OPINION | Conservative climate plan is cloaked in mystery, choked with irony
Andrew Scheer's plan offers many more questions than answers
EDITOR'S NOTE: This is the second in a series of articles from energy and environmental economist Andrew Leach about the federal political parties' climate plans. Read his previous article here:
Last April, he said without hesitation that, "of course," his plan would allow Canada to meet its Paris commitments — commitments first made by the Harper government. Now, he'll say only that his plan gives Canada the "best chance" to meet those targets.
I suppose he can claim his plan has a chance to meet the targets because he hasn't defined many of the measures he's going to take very clearly. With that much wiggle room, there exists a theoretical chance he could do something stringent enough to meet Paris. I guess.
Nothing that costs anyone anything
Scheer's plan tells you what he won't do: no carbon taxes, no clean fuel standards, and generally nothing that costs anyone anything. What the plan doesn't tell you is how he plans to square all of this with Canada's Paris targets and/or prepare Canada for success in a world acting on climate change.
True to his previous commitments, Scheer announced that he wouldn't price carbon… sort of. Instead, he'd demand that facilities invest a specified amount (call it a tax) to offset any emissions above a cap that he would impose. A requirement to financially compensate for emissions sounds a lot like a carbon tax. Just a tax that we know almost nothing about.
We know that a Scheer government would set emissions standards for major emitters — specifically facilities emitting over 40,000 tonnes of carbon dioxide equivalent per year — and that facilities would be required to reduce their emissions to meet those unspecified limits.
We're told those limits will reflect the highest standards of green technology and that those who emit more than is allowed (apparently "require" doesn't mean what we think it means) will be required (this time they're serious, apparently) to invest in research, development, and the adoption of emissions-reducing technology.
Facilities will have to invest a set amount for every tonne of emissions above the limit, but we don't know what these limits are or what the required investment rates will be.
Nothing to disrupt the status quo
If any of this sounds ambitious and likely to make a real dent in emissions, you need only look as far as Alberta Premier Jason Kenney's reaction to understand that it likely won't.
If Scheer were serious about making big cuts to industrial emissions, the loudest objections would likely come from Kenney. About 55 per cent of the emissions covered under Scheer's proposed industrial regulations would be in Alberta, with most of those in the energy sector.
A federal plan to require emissions reductions in Alberta's energy sector with mandated but unspecified investments in technology for those who don't meet the highest standards of green technology? Such a statement made by Prime Minister Trudeau would have Jason Kenney foaming with outrage and talking about how the measures could force Alberta out of Confederation. Instead? Crickets.
One need not wonder why. Kenney is confident the plan would not be sufficiently stringent to disrupt the status quo in Alberta's energy sector.
This leads me to one of the major unaddressed issues in Scheer's plan: how would it interact with provincial plans? Would Scheer's industrial regulations apply everywhere, or would they act as a federal backstop in jurisdictions without sufficiently stringent policies? The latter approach would present more than a little irony as Canada's Conservative premiers are in court arguing that the federal government does not have the authority to enact such a backstop plan.
Scheer also tries to spin his plan as being more stringent than Trudeau's. It's not.
We're told that the program would apply to facilities emitting more than 40,000 tonnes per year, while Trudeau's plan applies only to facilities emitting more than 50,000 tonnes per year. But this is a false comparison. Under Trudeau's plan, smaller facilities are covered by the carbon tax. Under Scheer's plan, all but the largest 600 or so facilities in Canada would be exempted from carbon emissions reduction standards or pricing.
Not content with that, Scheer's plan has the audacity to claim that the biggest polluters got a special deal under Trudeau's policy, as they only pay a carbon price on emissions above a facility-specific limit. Scheer's plan has those deals too — it requires firms to invest a certain amount to offset emissions above a facility-specific limit. The real difference is that, with Scheer's plan, nobody knows how big the special deals will be.
A false dichotomy
The Scheer plan talks of technology, not taxes, as the solution to Canada's emissions challenges and, in so doing, creates a false dichotomy.
The question is not whether technology will play a key role in reducing emissions, as it necessarily must, but how to accelerate development and deployment of these new technologies. Carbon pricing, whether in the form of taxes or so-called flexible regulations, will provide higher value to low-carbon innovations and encourage exactly the development and deployment that Scheer himself wishes to see occur.
