It was never going to be a winsome decision, but the federal government’s determination to impose some form of carbon pricing on the provinces is proving to be the first great test of the proposition that when it comes to both the environment and economy, one can have one’s cake and eat it too.
As Nova Scotia’s, Newfoundland and Labrador’s and Saskatchewan’s environment ministers stormed out of a meeting convened last week to explain the Trudeau government’s determination to unilaterally impose a framework that would exact a $10-per-tonne price on carbon beginning in 2018 – a levy that would increase by $10 per tonne each year until hitting $50 per tonne in 2022 – New Brunswick’s man on the ground shrugged sanguinely and, in effect, declared, “Hey, no big deal”.
Repeating his government’s oft-sung melody on the subject, Environment Minister Serge Rousselle trilled, “Any price on carbon brought forward by our government will be revenue neutral. And we learned from the Trudeau government that all the money received from this province will be sent back.”
That money could, by some estimates, amount to as much as $800 million a year, depending on the mechanisms the Province uses to fulfill its climate-change obligations to Ottawa. But, says Premier Brian Gallant, not to worry. “If we in New Brunswick are to get any type of monies from a price on carbon, we would reinvest that money right away. It would very be investments that would spur economic growth and a green economy. . .We agree with a lot of what is happening with the Trudeau government. They have focused on growth and they’re focused on making sure our economy is sustainable and that we transition to a low-carbon economy, which we agree with as well.”
Still, the devil is in the details. The degree to which a carbon tax – or, alternatively, a cap and trade system – properly addresses the larger problem of greenhouse gas emissions depends entirely on the technological savvy of any given province. Put another way: Are we, in New Brunswick, ramped up to pour the money clawed back from polluting industries into cleaner ones? Or will taxpayers simply be left holding bag of good government intentions – again?
On paper and in theory, the World Bank says there’s plenty of evidence that carbon pricing works. “A price on carbon helps shift the burden for the damage back to those who are responsible for it, and who can reduce it,” it notes on one of its many web pages. “Instead of dictating who should reduce emissions where and how, a carbon price gives an economic signal and polluters decide for themselves. In this way, the overall environmental goal is achieved. The carbon price also stimulates clean technology and market innovation, fuelling new, low-carbon drivers of economic growth.”
Moreover, it observes, “Some 40 countries and more than 20 cities, states and provinces already use carbon pricing mechanisms, with more planning to implement them in the future. Together the carbon pricing schemes now in place cover about half their emissions, which translates to about 13 per cent of annual global greenhouse gas emissions.”
What this observation fails to clarify, however, is that where carbon-pricing plans appear to achieve the desired results, they do so as a result of many years of coordinated implementation schemes engineered by both governmental and private-sector players. In New Brunswick and, indeed, the rest of Canada, we do not enjoy the luxury of time.
We may, one day, have our cake and eat it too. But, for now, the taste will be bittersweet.