New Conservative leader Pierre Poilievre claims he can reduce Canada’s industrial greenhouse gas emissions without a national carbon tax. So does U.S President Joe Biden.
That’s not the view of Prime Minister Justin Trudeau, of course. He says a national carbon tax/price is the most effective way to reduce emissions linked to climate change.
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Which raises the question of why the U.S. has been more successful at cutting emissions than Canada without one. Both countries had targets of reducing emissions to 17% below 2005 levels by 2020.
The Americans, without a national carbon tax, reduced them by 21%. Canada, with a national carbon tax, reduced them by 9%.
The difference in approaches in Canada compared to the U.S. go all the way back to former Liberal PM Jean Chretien signing Canada on to the United Nations Kyoto climate accord in 1997. That committed Canada to reducing emissions to an average of 6% below 1990 levels from 2008 to 2012, although a senior aide to Chretien later admitted the Liberals knew they couldn’t hit that target.
The U.S., despite global warming guru Al Gore being vice-president in the Bill Clinton administration at the time, rejected Kyoto after the U.S. Senate said it would damage the American economy.
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U.S. president Barack Obama, who signed the Paris climate accord along with Trudeau in 2015, failed to introduce a national cap-and-trade system in 2010 — a carbon tax by another name — for the same reason.
(In the 2008 federal election, the Stephen Harper Conservatives supported a national cap-and-trade system believing the U.S. was about to implement one, giving Canada no choice but to do the same. When cap and trade was rejected in the U.S. the Conservatives abandoned the plan.)
What the Americans did, which Canada didn’t do, was to let market forces lower emissions.
For example, while Canadian provinces were banning fracking, the Americans used it to free up huge natural gas reserves, making it economically advantageous to replace coal-fired electricity with natural gas. Because natural gas burns at half the carbon-intensity of coal, U.S. emissions fell dramatically.
The G-7, of which Canada and the U.S. are members, and the European Union, classify natural gas as a transitional form of green energy.
All of which brings us to Biden’s US$370 billion climate plan approved by Congress in August, which doesn’t include a national carbon tax.
It earmarks hundreds of billions of dollars for U.S. consumers to buy electric vehicles and other green energy products and services and for America’s manufacturing and industrial sectors to develop and adopt new sources of green energy.
It also gives America’s oil and gas sector greater access to offshore drilling in the Gulf of Mexico and Alaska, expanded tax credits for coal and natural-gas fired electricity plants that use carbon capture technology, incentives to build wind and solar projects in areas where coal mines or coal plants have closed, and $60 billion to low-income and minority communities disproportionately impacted by climate change.
It includes penalties for industries exceeding U.S. methane emission limits starting in 2024, but nothing that comes close to a national carbon tax as we have here.
Biden promises to lower U.S. emissions to 50% below 2005 levels by 2030, while Trudeau promises a cut of 40% to 45%. We’ll see what happens.