Don't believe that economic incentives will drive innovation? Andrew Scheer certainly does, as his plan offers a 20 per cent refundable credit for home renovations, up to a maximum value of $3,800 per year, a $250 million fund to subsidize private-sector investments in green technology, a reduced federal corporate tax rate applied to revenue from green patents and expanded Export Development Canada (EDC) programs to issue more green bonds.
Noticeably absent, however, is any acknowledgement that economists agree that a carbon price is the best means to encourage green technology deployment because it ensures that a market exists for emissions reductions. As economists Jack Mintz and Nancy Olewiler wrote in their seminal paper on emissions pricing in Canada, "an environmental tax provides a continuous incentive to search for ways to minimize (emissions). … It is in the interests of the taxpayer to continue to search for better and cheaper technologies to reduce taxed emissions."
Don't be fooled
Hey, look over there: raw sewage!
Were you distracted? That's part of Scheer's strategy too.
By introducing a climate change plan peppered with commitments on other measures, such as sewage, wildfires and environmental law enforcement, Scheer is hoping you will fail to notice that there's not much substance to his climate plan. Don't be fooled. But while you're here, it might be fun to ask whether the environmental laws Scheer plans to enforce would include protections for woodland caribou or southern resident killer whales under the Species at Risk Act.
If you weren't distracted by the sewage and the law and order, you might be blinded by irony.
Scheer proposes to brand Canadian energy products "Canadian Clean" and market them as an alternative to more carbon-intensive options elsewhere. This branding exercise, it seems, is unburdened by the inconvenient fact that many of our energy exports are more carbon intensive than potential alternatives.
Take, for example, our oil exports to the U.S. west coast. In 2018, the average carbon intensity for crude supplied to California refineries was roughly 70 kilograms per barrel, while the weighted average of Canadian barrels exported to California was approximately 100 kilograms per barrel — more than 40 per cent higher than the average.
Would Scheer's commitment to replace high emissions energy sources with lower emissions alternatives extend to Canada's oilsands exports? Of course not.
'A bitumen-soaked petard'
There are examples of Canadian energy and energy-intensive exports that are cleaner than global alternatives, aluminum produced using Quebec hydroelectricity or LNG from B.C. likely among them. But, when it comes to Canadian oil, this strategy seems destined to see Scheer hoist by his own bitumen-soaked petard.
Opponents of Canadian oilsands would, no doubt, embrace a Canadian campaign to displace emissions-intensive energy sources. And, while there are doubtless many good news stories of innovation in the oilsands and elsewhere, the inevitable environmental campaign featuring pictures of oil sands mines overlaid with Scheer's "Canadian Clean" slogan seems like an own goal we should avoid.
Beyond the I-can't-believe-it's-not-a-carbon tax on industrial emissions, tax credits and marketing gimmicks, we're told that Scheer will encourage things, but not how these encouragements will change anyone's decisions.
For example, Scheer's plan states that "farmers are doing their part in the fight against climate change by improving land-use practices like zero tillage and the use of 4R Nutrient Stewardship". Farmers might be pleased that Scheer will, "recognize their contribution in sequestering carbon," but I'm sure they'd be much happier with a carbon offset program which would allow farmers to earn a revenue stream from these activities to complement their cost savings.
Such programs have been in place in Alberta since 2007, and the Harper government had proposed the development of a federal offset program around the same time. That program would be a good place for a Scheer government to make good on its claim to, "look for ways to support their continued development of technology and land-use practices that are good for our environment."
Instead, we're left to wonder what persuasive words Scheer might use to encourage agricultural emissions reductions. Remember, removing the federal price on carbon could actually make some of these emissions reductions less bankable for farmers.
We are left to wonder (again)
A Scheer government will also, we're told, "foster the adoption of smart grid technology and strategic interconnection of electricity grids and foster the adoption of renewable power technologies." What would a Scheer government do to enable more interties, smart grids, or to foster renewable power development? We're (again) left to wonder.
Scheer's plan to whisper in the ear of energy producers next moves on to a commitment to "encourage fuel producers to do their part" in lowering their emissions intensity. How? Not with regulations like the Trudeau government's clean fuel standard, and definitely not with carbon pricing. So, how?
As you might guess, we're left to wonder.
Scheer's plan offers more questions than answers, questions to which provincial leaders and Canada's business community would be demanding answers, if they thought he was serious about implementing it.