Academics urge carbon price for Canada

Published 02:59 on March 19, 2015  /  Last updated at 11:14 on May 12, 2016  /  Americas, Canada  /  No Comments

Canada should implement a carbon tax or an emissions trading scheme and end subsidies to the fossil fuel industry to enable the country to cut its emissions 26-28% by 2025, a group of over 60 academics said.

Canada should implement a carbon tax or an emissions trading scheme and end subsidies to the fossil fuel industry to enable the country to cut its emissions 26-28% by 2025, a group of over 60 academics said.

A new report, Sustainable Canada Dialogues, was released Wednesday, outlining climate policy recommendations for the federal government from academics of a number of disciplines from all of Canada’s top academic institutions.

The report aimed to stimulate debate on future climate policy and emission targets in Canada ahead of the December Paris talks.

“Because renewable energy resources are plentiful, we believe that Canada could reach 100% reliance on low carbon electricity by 2035. This makes it possible, in turn, to adopt a long-term target of at least 80% reduction in emissions by the middle of the century,” the report said.

”In the short-term, we think Canada, in keeping with its historical position of aligning with United States’ targets, could adopt a 2025 target of 26-28% GES reductions relative to our 2005 levels.”

Canada aims to cut its GHG emissions to 17% below 2005 levels by 2020, but a December report by Environment Canada showed it will miss the target by a wide margin unless new policies are introduced.

The Sustainable Canada Dialogues report outlined three policies the country should put in place in the near-term to achieve cuts:

– Implement a national carbon tax or a national economy-wide cap and trade programme;
– Eliminate subsidies to the fossil fuel industry and integrate the oil and gas production sector in climate policies;
– Integrate sustainability and climate change into landscape planning at the regional and city levels to ensure that, amongst other goals, new and maintenance infrastructure investments help cut emissions.

TAX OR TRADE

The government is currently drawing up its INDC for Paris, and putting a price on carbon should be a key component in the Canadian plan, the report said.

A federal carbon tax based on the current system in British Columbia would be preferable if the government’s main priority was price predictability and administrative simplicity, the academics wrote, while a cap and trade scheme similar to the one in Quebec would be effective in terms of emission reduction certainty.

A national carbon tax could be linked to the current estimation of the social cost of carbon, which is around C$40 ($31.85) and rising by a dollar each year, it said.

The report outlined fairly specific design elements for a potential ETS in Canada.

– It should cover industrial facilities, utilities and fuel distributors;
– Permits should be free initially, but with a growing share of auctioning;
– Auction revenue should be returned to the province of origin, who could spend it as they choose;
– The scheme should have a minimum permit price and a mechanism to minimise volatility;
– Emitters should be allowed to use offsets to cover up to 8% of their emissions;
– Provinces could be allowed to use alternative policies, though legally binding emission targets would have to be developed.

INTENSE PROCESS

The Conservative federal government has been lukewarm on climate policies, and is unlikely to adopt any major new policies ahead of the October elections.

Most climate initiatives have been happening on the provincial level, such as in British Columbia and Quebec. Ontario is currently consulting the public on its new climate plan, asking among others whether a tax or an ETS is the best way to price carbon.

But climate will force its way on to the federal government’s agenda, as a deal in Paris would entail targets and policy plans from all major-emitting nations, the report predicted.

“We envision the next two years as an intense period of consultation and policy development to identify the policy instruments, regulations and incentives best suited for Canada,” it said.

”We hope that the initiatives mentioned above as well the present position paper will stimulate all levels of governments, from cities to federal, to adopt policies allowing Canada to make an ambitious and thoughtful commitment of emissions reduction in December at the 2015 Paris-Climate Conference.”

By Stian Reklev – stian@carbon-pulse.com

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