Canadian Prime Minister Justin Trudeau made one of his now frequent jaunts to New York in late April to participate in a United Nations’ signing of the global climate agreement - all part of his eagerness to present Canada as a “champion of clean energy.”
At the same time, the scope of his challenge was unfolding back at home, with a new government inventory report demonstrating the plodding progress towards curbing greenhouse gas emissions.
That set the stage for a faceoff between federal Environment Minister Catherine McKenna and the Saskatchewan government, which presents the biggest obstacle to the Trudeau government’s efforts to gain buy-in for its proposal to set a national carbon price of C$30 per metric ton.
Although Canada accounts for only 1.6 percent of global emissions, according to McKenna’s department, it ranks among the highest per capita emitters on the planet.
A new national inventory had some troubling trends for McKenna and Canada’s ability to meet its commitment to reduce emissions 30 percent below 2005 levels by 2030.
The latest statistics show Canada generated 732 million metric tons of carbon dioxide and other equivalents in 2014, up 20 percent from 1990, but 15 million metric tons below 2005 levels.
Emissions actually dropped in 2009 due to the global economic downturn, but have risen 5.2 percent since then, with the energy sector - upstream and downstream - making up 81 percent of the 2014 levels.
Industry production, emissions up
“In 2014, emissions from mining and upstream oil and gas production were more than twice their 1990 values,” the report said. “This is consistent with a 91 percent increase in total production of crude oil and natural gas over the period, largely for exports, which have grown by over 200 percent.”
Among the provinces, Ontario was down 19 percent in the 2005-14 period, but four were up, led by Alberta’s 17 percent increase.
“You’re absolutely right, emissions are going up and they need to go down,” McKenna told reporters after being grilled for two hours by the House of Commons environment committee.
She said that turning the trajectory around poses an enormous task.
Members of the committee wanted to know how McKenna would protect Canadian businesses from unfair foreign competition under her preferred option of carbon pricing and why it has failed to eliminate subsidies for the fossil fuel industries.
The best McKenna could do was explain how complicated the issues are and assure members and outline the efforts being made by federal-provincial working groups to reach a national strategy for tackling climate change.
Carbon tax vs. capture-and-storage
She then prepared to visit Saskatchewan’s flagship Boundary Dam carbon capture-and-storage project which Premier Brad Wall holds up as the alternative to the Canadian government’s insistence on a national carbon price, which it proposes to collect either through a tax or a cap-and-trade system.
But McKenna carefully sidestepped questions on whether the Trudeau government is prepared to impose a mandatory price over the objections of provincial governments.
She said a discussion about the best means of putting a price on carbon is taking place across Canada.
“I think this is an opportunity for Canada,” she said. “When you put a price on carbon, what you do is price pollution, something we want less of.”
When provincial and territorial premiers agreed in March to study carbon pricing “mechanisms,” Wall - recently re-elected in a landslide victory - said his preference is for carbon capture-and-storage.
McKenna conceded that thinly populated regions, especially in Canada’s North, count heavily on diesel fuel for their power and would be penalized even more if they faced a carbon tax or cap-and-trade system.
However, she noted that Ontario, Quebec, British Columbia and Alberta - the four most populous provinces - have either introduced or are about to adopt some form of carbon price.
Given the different economic profiles of provinces and territories, the Canadian government must choose to act on a climate change plan in the “most cost-effective way,” McKenna said.
So, before setting the stage for a showdown with Saskatchewan, she said her objective is to discuss “more broadly how we work together” on lowering greenhouse gas emissions.
Environmental protection spend
Despite McKenna’s apparent preference for a soft-touch at this stage, the Trudeau government plans to spend more than C$7 billion over the next two years on environmental protection, targeting expanded public transit, fixing aging water and wastewater infrastructure and supporting provincial efforts to reduce greenhouse gas emissions.
Trudeau has also hinted that unless the provinces and territories can agree this fall to a national plan his government is ready to assert its role.
Finance Minister Bill Morneau has characterized the new government as a “champion of clean growth and speedy transition to a low-carbon economy.”
Although the provinces and territories have agreed to lay the groundwork for a pan-Canadian strategy on clean growth and climate change, they have shown little or no sign of moving towards a consensus on whether there should be a national floor price for carbon.
Morneau, who rejects the need to choose between a strong economy and a clean environment, insisted Canada must claim a leadership role on the issue if it hopes to make a valid global case for developing its oil sands and natural gas resources.
Finance Canada said “resources will be allocated to those projects that yield the greatest absolute greenhouse gas reductions for the lowest cost.”
To that end, the government will inject money into its venture-capital agency, Sustainable Development Technology Canada, and Natural Resources Canada to boost research and commercialization of clean technology.
