Canadian climate policy, explained

The climate crisis is among the top priorities for voters in the 2019 federal election. All the major parties have proposed plans to address it, but they vary greatly both in terms of their policy promises and their likely feasibility and impact.

Given the importance and complexity of the issue, The Ubyssey has summarized some of the key climate proposals of each party and assessed their merits and drawbacks in an effort to provide critical analysis to help inform your decision on Election Day.

Liberals

Stated platform:

If the Liberals remain in government, they would largely expand upon their existing climate initiatives, but they have promised some additional policies in their newly released campaign platform.

The keystone of the Liberal approach to tackling the climate crisis so far has been their implementation of a federal carbon-pricing scheme.

Under the plan, provinces that have existing carbon-pricing policies that meet the federal standard of $20 per tonne maintain their own price systems. The “backstop” provinces that do not meet that federal standard — Manitoba, New Brunswick, Ontario and Saskatchewan — are subject to the federal tax.

Ottawa levies this tax in the form of a direct surcharge on fuel and other petroleum products, as well as an output-based pricing scheme for businesses that charges them for emissions above an industry benchmark. The feds return 90 per cent of the revenue they raise in the backstop provinces in the form of a rebate for households. If the Liberals remain in power, the price of carbon would rise to $50 per tonne by 2022.

In addition to the $30 per tonne rise in the carbon tax, the Liberals have also recently said they will commit Canada to being net-zero — offsetting all the emissions it produces — by 2050. As part of that commitment, they have promised to plant two billion trees over ten years.

They are also promising to put all of the federal corporate income tax revenues from the Trans Mountain Expansion Project as well as any profit from the pipeline’s sale towards “natural climate solutions and clean energy projects.”

To encourage the proliferation of high-efficiency or net-zero homes and vehicles, the Liberals are also committing to providing a system of loans, rebates and subsidies to help consumers afford those cleaner, but generally more expensive alternatives.

They are also promising a $100-million investment in skills training programs to support net-zero home construction, as well as a $5-billion Clean Power Fund to assist the continuing transition away from high-emission power sources like coal and diesel.

Analysis:

While the federal carbon tax has encountered criticism since it came into effect earlier this year — including provincial challenges to its constitutionality — the available evidence suggests that some of these criticisms are unfounded and carbon taxes are among the best tools available to governments to combat the climate crisis.

The two charges laid against the federal carbon tax in the Conservative platform are increased inaffordability for households and ineffectiveness at getting Canada to its Paris emission-reduction targets.

The inaffordability charge is largely contradicted by the April Office of the Parliamentary Budget Officer (PBO) report on the fiscal impacts of the carbon-pricing system. It concluded that for all but the highest-earning 20 per cent of households, federal rebates would exceed the added costs households in backstop provinces would pay on fuel.

The Conservative claim that the federal carbon-tax should be scrapped because it will not get Canada to its Paris targets is based on a June PBO report which concluded that the tax would need to reach $102 per tone by 2030 to reach the Paris targets. While that is indeed what the PBO concluded, the report also states that it was not intended to be a ruling on the general effectiveness of carbon pricing to reduce greenhouse gas emissions.

BC has been studied extensively to assess the impacts of carbon taxes. A 2015 study found the provincial tax reduced emissions between five and fifteen per cent since 2008 and had little to no impact on economic activity in the province.

Carbon pricing is also widely endorsed by experts as one of the most effective means governments have for curbing emissions.

“That’s our home-run hitter,” said Dr. Patrick Baylis, an assistant professor in the Vancouver School of Economics who specializes in the economic impacts of the climate crisis.

That being said, the criticism still stands that the Liberal pricing scheme is not aggressive enough to adequately curb emissions to meet the Paris targets.

As for the Liberals’ proposed system of loans, rebates and subsidies to incentivize net-zero home and vehicle spending, it’s less clear such programs alone would be enough to drive significant change.

“Tax credits, by their nature, are basically a loan that you float to the government that you get back at the end of the tax season. Who can afford that loan?” said Baylis. “[Tax credits] tend to favour the people who can afford that large expense in the first place.”

