Is Win-Win Possible? Can Canada’s Government Achieve Its Paris Commitment . . . and Get Re-elected?

For the past 6 months, I and co-researchers Mikela Hein and Tiffany Vass have been developing our national energy-economy model (CIMS) to simulate climate policy scenarios that explore the effect of current Canadian policies, and contrast this with (1) the must-price-emissions approach that some are advocating, and (2) an alternative approach that emphasizes a significant role for flexible regulations, similar to what California is doing with regulations on electricity, vehicles, fuels, etc. Available on this link, our report is called “Is Win-Win Possible? Can Canada’s Government Achieve Its Paris Commitment . . .  and Get Re-elected?"

If policy advisors and policy makers are to learn anything from the past 30 years of ineffective climate policies, they would hopefully see that climate policy is very difficult politically and emissions pricing is especially difficult. Canada intends to achieve its Paris commitment. To do so by emphasizing emissions pricing would require a price that climbs by about $15 per year to reach $200 per tonne of CO2 by 2030. It is highly unlikely that federal or provincial politicians will pursue this approach. Fortunately, they don’t have to. As noted, California is especially relying on flexible regulations. Such an approach is likely to be less economically efficient than emissions pricing. But researchers can help policy makers by estimating the magnitude of the economic efficiency trade-off for political acceptance. Our report attempts to start that process.

My interview in "Building a consensus on climate change? Not so easy, after all" in Macleans

Here is the link to an article by John Geddes "Building a consensus on climate change? Not so easy, after all", Ottawa bureau chief at Maclean’s, who does a good job of distilling my point that while carbon pricing is the most economically efficient GHG reduction policy, it is willful blindness to assume that economic efficiency is the only criterion when trying to implement climate policy. If regulations are more politically acceptable, especially for doing the heavy lifting, then put some intelligence (even economic intelligence) into designing market-oriented regulations that are relatively economically efficient.



One might notice by the way, that in the first two weeks of March Trudeau failed to get provinces to agree to even a small carbon price (that would have virtually no effect on emissions - such as $15 or $30 per tonne of CO2)) and then went to Washington and quickly signed an agreement with Obama to dramatically reduce methane emissions from the oil and gas industry. No mention of emissions pricing. It will be regulation." 

Want an effective climate policy? Heed the evidence

This article appeared in Policy Options in February 2016.

Want an effective climate policy? Heed the evidence

Carbon taxes and caps may be most effective in economic theory, but smart regulation will produce better climate policy for our political reality.

Wisely, Prime Minister Justin Trudeau resisted the temptation at the Paris climate summit in December to double down on Stephen Harper’s 2030 target for Canadian carbon dioxide (CO2) emissions. While future emissions promises are easily made, effective climate policy is devilishly difficult. To have any chance, Trudeau needs to stay wise — which starts by avoiding advice from technology and policy advocates who themselves avoid inconvenient evidence from leading climate policy research and real-world experience. What does this evidence tell us?

For one thing, it’s a mistake to expect a big contribution from energy efficiency. For three decades, governments and utilities have made efficiency the focus of their emissions reduction efforts, with negligible results. Yes, energy efficiency is always improving, and we can slightly accelerate that trend. But humans require energy for basic needs and, more important, we keep inventing frivolous devices that use more. (Need evidence? Stroll through your local big-box store.)

European fuel regulations and Canadian hypocrisy: My trip to Europe with Jim Hansen

Prime Minister Harper promised in 2006 to reduce Canadian emissions 20% by 2020 (in 2009 he changed it slightly to 17%). Only two policy approaches can achieve this: emissions pricing or regulations (or a combination). But he rejected emissions pricing, whether carbon tax or cap-and-trade. So this leaves regulations on technologies and fuels, which he promised. However, he has not implemented regulations to achieve his 2020 target, and, according to Canada’s Auditor General, even an immediate aggressive effort is unlikely to succeed – he only has 7 years left after doing virtually nothing since making the promise 7 years ago. In any case, he is instead promoting rapid expansion of the Alberta oil sands, which, according to Environment Canada, will leave Canadian emissions in 2020 at least 7% above rather than 17% below their 2006 level.

Alberta’s (Non)-Carbon Tax and Our Threatened Climate

Why is Alberta’s policy a regulation and not a tax?

