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The Fragmentation of Canadian Climate Policies

Keith Stewart of Greenpeace on Canada’s carbon tax, cap and trade, and the premiers climate conference in Quebec City

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SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I’m Sharmini Peries coming to you from Baltimore.

On Monday just before leaving for a meeting of the First Ministers, that is the premiers of the provinces in Canada, for a climate change summit in Quebec City, Ontario Premier Kathleen Wynne made an announcement that Ontario would be joining the province of Quebec’s carbon cap and trade program. Let’s have a look at what she had to say.

KATHLEEN WYNNE, PREMIER OF ONTARIO: Our changing climate has devastated communities, it’s damaged homes, businesses and crops. It’s increased insurance costs. It endangers our air, it endangers our water, and the health of our children and our grandchildren.

PERIES: The question is, how much will this really limit Ontario’s greenhouse gas emissions, and is cap and trade the most effective way to combat climate change? With us to discuss all of this is Keith Stewart. He leads Greenpeace Canada’s Climate and Energy Campaign, and is also a part-time faculty member at the University of Toronto where he teaches a course on energy policy and the environment.

Thank you so much for joining us and welcome back, Keith.

KEITH STEWART, RESEARCHER GREENPEACE CANADA: Thanks for having me on.

PERIES: So Keith, let’s unpack this a little bit. Quebec introduced cap and trade two years ago, and how effective has that been in combating greenhouse gas emissions? Do we have any measurements?

STEWART: So Quebec is actually joining with California. They have an integrated system through something called the Western Climate Initiative. Ontario first said they were going to join the system back in 2008, but then kind of got cold feet when the recession hit. So Quebec’s system is already integrated with California and now with Ontario.

The idea of cap and trade is you set an overall limit on pollution. That limit comes down over time. People who can reduce cheaply get to sell credits to people who have more trouble doing it, the idea being that you then have the lowest cost reductions. But the key thing here is you’re putting a price on pollution and that that price is going to go up over time as the pollution, allowable pollution levels come down.

You know, in theory it’s a great system. In practice it depends on how exactly it’s implemented. And you know, the Western Climate Initiative has learned a lot from things that went wrong with some of the earlier systems. They’ve brought in some systems which are–so parts of it are actually a little bit more like a carbon tax. But overall, we think this is a great move by Ontario. We of course will be in there with all the corporate lobbyists fighting over the details. But you know, it’s a big step forward.

PERIES: When you say how it’s implemented, what do you mean by that?

STEWART: Well, the big questions are how much pollution’s going to be allowed? How high is the cap? Because if it’s really high, then no one really has to change anything. If it–it’s how much of overall greenhouse gas emissions are covered. So in Quebec and in California it’s actually about 85% of total greenhouse gas emissions which are caught by this cap and trade system. That’s pretty good. You compare that a place like Alberta where they have, they are very proud of the fact they have this carbon price. Well, it’s only actually pricing about 3% of the actual tonnes emitted.

Then the other big question is what are the loopholes built into this? Is there a way for people to avoid paying it? You know, in Quebec and California some of the permits are given out for free. We’d like to see them all auctioned, but that’s supposed to be moved to 100% auction as time goes on. People get used to the system. But also what kind of offsets are there? Can you buy credits from people who aren’t part of the system? We would like to see that severely limited, because those are often–end up being dodgy, at best.

PERIES: Now, the premier of British Columbia, Christy Clark, has skipped the premiers’ climate change summit. Is that because she doesn’t agree with what’s being discussed at the summit?

STEWART: I’m not quite sure why she’s not there. I mean, her–BC actually has a carbon tax, which in many ways is a simpler, more elegant solution to this problem of putting a price on pollution that’s actually stronger than what Quebec has right now, or California, or what’s being contemplated by Ontario. I mean, that might change over time, but certainly right now she’s got the best carbon pricing system in the country.

She said that she’s not going to this because she’s going to be going to another event later this week where she’s going to talk to the UN, actually, about–or no, sorry, the World Bank, about how BC’s put a price on carbon. I mean, I don’t quite understand why she’s not there.