Dr. Sumeet Gulati, an associate professor in the faculty of land and food systems, echoed that sentiment while also pointing out that consumer subsidies and credits are expensive means to reduce emissions.

When studying Canadian hybrid car subsidies, he found that “to reduce one tonne of carbon, the government was spending about $200.”

Compared to a tax that reduces a tonne of carbon at a revenue gain of $20, subsidies are a much costlier way to achieve the same goal.

Conservatives

Stated platform:

The Conservative platform squarely takes aim at the Liberal carbon-pricing plan, promising “green technology, not taxes.”

With that, the first climate policy they would enact upon taking office would be a repeal of the federal climate tax, leaving it to the provinces to decide if and how to price carbon.

The green technology side of their platform centres around a plan to set a mandatory amount businesses that exceed emissions standards must invest in “research, development, and adoption of emissions-reducing technology related to their industry.”

In addition to these investment mandates, the Conservatives are promising a tax credit for green technology developed and patented in Canada as well as a green technology and innovation fund that would allow businesses to supplement investments in green technology.

Similar to the Liberals, the Conservatives have proposed a tax credit to encourage homeowners to renovate their homes with more green technology. They are also promising a voluntary net-zero-ready standard for building construction.

Their platform includes a promise to pursue the continued countrywide transition to clean power sources but does not indicate how the party would go about achieving this goal if elected.

Finally, the Conservative platform proposes creating incentives for Canadian companies to expand exports of green technologies.

Analysis:

The Conservative plan suffers from some of the same drawbacks as the Liberal plan, but would also eliminate the carbon tax — one of the most effective tools for curtailing emissions.

Like the Liberal plan, the Conservative plan relies heavily on tax credits and subsidies to encourage households to adopt more energy-efficient building elements, but such measures have limited effectiveness because they favour the wealthy.

In a similar vein, the Conservative promise to mandate industry investment in emission-reducing technologies as a means of offsetting carbon emissions should be viewed with skepticism because it is difficult to quantify exactly what the offsetting impact would be from such investment.

The proposed tax credits for green technologies patented and developed in Canada as well as the green technology investment fund should also be viewed critically, as the effectiveness of research subsidies is context-dependent.

According to Baylis, subsidies for green technology in its early stages can be effective, as much of the basic science required to develop a product can be viewed as a public good that corporations are often under-incentivized to produce. But those beneficial effects diminish the farther a technology gets down the development pipeline.

Once that development gets to a certain point, “those firms are going to produce that no matter what,” Baylis said.

Technological development can also be indirectly encouraged through carbon-pricing as companies seek to avoid the costs of carbon emissions. Direct subsidies and mandatory investment are not the only means of driving green innovation.

Carbon pricing is also widely endorsed by experts as one of the most effective means governments have for curbing emissions.
Carbon pricing is also widely endorsed by experts as one of the most effective means governments have for curbing emissions. Rachel Cheang

New Democrats

Stated platform:

The New Democratic Party (NDP) platform, billed as a Canadian “Green New Deal,” includes a spate of goals that are generally more ambitious than those of the Liberals or Conservatives.

They are committing to maintaining the existing carbon-pricing scheme. But they are also promising to establish an independent Climate Accountability Office to keep the country on track to meet the Paris Agreement goal “to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels.”

Providing a smooth transition for workers as the economy changes due to the climate crisis is another NDP priority. The party is promising a combination of “access to expanded EI benefits, re-training, and job placement services” to that effect.

On the residential front, the NDP is promising a target of retrofitting all homes by 2050 and updating the National Building Code so that all new buildings will be net-zero ready by 2030. To support the retrofitting effort, they would offer low-interest loans to homeowners to finance energy-saving upgrades.

The party has an ambitious transportation policy, setting targets of having wholly electric transit fleets nationwide by 2030 and 100 per cent of new car sales being zero-emission vehicles (ZEVs) by 2040. To that end, they are proposing an expansion of federal incentives for ZEV ownership, including waiving the federal sales tax on such vehicles.

The NDP would also set a goal of net carbon-free electricity by 2030 and entirely non-emitting electricity by 2050, which they propose to achieve in part through the establishment of a Canadian Climate Bank to drive investment in renewable energy and the elimination of fossil fuel subsidies.

