Working Around Alberta on Climate Change

If Canada wants to reduce emissions, an opt-in program might be the best way forward.

The first high-level discussions about a federal policy to combat climate change began in the mid-1990s. Fifteen years later, we are no closer to a resolution.

The Harper government’s approach has been to wish the problem away. The post-Copenhagen decision to await a U.S. climate change bill has effectively ceded decision making about Canadian policy to the paralyzed U.S. Houses of Congress. The recent federal budget offered no new funds for clean energy and failed to mention climate change at all.

In the absence of a consistent federal policy, the provinces have chosen to independently set targets for reducing greenhouse gas emissions.

Despite Canada’s international reputation as a laggard on climate change, a large majority of the provinces are in fact prepared to increase energy efficiency and to transition to less carbon-intensive forms of energy production and consumption.

If Alberta is excluded from the equation, the provincial targets add up to a 14 per cent reduction in greenhouse gas emissions below 1990 levels by the year 2020. This aggregate target, though short of the pace advocated by the European Union, is far ahead of the U.S. target of 3 per cent below 1990 levels by 2020 that was recently adopted by the Harper government. If the federal government reversed course and announced a national plan to achieve that aggregate provincial target, Canada would be widely applauded.

The problem comes when Alberta is included in the equation.

The target set by the Alberta government works out to a 56 per cent increase in greenhouse gas emissions above 1990 levels by the year 2020. Add that to the other provincial targets, and the national emissions target becomes a 7 per cent increase over 1990 levels by 2020, not a 14 per cent decrease.

Just as the Harper government cannot wish away climate change, environmental groups cannot wish away Alberta’s increasingly oil-based economy. No amount of negotiation or investment in carbon capture and storage research will fill the gaping chasm between the target set by Alberta and the targets set by the other provinces.

The compromise solution is an “opt-in” federal climate change program. The program would include a range of existing and proposed policy instruments, like a carbon tax that is revenue-neutral at the provincial level, targeted tax incentives or rebates for efficiency measures, and feed-in tariffs for renewable energy.

The key is that in order to join the program, a province would need to adopt an emissions target that meets or exceeds some minimum federal target. If, for example, the minimum was the U.S. target adopted by the Harper government, nine of the ten provinces would be eligible.

The level of access to the federal dollars in the program would be pro-rated to that province’s emissions target. Failure to achieve the target would lead to reimbursement of the federal program.

If Alberta, or another province like Saskatchewan, elected not to participate, there would be no direct cost or punishment. Provinces outside the system could still negotiate targeted federal investments to support emissions reductions, like support for carbon capture and storage research.

This proposal might appear to grant a pass to provinces with carbon-intensive industries like Alberta. It might also appear to be a blow to federalism.

It would, however, be a vast improvement on the status quo. The current situation is certainly not doing any favours for our climate, or for our federation. The fifteen-year argument about climate change policy has increased animosity between the provinces, damaged Canada’s international reputation, and helped fuel the rapid growth of greenhouse gas emissions.

An “opt-in” system, though by no means ideal, would break the stalemate that has stalled progress on emissions reductions.

First, it would allow willing provinces to collaborate on the transition to a low-carbon future. Second, it would show the world that much of Canada is serious about reducing greenhouse gas emissions. Finally, it would create a mechanism to slowly engage the more reluctant provinces over time.

We have been arguing about climate change policy for fifteen years, to no avail. It is time that all the parties to this discussion, including the environmental organizations and the climate campaigners, consider a compromise. Otherwise, we risk stalling real federal action for another fifteen years.