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Alberta takes the lead in climate-change policy

Now, we need other jurisdictions to step up to the plate

Jul 1, 2016

by Michael Ganley

The NDP government introduced Bill 20, the Climate Leadership Implementation Act, in May. It is a bold and important step in the province’s efforts to curb greenhouse gas emissions. It will impose a price of $20 per tonne of carbon dioxide emitted in 2017, rising to $30 in 2018. It will funnel some of the $9 billion raised over the next five years into investments intended to lower greenhouse gas emissions and reduce the small business corporate tax rate from three per cent to two.

The plan has been endorsed by everyone from Cenovus Energy’s vice-president of government and community relations, Jim Campbell, to Bank of England Governor Mark Carney to the Pembina Institute’s executive director Ed Whittingham, who said it put Alberta in league with the most progressive jurisdictions in the world. Former New York mayor Michael Bloomberg wrote that “Alberta’s leadership is being noticed far beyond its borders.”

The plan has also come under fire, including from nine Wildrose MLAs who signed a bewildering, offensive, indefensible letter comparing the plan to the deliberate starvation of millions of Ukrainians in the 1930s. More reasonable critics pointed out that the playing field will be unlevelled for Albertan businesses if similar costs are not imposed in other jurisdictions, and that a patchwork of carbon tax schemes varying from jurisdiction to jurisdiction is not the best way to go. Both good points. Some businesses simply complained about higher costs. The Canadian airline industry, for instance, voiced its disapproval, making the tiresome point that it will add to the cost of flying (which is exactly what a carbon tax is meant to do, since flying consumes so much fossil fuel).

The most disappointing aspect of the government’s plan is the generous rebate that will flow to low- and middle-income Albertans. The government estimates that fully 60 per cent of Albertans will be eligible for the full rebate, and another six per cent will get partial rebates. Two-thirds of Albertans will get money back. A couple earning a combined $100,000 will get money back. This is too generous and undermines the policy’s intent. A carbon tax is supposed to make the consumption of fossil fuels more expensive. That’s how you modify behaviour. The government argues that the rebate is tied to income and not energy use, so people still have a financial incentive to reduce household emissions. But we’ve always had that incentive: If you use less energy, you’ll save money. So far, that hasn’t been enough, and the rebate structure should not be so generous.

The most important thing now will be for other jurisdictions to step up to the plate with their own, equally ambitious plans to level the playing field. But a carbon tax is not just another tax or fee and shouldn’t be debated as if it were. It’s a transformational way to run our fiscal operations and a crucial step to limit the extent of damage that will be done by a warming climate. It’s a moral imperative that we take such a bold step for the sake of the planet and all of its inhabitants.

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