Alberta’s government officially says it doesn’t have a carbon tax, and I agree. But if I had a dollar for every time I’ve heard someone claim it does, I could buy a lot of anti-oil sands ads, and maybe a politician along the way.

I hear about Alberta’s so-called carbon tax from business people, politicians, journalists, environmentalists, sometimes even economists (who should know better). But the policy in question is, in fact, a “performance regulation,” that sets a maximum “emissions-intensity” for industries, and fines them $15 for each tonne of CO₂ emissions in excess of that maximum.

Was the carbon tax smart politics? Or the cause of a “near run thing” election?

By Mark Jaccard
Originally published in the Vancouver Sun May 20, 2009

During BC’s election campaign and in post-election analysis, media commentators have lauded Gordon Campbell’s carbon tax as a “political masterstoke” while panning Carol James’ anti-tax campaign as “not so bright.” I think the evidence says otherwise. I think Campbell won the election in spite of the carbon tax not because of it and that James almost rode a brilliant strategy to an upset victory in an election that would otherwise not have been close.

Media pundits seem to forget that throughout 2007 the Liberals were a popular government in cruise-control, with a polling lead ranging from 12 to 18 percent over the NDP. With the election just over a year away, NDP prospects looked dismal – until the Liberals launched the carbon tax in February 2008.

Although earlier statements suggested they would support a carbon tax, the NDP quickly recognized this political gift from Campbell. Within months they launched their axe-the-tax campaign, focusing on its so-called unfairness to rural, northern, suburban and coastal residents and linking the policy to Campbell’s so-called “arrogant and uncaring personality.” By November, in an amazing reversal of fortune, polls placed the NDP at parity with the Liberals.

But in late 2008, Campbell got lucky – doubly-lucky. First, the global economic crisis refocused voters on who should govern during tough economic times, which rightly or wrongly favoured Campbell. Second, the economic collapse precipitated falling oil prices, in turn dropping gasoline prices by 30 percent. With the focus shifted from the carbon tax to the economy, the Liberals rebounded to a 5 to 10 point lead in polls prior to the election campaign.

Although we cannot run history twice, it is interesting to ask what the polling numbers would have been if there had never been a carbon tax and the NDP response. My guess is that the Liberals would have had at least a 12 and perhaps a 20 point lead over the NDP by April of this year – a popular government in 2007, with the additional benefit of growing voter support during the global economic crisis of 2008-2009.

Instead, the carbon tax gave the NDP a fighting chance. But to win the election, it still needed votes from a wide ideological spectrum (especially without the split of right and centre voters between two political parties, as occurred in 1973, 1991 and 1996 – the only elections the NDP has won). This explains why Carol James started the campaign by promising voters she would still axe the tax. Her target was key swing ridings in the interior (such as Prince George) and greater Vancouver’s outer suburbs (such as Surrey). Then, in mid-campaign, James shifted her environmental focus to attacking private hydropower development. Her goal in this case was to pull enough voters away from the Liberals and especially the Greens to win key seats in Vancouver and adjacent suburbs. The message that only an NDP victory would stop hydropower development probably contributed to the last minute Green decline to only 8 percent.

Pundits are now concluding that because James lost the election and because it cost her some votes, her anti-tax campaign was dumb politics. This is faulty logic. They should be asking whether or not her strategy provided a net gain or loss of votes in the critical swing ridings she needed to win the election. My guess is that it provided a significant net gain relative to where the NDP stood in 2007 and where they were likely to stand in the 2009 election, given the unfavourable external developments beyond their control – global recession, falling oil prices.

It will be some time before political scientists assess the likelihood of my argument. So why care now? The NDP lost. The tax remains.

I feel differently. I believe Gordon Campbell, and other politicians like him who sincerely want to reduce greenhouse gases, must understand that – as the Duke of Wellington said after barely defeating Napoleon at Waterloo – this election was “a near run thing.” And the main reason was the carbon tax.

Effective climate policy is extremely difficult to implement and sustain. Only via some mix of emissions pricing (carbon tax and/or cap and trade), regulations (vehicle standards, building codes), and public investment (public transit) will we reduce emissions. All of these policies have costs. All cause winners and losers. At the same time, most people tell pollsters they are already doing all they can to reduce emissions. They also say any government policy that increases their cost of living is unfair.

This arena remains deadly dangerous for the well-intentioned politician. As he goes forward with climate policy over the next four years, Gordon Campbell might well reflect on the political lessons from his own near run thing.