Analysis:

While the NDP platform is ambitious when it comes to climate policy, the feasibility of some of its proposals is unclear.

The party is committed to maintaining the current federal carbon-pricing scheme, but it should also be noted that they neglected to adopt more aggressive price targets that would get Canada closer to achieving its Paris targets.

“I think our climate tax will need to double,” said Gulati. “$50 is certainly not enough. $100 would be a minimum, I would say if you want to do anything realistic to get close to our climate goals.”

It is also unclear whether the NDP’s residential proposals are feasible given the fact that building codes in Canada fall under provincial and, in certain cases, municipal jurisdiction. Updating the National Building Code would provide provinces with a template to work from, but there is no mechanism to compel them to adopt it.

Similarly, there is a limit to what the federal government can achieve through targeted funding in terms of getting municipalities to retrofit their transit fleets.

Like the Liberals and Conservatives, their incentive system to encourage residential retrofitting would likely be a costly way to achieve relatively little in terms of emissions reduction compared to carbon pricing.

Their proposal for a Canadian Climate Bank is also subject to the same conditions as the Conservative plan for green patent tax credits, as subsidies would be most effective when targeted at things like basic science.

Finally, while the outright elimination of fossil fuel subsidies is an appealing campaign promise, it is important not to underestimate the difficulty that would be involved with making that promise a reality. Such subsidies appear in many different forms and at many different levels of government, so getting rid of them is not as simple as modifying the federal budget.

Greens

Stated platform:

Like the NDP, the Greens have also set out an ambitious platform outlining their climate policy if they were to form a government.

The overarching aims of their climate plan are to achieve a 60 per cent emissions reduction by 2030 and to achieve net-zero emissions by 2050.

To achieve those goals, the Greens are proposing to continue taxing carbon emissions and regularly increase the stringency of emissions standards over time.

They would also immediately suspend the approval of new oil and gas pipelines or drilling projects and begin phasing out existing production, targeting a total halt of bitumen production between 2030 and 2035. The party would also move to cancel the Trans Mountain Pipeline and eliminate remaining federal fossil fuel subsidies.

Another means of achieving their emissions reduction goals would be targeting 100 per cent of electricity coming from renewable sources by 2030, which they propose could be achieved by expanding the national electric grid using the money currently slated for the Trans Mountain expansion.

The Greens would also target a goal of 100 per cent net-zero new construction by 2030, which they would attempt to achieve through a combination of financial incentives for homeowners and changes to the National Building Code.

They also have an ambitious transportation policy that includes banning the sale of internal combustion passenger vehicles by 2030, investing heavily in passenger rail projects and exempting low and zero-emission vehicles from the federal sales tax. The ultimate goal is nationwide carbon-free public ground transportation by 2040.

Analysis:

The Greens have an ambitious climate plan, but many of their proposals lack specificity and are arguably unfeasible.

They are committed to maintaining a carbon-pricing plan and proposing to increase the stringency of emissions standards over time. But as noted above, the price of carbon would likely have to increase substantially as well, especially given the Greens’ targeted emissions reduction of 60 per cent by 2030.

The same criticisms of consumer incentive programs like tax exemptions that apply to the Liberals, Conservatives and NDP apply to the Greens as well. Their cost of implementation will be high relative to their probable emissions reduction.

A similar criticism of the NDP plan to overhaul the National Building Code applies to the Green plan to do the same, as provincial jurisdiction over-regulation would hamper the effectiveness of the federal government.

Likewise, the Green proposal to eliminate fossil fuel subsidies involves much more complexity than it sounds and their proposal to phase out fossil fuel production — an enormous undertaking — lacks the detail to make it seem feasible.

Ultimately, while the different party plans might seem overwhelming, it is an issue that students should be paying close attention to, said Laura Chen, co-president of the UBC Energy Environmental Policy Association.

“This is such an intersectional issue, it’s not just about the environment, it’s about healthcare costs, it’s about affordability,” she said.

“For a lot of students, we’re living in the generation that’s going to be the most impacted by climate change. So the decisions that we make in this election, that [party] is going to be empowered for four out of the eleven years we have left to tackle this crisis.”