Make provinces pay for their emissions

The matching payment policy always produces a spirited discussion in Canada, particularly between Quebec and Alberta. During a recent election, a province’s quasi-referendum on changing the concept of equalization was supported by a substantial 41%. Not the one that took place in Alberta this month, I’m talking about Quebec.

The Bloc Québécois won 41 percent of seats in Quebec in the most recent federal elections and one of the pillars of the party’s platform was the idea of ​​green equalization. Green equalization proposes that provinces that produce more than the national average of greenhouse gas (GHG) emissions should pay provinces that are below the average. For instance, Alberta would pay and Quebec would receive.

You might think this was just the BQ kicking sand in Alberta’s face given the long-term complaints from Albertans who feel their compensation money supports the Quebec lifestyle. But it’s worth seeing how equalization might make sense in terms of climate change policy.

First, let’s look at what per capita emissions look like to understand where the BQ was coming from. Near 50 percent of our national emissions are produced by Alberta and Saskatchewan; let’s refer to this composite region as Albertawan. With 63 tons of CO2 per person in 2019, if Albertawan was its own country, it would be the worst emitter per capita in the world with much. The next closest is Brunei with 39, and the next worst major economy is Australia with 25.

Given the enormous hydroelectric generation in Quebec, you might think of it as one of the greenest economies in the world. But no, at 10 tons per person, they are not even as good as other industrialized countries, such as France or the UK, and surprisingly, they are even worse than China. But they look great compared to Albertawan. Ontario is only slightly worse than Quebec at 11 tons per person. BC is the other major total provincial emitter and is somewhat worse than Ontario in per capita terms at 13 tons per person. This is clearly not in the same league as Albertawan, although the British Columbia government’s official policy around LNG indicates that it wants to move in that direction.

So Canada has huge regional disparities in terms of emissions per person. And what makes it worse is when you realize that a lot of those Albertawan emissions are being made to export fossil fuels to the US, almost 80 percent of our oil is exported there. The United States is one of the largest industrialized per capita emitters in the world, with 18 tons per person. The only major developed countries with the worst records are Canada and Australia. Per capita stratospheric emissions from Albertawan, and therefore Canada, provide fossil fuels for America’s own bad emissions.

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Albertawan is terrible in terms of GHG per capita. Central Canada is mediocre. But the government of Canada has now set itself the Herculean task of reducing emissions by 45 percent from the 2005 level by 2030. And based on our lousy track record, we have to do something very different than what we’ve been doing. because our efforts to date are not working. We have proven it over and over again since the 1980s. For example, since the Trudeau government first came to power with all its sound and fury over climate change action, our national GHG emissions have increased.

The BQ was suggesting that Albertawan should pay a penalty for incurring those huge GHG emissions and the provinces that are doing the best should receive those payments. You may think it sounds crazy, but it is very similar to what the federal government has set for the carbon tax from large industrial emitters, the Results-based pricing system. It is a system in which the tax is based on setting the price of the GHG produced per unit of production over a reference point established for specific industries (for example, cement), with credits granted for those that are below the point of production. reference.

Imagine a system similar to the methodology of large government emitters instead of GHG by population. Each year Albertawan would pay a penalty for each unit of carbon per person over an annual benchmark. Remember, Albertawan in 2019 was 63 tons per capita and the Canadian average was 19, so that would be a significant payoff. Provinces such as Ontario and Quebec, being below the benchmark, would receive a payment that must be applied to green investment.

When you consider that between 2005 and 2019, Alberta increased emissions by 15% and Ontario managed to reduce them by 21%, there needs to be something that incentivizes the provinces to do better. What better way than through policies that penalize provinces for increasing emissions and reward provinces that cut back? While the carbon tax can incentivize individuals and corporations, the equalization program would incentivize governments to act.

And that has been our problem from the beginning. For dramatic and meaningful change to occur, we need governments to shape effective investments and policies; companies and individuals cannot do it themselves. Instead, we have smoky hands and mirrors greetings and goals that we have no plans to come close to achieving. The reason? There is no cost to a failing province.

Green EQ would change that. If Albertawan wanted to continue issuing at current per capita levels, it would at least be forced to fund green investments in other jurisdictions. Or even better, imagine a scenario where equalization worked by incentivizing Albertawan to stop producing fossil fuels.

We need to do something different because more of the same will give us more of the same abysmal results. If we really care about climate change, we must change something, and it must be big. Green equalization might be the most important thing that is needed.

Ross Belot is a retired senior manager for one of Canada’s largest energy companies. Now he is an environmental poet.