Analysis

The phoney war over carbon pricing might finally be coming to an end

For all the talk over the last several years - variously passionate and apocalyptic - about implementing a price on carbon emissions, the national debate remains a phoney war. That might soon change. In the meantime, there will continue to be minor skirmishes of varying consequence.

The choice is not between pricing carbon and relying on magic to reduce emissions

Conservative MP Pierre Poilievre speaks to reporters in the foyer of the House of Commons in Ottawa Tuesday, Nov. 28, 2017. THE CANADIAN PRESS/Justin Tang (THE CANADIAN PRESS)

For all the talk over the years — both passionate and apocalyptic — about putting a price on carbon emissions, the national debate remains a phoney war. That could change soon.

In the meantime, there will still be minor skirmishes of varying degrees of consequence.

On Monday morning, the federal government released a new report estimating the emissions reductions that could result from its plan to set a national benchmark price for carbon: 80 to 90 megatonnes. Oddly enough, the Conservatives were not reassured by this proactive contribution to the debate.

Instead, Conservative critic Ed Fast told reporters on Monday afternoon that the report — 13-pages long and citing previous academic research — looked like it had been written "on the back of a napkin" and was rife with "qualifications." The Liberals, Fast said, could not be trusted to conduct such modelling.

And yet, apparently untroubled by their own doubts about the government's ability to write reliable reports, the Conservatives proceeded Tuesday to move a motion demanding the Liberals release an estimate of the cost to households of pricing carbon.

Environment Minister Catherine McKenna discusses the federal government's carbon pricing plan following Environment Canada's analysis that estimates the plan could eliminate up to 90 million tonnes of carbon dioxide by 2022. 9:21

Counting the cost

This dispute started with two analyses prepared by civil servants in the Department of Finance and submitted to the office of Finance Minister Bill Morneau. Conservative MP Pierre Poilievre received the documents through the access to information system, but with the relevant calculations redacted.

If the Conservatives believed such internal research should not be exempted from mandatory disclosure, they could have changed the access law at any point during their last ten years in government. But the Liberals also once promised to release a cost analysis with every government bill. And they generally have been keen to promote their approach to climate change as the most cost-efficient.

In this case, though, the Liberals argue it's not up to the federal government to do the costing because each province — with one exception — is implementing its own pricing policy. Questions about cost, they argue, are better asked of provincial governments. That will change a bit when the federal government implements a carbon pricing policy in Saskatchewan, where the provincial government is refusing to do so.

But in the meantime, the information Poilievre says he wants is already available to him. Jennifer Winter, a researcher at the University of Calgary, has estimated that a $50 per tonne price on carbon emissions, which the Liberals would have in place by 2022, would cost households annually between $603 (in British Columbia) and $1,120 (in Nova Scotia).

That estimate does not account for changes in consumer behaviour, or how the revenue from carbon pricing might be returned to households through tax cuts or direct subsidies. But it's at least something to work with.

The Parliamentary Budget Office, meanwhile, has now estimated that Canada's GDP could be 0.5 per cent lower than it would have been by 2022 — less if carbon tax revenue is used to reduce personal or corporate tax rates (though the Ecofiscal commission quibbles with the PBO model).

What would Andrew Scheer do?

Upon learning of the PBO report last week, Conservative Leader Andrew Scheer announced that the Liberal plan would "destroy the Canadian economy."

But more important was what Scheer said this past weekend. Appearing on CTV's Question Period, Scheer confirmed two crucial points: that his Conservative party will release a "comprehensive" and "meaningful" plan to reduce greenhouse gas emissions and that the plan will aim to meet Canada's 2030 target for reductions.

That matters, because the Liberal plan to reduce emissions can't be properly evaluated in a vacuum — unless you assume that reducing emissions is a straight-up choice between carbon pricing and magic.

Scheer presumably will want to avoid proposing anything that might "destroy the Canadian economy," meaning he'll have to hit the 2030 target without reducing GDP by more than, say, 0.4 per cent. He'll also probably want to show that his proposals (regulation? corporate subsidies? tax incentives?) will somehow cost less than the Liberal plan.

The Conservatives might have to acquire their own independent estimate of emissions reductions, but, as a result of reforms passed last year, the Parliamentary Budget Office is newly empowered to review campaign proposals by political parties. So as soon as Scheer and his party have a proposal to make, they could submit it to the PBO for a costing.

Conservative Pierre Poilievre and Environment Minister Catherine McKenna trade barbs in QP Tuesday 3:01

'How much? How much?'

The complexities of economic modelling and climate policy might complicate matters; non-pricing options are necessarily less explicit about cost and some amount of haggling over calculations would ensue. 

But, roughly speaking, this is what the debate about climate policy and carbon pricing has lacked for years: a proper comparison of competing proposals.

On Tuesday, Poilievre hectored the Liberal front bench with a repeated plea. "How much, how much, how much, how much," he asked, gesturing at each minister, "will the carbon tax cost Canadians?"

Environment Minister Catherine McKenna responded in kind. "Mr. Speaker, I have a question," she said. 'What is your climate plan? What is your climate plan? What is your climate plan? What is your climate plan?"

After nearly a decade of free-form fretting about a price on carbon — going back to Stephane Dion's ill-fated Green Shift — an actual comparison of rival plans might make for a nice change of pace.

Corrections

  • A previous version of this story incorrectly stated that, according to an analysis by the Parliament Budget Office, the rate of GDP growth could be 0.5 per cent lower in 2022 as a result of a $50 per-tonne price on carbon. In fact, the PBO estimated that total GDP could be 0.5 per cent lower.
    May 02, 2018 12:03 PM ET

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.