Gary Lamphier: Carbon tax would hit Alberta, Saskatchewan hard
"I really don't want the Ecofiscal Commission to be viewed as a group that's looking through rose-coloured glasses. I think there are groups advocating carbon pricing that might have rose coloured glasses, but that's not us," says McGill economics professor Chris Ragan, the commission's chairman. "This issue of competitiveness is very real and you've got to take it very seriously."
Gary Lamphier, Edmonton Journal
The aerial view shows the Suncor oilsands extraction facility near Fort McMurray, Alta. MARK RALSTON / AFP/Getty Images
Some 50,000 delegates from 190 countries will converge on terrorism-traumatized Paris in two weeks in a bid to hammer out a global deal to limit greenhouse gas emissions.
It's the 21st such gathering of the world's climate change Illuminati — otherwise known as the United Nations Climate Change Conference of the Parties — but even after two decades of yammering, the odds of participants finally reaching a binding global accord to curb emissions seem slim at best.
Actually, I'd put bigger odds on the Edmonton Oilers hoisting the Stanley Cup next spring, or eco-prophet David Suzuki tooling around the streets of Vancouver in a gas-guzzling Cadillac Escalade.
Despite the Doomsday rhetoric long trumpeted by eco-activists and the desire of some green zealots (Naomi Klein, et al) to crush global economic growth in the name of saving humanity, the masses don't seem to be buying the alarmism.
Oddly enough, everyday bread-and-butter concerns like job security and paying the mortgage rate as bigger public preoccupations than the prospect of environmental apocalypse, according to most opinion polls.
Moreover, huge rifts remain between mature industrialized nations and fast-growing developing economies, many of which heavily subsidize fossil fuel consumption while continuing to ramp up carbon emissions at a furious clip.
China, which accounts for nearly 30 per cent of global emissions, recently conceded that it is consuming as much as 17 per cent more coal each year than previously reported, based on revised government data.
"That could translate to almost a billion more tons of carbon dioxide released into the atmosphere annually in recent years, (or) more than all of Germany emits from fossil fuels," the New York Times reports.
Oops. Got that? China apparently understated its actual emissions by an amount greater than the entire annual emissions of Germany, the largest economy in the European Union.
Canada's 1.6 per cent share of global emissions are all but inconsequential. Ditto for Alberta's share, which equates to about 0.65 per cent. Shut the whole Canadian economy down and it would have virtually no impact on the climate.
But facts can be so inconvenient when you're waging a holy war, eh. This is Canada, where our political leaders — and the self-important talking heads at the CBC — insist that Canada has a "global leadership role" to play in curbing emissions.
My guess is Vladimir Putin, the House of Saud and the Mullahs in Tehran really don't give a fig what Alberta's new NDP government or Canada's new Liberal government think about emissions policy. Time will tell.
Regardless, in the lead-up to the upcoming Paris talkfest, and against the backdrop of this fractious, seemingly endless debate on how or even whether to rein in carbon emissions, Canada's Ecofiscal Commission has released its latest report.
Launched a year ago, the privately funded group is chaired by respected McGill economics professor Chris Ragan and backed by a high-powered advisory board that includes former Liberal prime minister Paul Martin, Suncor CEO Steve Williams, former federal opposition leader Preston Manning and ex-Quebec premier Jean Charest, among others.
The commission's latest 20-page report, focused on provincial carbon pricing mechanisms and the competitiveness pressures that may arise from them, follows an initial report on carbon pricing last April, and it lays the groundwork for a broader report to come in March.
That's roughly when Justin Trudeau's new Liberal government is expected to lay out its plans for addressing carbon emissions, with each of the 10 provinces expected to chart its own course within some kind of national framework.
So what does the Ecofiscal Commission's latest report say? First, that the national economic impact of imposing a price on carbon emissions is likely to be very small.
"For example, even if 85 per cent of Canada's current greenhouse gas emissions (roughly 700 megatonnes) were priced at $30 per tonne, the revenue raised would be less than one per cent of Canada's national income, as measured by its Gross Domestic Product (GDP)," the report reads.
With a national GDP of roughly $2 trillion, that equates to about $20 billion. Not a small sum, to be sure, but little more than pocket change on a national basis.
But here's the rub. Carbon emissions are not sprinkled evenly across the country. And it's no surprise that Alberta's energy-fired economy, which is home to dozens of huge refineries, upgraders, petrochemical and fertilizer plants, accounts for a big chunk of Canada's emissions, at close to 40 per cent.
Thus, any move to impose carbon pricing across the Alberta economy is going to have an outsized impact. By Ragan's reckoning, imposing a $30-per-tonne carbon price on 85 per cent of Alberta's emissions would generate roughly $6.6 billion.
That's a staggering figure, and the potential impact on the Alberta economy, which is already struggling under the weight of low oil and natural gas prices, isn't lost on Ragan.
"You've got to balance your policy. The policy isn't just about reducing emissions," he says. "If you think about the policy only in terms of reducing emissions, then chances are you're going to be blind to (the economic fallout). You'll put on a stringent policy that drives emissions reductions, but you'll also bear an economic cost."
Rather than trigger a "business collapse" by further undercutting the competitive position of Alberta companies, Ragan advocates using carbon pricing as a "price incentive" to curb emissions over time while recycling the funds generated within Alberta.
"You've really got to think carefully about how you design these policies and this paper is just the first half of it," he says.
"I really don't want the Ecofiscal Commission to be viewed as a group that's looking through rose-coloured glasses. I think there are groups advocating carbon pricing that might have rose-coloured glasses, but that's not us. This issue of competitiveness is very real and you've got to take it very seriously."
No kidding. Just ask any of the dozens of Alberta energy companies that have laid off some 40,000 workers over the past year or so.
I can only hope Alberta's NDP government and Justin Trudeau's new Liberal government in Ottawa truly understand that before the climate change summit in Paris begins.
glamphier@edmontonjournal.com
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