A version of the following article appeared in The Peace and Environment News (PEN)
Putting a Price on Carbon: An Idea Whose Time Has Come - Again
This week the National Round Table on the Environment and the Economy (NRTEE) made headlines by proposing a new idea – but it’s not as new as you might think.
Canada’s policies on energy, finance, and climate change are inextricably linked. In fact, modernizing the financial and energy policies of our federal, provincial, and municipal governments is the most effective thing we can do to avert catastrophic climate change.
Canada’s current federal energy policy can be summed up as this: drill, dig, scrape, pump, and suck as much fossil fuels as we can, as fast as we can, to make a buck on North America’s deadly addiction to wasteful energy consumption.
The cornerstone of our current energy folly is the Tar Sands of northern Alberta. It is by far the dirtiest source of petroleum on the planet, and it requires vast amounts of energy just to extract it. In fact just producing oil from the tar sands is the single largest source of growth in Canada’s GHG pollution. That’s just production, not even counting the end-use of burning the stuff. Tar Sands production is sucking a mind boggling 1 billion litres of water from the Athabasca river every day. It has already caused the deforestation and strip-mining of hundreds of square kilometres, with another 150,000 square kilometres of development leases to come. And the official policy of Canada and Alberta is to increase Tar Sands production by five times.
And would you believe that you and I, through our taxes, are subsidizing this devastation? Just one form of subsidy is known as the accelerated capital cost allowance. (If you are not a tax accountant just think of it as a tax write off for Tar Sands companies.) Thanks to the work of the Green Budget Coalition, this insane fiscal policy was partly corrected in the 2007 federal budget. But many subsidies remain, even though Tar Sands companies’ profits appear set to remain astronomical as far as the eye can see.
By now you are thinking: nothing else could come close to the Tar Sands in the breadth of its ecological devastation and the depth of its stupidity. Sadly, you’d be wrong. There is the Mackenzie Gas Project.
The Mackenzie Gas project is about as historically far-reaching in its implications for Canada’s north as the commercial cod fishery was for the Atlantic region. The scale of what is at stake is as breathtaking as the land itself. Canada’s wildest big river, the Mackenzie River runs 1800 kilometres without a single bridge or dam. The project would run a pipeline and roads along its length, crossing 580 rivers and streams along the way. The Mackenzie delta, the world’s fourth largest Arctic delta, would be transformed by gas wells, production pads, gathering pipelines, and other facilities. Six internationally recognized Important Bird Areas occurring along or near the Mackenzie River are breeding or staging areas for millions of geese, tundra swans and other migratory birds. The valley is home to Dene and Inuvialuit first nations, some of whom are still negotiating land claims with Canada. The pipeline would carry gas through this territory, the entire length of the Northwest Territories and into northern Alberta.
Why northern Alberta, you’re thinking… Sadly, you would be right: to feed the energy demands of the tar sands. The priceless north is to be transformed into a petro-industrial landscape to produce oil from the dirtiest source on the planet. And you guessed it: the companies behind the Mackenzie Gas project are angling for billions of federal tax dollars to help make it happen.
The good news is that there is a single, simple, policy measure that can combat all this insanity and instead make our whole economy work towards reducing GHG pollution. Imagine, one thing that the federal government can do that will unleash all the ingenuity and economic might of big business to work harder and faster at greening our economy than government ever could. Now imagine that this single step would also give our government the capacity to invest in energy efficiency, renewable energy, and other climate change solutions on a scale never seen in this country. Of course there might be long term side effects to this policy, like strengthening Canada’s economy, allowing a reduction in income tax and payroll taxes, and reducing unemployment.
So what is this simple policy? Putting a price on carbon. The mechanism could be either through a carbon tax or a cap and trade system. Either could work as long as the system is designed properly. For instance the price would have to start out at around $30 per tonne of carbon dioxide released into the atmosphere, and move towards $75 per tonne. There are lots of details to this idea, but you now have the gist of it. This policy is the number one recommendation of the Green Budget Coalition for the 2008 federal budget. The environmental community was advocating putting a price on carbon back in the eighties when Brian Mulroney was PM. And just this week the idea got a strong endorsement from the business-heavy NRTEE.
Has carbon pricing become inevitable? I think so, and many in the private sector agree. When will it happen? Time will tell. With all its benefits and positive side effects you would think that politicians would be tripping over each other to be the first to implement a carbon pricing policy.
Jean Langlois is the National Campaigns Director for the Sierra Club of Canada
To learn more, Jean recommends:
And pick up a copy of William Marsden’s book: Stupid to the Last Drop: How Alberta Is Bringing Environmental Armageddon to Canada (And Doesn't Seem to Care).