GOLDSTEIN: Trudeau’s climate plan makes no sense, according to Trudeau

The U.S. does not have a national carbon tax and has been more successful at lowering emissions than Canada

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Many Canadian economists said last week that while “Canada could abandon carbon pricing and still hit our climate targets by using other types of regulations and subsidies … it would be much more costly to do so.”

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That’s similar to the point Prime Minister Justin Trudeau made recently, when he said he brought in his carbon tax because, “I prefer a clean, market-based solution” to addressing climate change, as opposed to “the heavy hand of regulations” and “incentives … subsidies and rewards.”

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The problem is that Trudeau’s claim made no sense because his climate change policy includes not only a national carbon tax, but also “the heavy hand of regulations” plus “incentives … subsidies and rewards” to the private sector by a government attempting to pick winners and losers in the marketplace, which seldom ends well.

Some of the economists who signed the letter last week have since pointed out that while they support a carbon tax, their statement was not an uncritical endorsement of Trudeau’s climate change policies.

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That said, they are obviously more critical of Conservative Leader Pierre Poilievre’s promise to scrap Trudeau’s carbon tax if he wins the next election, without saying what his alternative plan is, if he believes anthropogenic (human caused) climate change is real.

But if Trudeau believes his carbon tax is the most efficient and least costly way to reduce industrial greenhouse gas emissions linked to climate change, why doesn’t his government keep track of how much it is reducing emissions, as opposed to other government measures?

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Instead, the Trudeau government guesstimates that the carbon tax (meaning the clean fuel standard and the output-based pricing system for large emitters) will be responsible for no more than one-third of planned emission reductions in 2030.

That means Trudeau is relying on other, presumably less efficient measures according to his own argument, to achieve at least two-thirds of Canada’s emission reductions in 2030.

(The Canadian Climate Institute said recently it is actually the output-based pricing system for large emitters that will be responsible for most emission reductions, as opposed to the fuel charge aimed at Canadian consumers.)

But if Trudeau prefers a carbon tax to “the heavy hand of government regulation”, why does his plan, in addition to his carbon tax, include “clean fuel” and “clean electricity” regulations, a “Regulatory Framework for an Oil and Gas Sector Greenhouse Gas Emissions Cap” and “regulated targets for zero-emission vehicles” under “Canada’s Electric Vehicle Availability Standard”?

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In terms of his claim that his carbon tax was the alternative to “incentives … subsidies and rewards” to private industry, what does he call the multi-billion-dollar subsidy war his government is in with the U.S. to attract electric vehicle battery plants to Canada, along with other forms of industrial green technology?

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Finance Minister Chrystia Freeland said following her budget presentation last year that the Trudeau government would not have invested as heavily in clean energy subsidies as it is now doing, were it not for the passage of U.S. President Joe Biden’s bizarrely-named Inflation Reduction Act, which included massive subsidies to the private sector for clean technology.

Freeland told CTV’s Power Play: “I don’t think we would have done as much, had the IRA not been introduced,” which she called a “game changer” because the U.S has “put a ton of money on the table, and it was really important for us, having been ahead in this race, not to fall behind.”

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The difference from Canada, or course, is that the U.S. does not have a national carbon tax and has been more successful at lowering emissions than Canada.

In the wake of last year’s federal budget, Environment Minister Steven Guilbeault boasted that the Trudeau government’s total investment to address climate change is now “north of $200 billion” on “more than 100 measures to support climate action” in addition to the carbon tax.

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Logically, if Trudeau believes his national carbon tax is the most efficient and economical way to reduce emissions, he should increase it far above his current policy of raising it to $80 per tonne of emissions on April 1, increasing to $170 per tonne in 2030, along with hiking carbon tax rebates.

Then he should eliminate most if not all of the regulations and subsidies he says he doesn’t support, which are currently the biggest part of his climate change plan.

Of course, that’s unlikely to happen given that his government is currently under siege for its 23% hike to the carbon tax effective Monday, to $80 per tonne, up from $65, during an affordability crisis for Canadians.

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