opinions are readily subject to change, it is fair to assume he won't be embracing the notion of carbon pricing. And that has prompted renewed opposition to Prime Minister Justin Trudeau's plans for a national price on carbon.

"The election result means we will not be seeing a carbon tax in the U.S. any time soon," Saskatchewan Premier Brad Wall noted in the official statement he released the morning after Trump's victory was declared.

"It makes no sense for our federal government to push ahead with imposing a national carbon tax, when our biggest trading partner — and our biggest competitor for investment and jobs — is not going to have one."

Of course, Hillary Clinton wasn't proposing a federal carbon tax either — a fact Wall touted four weeks ago in promoting his own opposition.

"A carbon tax makes no sense anymore," said interim Conservative Leader Rona Ambrose. "It's complete insanity."

(At question period on Monday, Ambrose clarified that a carbon tax "was always a bad idea, but now it is even worse.")

Suffice it to say, someone somewhere will always be able to identify some reason for not acting to significantly reduce greenhouse gas emissions — two years ago, with Obama firmly ensconced in the White House, Stephen Harper said it would be "crazy" to implement a unilateral price on carbon when oil prices were so low.

Which is not to say that such reasons shouldn't be considered.

How can Canadian governments address competitiveness concerns?

Trudeau betrayed no second thoughts last week when asked about his plans for a carbon price.

"We know that putting a price on carbon pollution is a way to improve our response to economic challenges, to create good jobs going forward, and to show leadership that, quite frankly, the entire world is looking for, along with the solutions that go with it," he said, perhaps casting his eyes beyond the United States.

Trump's "election portends many things," says a senior Liberal, "but it doesn't change the law of science."

Alberta's New Democrats seem similarly undaunted. "Climate change is still real," a senior government official in Alberta said last week.

If one wagers that the world is still headed toward a low-carbon future, it would make sense to continue moving in that direction as a country.

In a post last week, David Sawyer, an environmental economist, argued that Canadian policy could drive Canadian firms to develop innovations that could be marketed abroad and would hedge against future transition costs.

Economic competitiveness concerns — whether policies would seriously disadvantage Canadian firms that compete with American companies — have long been part of the discussion around climate policy in Canada, Sawyer notes. And those concerns are "often justifiable." But such concerns can be addressed in designing a pricing policy.

"Competitiveness issues are real issues, but they can be dealt with," said Christopher Ragan, chair of the EcoFiscal Commission, a group of pricing-minded economists. "They're not a reason for doing no policy. What they are is a good reason for doing policy carefully."

In Alberta, Ragan notes, some emitters will receive subsidies to cover the cost of the province's price on carbon. In Ontario and Quebec, some firms are provided with free permits.

Matt Horne of the Pembina Institute says there is evidence some jurisdictions internationally have been too generous in this regard, but that competitiveness concerns are "legitimate" and addressing those concerns is "very manageable." 

What about the global effort to combat climate change?

The implications of Trump's plans to withdraw from the Paris agreement are more complex and speculative.

China is being touted as the new global leader on climate. And Nicolas Sarkozy, the former French president now seeking a return to office, has suggested that European countries impose a carbon tariff on American goods if the U.S. abandons the Paris accord. 

But it is also the case that someone else might be sworn in as president in 2021.

And the reason for acting to reduce greenhouse gas emissions would still remain regardless.

Horne worries the "moral imperative" to act is being forgotten in the midst of the current conversation.

For sure, there are immediately practical questions about policy design, but hanging above the politics and economics of the matter is the threat that climate change poses to the future of the planet and humanity.

Acting in a cost-effective and well-considered manner is a worthy goal. But not acting in good faith toward meaningful progress is to ignore or accept whatever hardship that means for future generations.

Not even Trump should be allowed to distract Canada and the rest of the world from that. 

About the Author

Aaron Wherry

Parliament Hill Bureau

Aaron Wherry has covered Parliament Hill since 2007 and has written for Maclean's, the National Post and the Globe and Mail.

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