Are we going to have a serious discussion about carbon pricing now?

Stephen Harper gives a shout out to Alberta's price on carbon


In a year-end interview with the CBC, the Prime Minister was asked whether he has proposed any kind of continental oil-and-gas policy to the United States. And, with that, Stephen Harper ends up praising Alberta’s carbon levy (or price, or whatever you want to call it).


We have proposed something.


Well, the province of Alberta, excuse me, the province of Alberta itself, already has a, it’s one of the few greenhouse-gas regulatory environments in the country. It has one. I think it’s a model on which you could, on which you could go broader.


This is the tech fund price carbon levy and the, the, it’s not a levy. It’s a price and there’s a tech fund in which, in which the private sector makes investments. So look, that’s what Alberta has done, that’s a model that’s available, but you know, as I say, we’re very open to see progress on this on a continental basis. I’ve said that repeatedly to our partners in North America and we look forward to working on that.

This is a potentially important moment, as far as this oft-ridiculous discussion is concerned.

This isn’t actually a novel thought. Indeed, Harper sounds here to be saying something like what his former environment minister said a year-and-a-half ago.

There hasn’t been a great deal of subtlety in talking about carbon pricing. There are those carbon taxes where the revenues go into general revenue and do not guarantee the reduction of a single tonne of greenhouse gases. (But) Alberta has a tech fund wherein their revenues are focused only, and in isolation, on technology to achieve further greenhouse-gas reductions than the emitters in that province are already able to achieve.

That first sentence is still the funniest thing a cabinet minister has said this century.

So what is Alberta’s policy? Officially, it is known as the Specified Gas Emitters Regulation. Here is an explainer from last year (when it seemed the Alberta government was preparing to increase the price per tonne of emissions). And here (pdf) is a study authored by University of Alberta professor and Maclean’s contributor Andrew Leach. Key to the policy is that companies that exceed their emissions intensity limit can contribute to a technology fund at a rate of $15 per tonne. In 2012, the fund took in $86 million.

The regulation refers to this as a “fund credit: A person responsible may obtain fund credits by contributing money to the Fund.”

Harper seems to want to call that “not a levy” but a “price.” I think I’ve generally referred to it as a carbon levy, but you can find examples of it being referred to as a carbon tax. Harper apparently wants to call it a carbon price. Marc Jaccard argues it’s wrong to call it a tax and refers to it instead as a fine. I asked Andrew Leach how to describe it and he offered the following:

I’d refer to it as a regulation with compliance flexibility. [The} key is, you could have a firm increase in emissions while lowering its annual compliance cost. Usually, that’s not possible with a levy.

Of course, the Harper government has spent the past two years trying to demolish any distinction between a cap-and-trade system (what the NDP proposes and what the Conservatives once proposed) and a carbon tax (what Stéphane Dion once proposed and now, how the Conservatives describe what the NDP proposes). And now, Conservatives might have to explain the difference between a carbon levy (or price or fine or credit or compliance flexibility) and what they oppose. (There are differences.)

The Conservative party seems to have once been of the opinion that a price on carbon was a carbon tax. Peter Kent offered a similar sentiment in a 2012 interview. In explaining the government’s opposition to cap-and-trade, Peter Kent also focused on the idea that cap-and-trade generated revenue.

It has also been reported that Peter Kent nearly completed a plan that would have increased the price to $30 per tonne under a so-called 30/30 plan.

(In the past year, the Finance minister has accused Liberal Leader Justin Trudeau of wanting to impose a “multi-billion-dollar tax on everything,” but, to my knowledge, Trudeau has only ever spoken of a price on carbon.)

All that said, the New Democrats sent out a statement from Megan Leslie yesterday under the heading, “STATEMENT FROM THE OFFICIAL OPPOSITION ON STEPHEN HARPER’S CARBON TAX.”

In a recent year-end interview, the Prime Minister surprised many by praising Alberta’s price on carbon and suggesting that it was a model to build on. Although New Democrats welcome this sudden change of heart from the Prime Minister, we know better than to get our hopes up.

The Conservatives’ abysmal environmental record is littered with contradictory rhetoric.

The Prime Minister and his minions have spent years demonizing the NDP for wanting to put a price on carbon and make polluters pay. They sent out fundraising letters to their members erroneously claiming we wanted to kill jobs and bring the entire Canadian economy to a standstill.

Stephen Harper also spent years promising regulations for the oil and gas sector, only to tell me two weeks ago in the House of Commons that it would be “crazy” to do so.

Canadians don’t want to wait any longer. Quite frankly, we can’t wait any longer. We need to reduce our greenhouse-gas emissions to fight against climate change and, in order to do that, we must put a price on carbon. But this will never happen under a Conservative government.

Canadians deserve better than broken promises and flip-flops. They deserve a government committed to building an economy for the future, which means ensuring a sustainable environment.

All that said, we’re still vaguely in the realm of a real discussion. The Conservatives have imposed regulations (which come with their own costs) on several sectors and are now apparently okay with Alberta’s policy on oil and gas. The NDP prefers cap-and-trade. The Liberals have some general interest in a price on carbon.

That sets up a discussion about policy design, potential greenhouse-gas reductions, benefits, costs and what to do with any resulting revenue—and there are very real differences between cap-and-trade, a carbon tax and Alberta’s model of regulation and pricing. On the question of revenue, when I asked NDP Leader Tom Mulcair about his party’s cap-and-trade proposal two years ago, he said, “There has to be an equivalent amount that goes into environmental purposes,” and, “It has to be concentrated in those provinces, those areas where that money is being generated.”

Mind you, the Prime Minister still hasn’t explained why, precisely, we should have to wait for the United States, and what a continental system would look like.

Maybe if we ask nicely, our Andrew Leach will stop by and explain the finer points of all this to us.

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