The other person of course who isn’t there is the Alberta premier, and Alberta puts out more greenhouse gas emissions than Ontario and Quebec combined, even though Ontario and Quebec are actually the largest provinces by population. And he’s not there because he’s in the middle of an election campaign he just called, but also I think because Alberta doesn’t actually have a plan to reduce pollution.

PERIES: And Alberta being largely an oil economy.

STEWART; Yeah. I mean, the reason their emissions are so high is because oil is at the heart of their economy right now. Particularly tar sands, which is very carbon-intensive. One of the reasons environmental groups like mine are saying we need to stop digging up that stuff, because it’s the dirtiest oil on the planet. But Alberta, the emissions there are really, really high and they’re growing quickly.

So all the work that actually Ontario and Quebec have done over the last year is Ontario, my home province, has actually closed all of its coal plants in an effort to reduce pollution. All of those measures have actually been offset by increases in Alberta. So until we get Alberta part of this national, some kind of a national system, Canada’s going to have trouble making big cuts overall. And certainly the projections going forward is all the work that’s being done by Ontario, Quebec, and BC is being undone by the increases in the tar sands.

PERIES: So the cap and trade plan is perhaps a better one when it comes to these kinds of situations.

STEWART: Well, what we really–I mean, part of the problem in Canada is we’re developing a national energy strategy. That’s actually what the premiers are meeting on in Quebec today, and they’re trying to look at how they can integrate climate change into that. We’re doing all this without any involvement from the federal government. The federal government is hands-off, isn’t doing anything they’re just asking the provinces, you know, tell us what you’re doing and we’ll report that to the UN as our climate action.

That’s fine if everyone is pulling their weight, but right now we have some provinces that aren’t. We really need the federal government to be a part of the solution, and not just a bystander or even–they actually attack the idea of putting a price on carbon. So until–well, we’re having an election this year in Canada and we’re hoping this will be a big part of the election, and that after the election we’ll have a government that is interested in being part of the solution.

PERIES: And do I take it from your reference to the carbon tax being a cleaner process, easier to administer that you favor that over the cap and trade policy?

STEWART: Either one can work. You can have good carbon taxes, bad carbon taxes, good cap and trade, bad carbon trade–cap and trade. It’s in the details. It’s just easier to do a good carbon tax. It’s simpler. Governments–if there’s something governments know how to do well, it’s tax things. With a cap and trade system it’s quite complicated, it’s not as transparent. There’s all sorts of technical reasons why policy experts might say it’s actually preferable for a variety of reasons, you know.

If it was up to me I would have gone with a carbon tax, but I do think we can make this work. And I think actually the basic architecture that Ontario is buying into by signing this deal with Quebec is pretty good, and as long as corporate lobbyists don’t get to insert a bunch of loopholes this is going to be a big part of the solution. Not least because it’ll be generating about $2 billion a year, and the province has said, we will be investing that in things like public transit. In green energy. In energy efficiency. That’s going to probably have a much, an even larger impact in terms of bringing down emissions.

PERIES: And do you think in terms of Quebec having practiced cap and trade for the last two years, again, is there any measurable outcome from that practice?

STEWART: So I mean, Quebec–the cap and trade system is two years old, it really sort of started taking effect last year. So you can’t really say after one year it’s had a huge impact. But certainly it’s going to affect decisions for businesses going forward in terms of they’re going to be saying, okay, I have to do something to reduce. And right now we’re still kind of setting the baseline.

But the–this is sending an economic signal to companies, to consumers, that you’re better going with the cleaner option. And when the cleaner option also happens to be cheaper, which is what making polluters pay for their pollution does, that is–that’s a good thing. Because otherwise we end up paying the price in polluted air, in floods and extreme weather caused from climate change. I think people would much rather have that investment in great public transit, in more efficient vehicles, and in helping people make the switch to a low-carbon economy.

PERIES: Right. Keith Stewart with Greenpeace Canada. Thank you so much for joining us today.

STEWART: Thanks for having me on again.

PERIES: And thank you for joining us on The Real News Network.

End

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