Canadian Climate Policy

Alberta needs to do more than tell Ottawa, “hands off the golden goose!”

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This article, by Jason Fekete and Darcy Henton, discusses the Alberta Government’s growing anxiety with respect to the coming Federal GHG regulations for the oil and gas sector. Premier Stelmach and the Alberta Government may be late to the game, but they have moved quickly in the past to head off federal action with regulatory changes in the province.

As I wrote during the election, the Conservatives have committed to a regulatory model, which could be similar to the EPA approach in the US, although details for Canadian regulations have yet to be released.  If you want to know what source performance standards will look like in the oil and gas sector in the US, look here.

What should concern Alberta is the fact that regulatory approaches generally look at each facility and ask what that facility can afford to pay. Alberta has some of the highest value uses of carbon emissions in the country – you don’t have to look far to see a story about how profitable the big oil companies are today. Under a regulatory approach, oil and gas facilities can afford to pay a great deal more than, for example, steel mills in Eastern Canada. I wrote then, and I still believe it to be the case now, that we should not be too quick to assume that the oil sands will be the first to get special treatment.

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My latest Economy Lab Post: Emissions: Peter Kent’s 178 millon-ton challenge

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It may be his most important task, and setting Canada’s GHG policy course for the next four years will not be an easy one for Environment Minister Peter Kent. By his own admission, meeting Canada’s GHG goals will be a daunting challenge and will require stringent regulations on oil and gas, electricity generation, transportation, and … Read more

On the NDP and budgets

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As information continues to trickle out about the NDP cap-and-trade program, I thought I should go back to the NDP budgets quickly. An issue arose today with respect to the eventual gas price impacts of their cap-and-trade policy, and whether an NDP policy which does not price transportation emissions could reach their budget targets. It could. In fact, the math lines up very nicely. The practical likelihood of getting such a system on line in 2012 remains minuscule, but let’s put that aside for now.

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On the gas price impact of NDP cap-and-trade

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Here’s what you need to know about the NDP program and gas prices. The NDP cap-and-trade program would require “big emitters” including oil refineries and major producing sites including oil sands facilities to buy emission permits at auction, with a price floor at $45/ton.  This will increase the costs of producing oil and refining gasoline. … Read more

Tory platform’s dirty secret – my latest Economy Lab post

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There’s a hole in the Conservative platform…a hole so big, you could fit Canada’s oil and gas sector or every single one of our fossil-fuel power plants into it. The hole is projected to get bigger, and will be large enough to fit every single car, truck, SUV, train, bus, and ATV in Canada into … Read more

Are the NDP’s cap-and-trade numbers believable?

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Earlier today, I had a quick Twitter exchange with Macleans’ Andrew Coyne (@acoyne) with respect to the NDP revenue projections from their cap-and-trade proposal.  Coyne’s points, with which I don’t entirely disagree, were that the NDP platform costing document contains implausible claims that  a) an auction would yield $3.6 billion revenue in the current (2011/2012) fiscal year, and b) that an auction of 100% of the permits would yield only $7.4-billion in year 4.  I thought I would look at both in a few more than 140 characters.

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My latest Economy Lab post

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The corporate tax implications of each of the parties’ greenhouse gas (GHG) policy proposals will run in the billions of dollars per year. GHG policies will induce significant expenditures, whether they follow the regulatory approach proposed by the Conservatives, the cap-and-trade approaches proposed by the Liberals and the NDP, or the broad carbon pricing approach … Read more

A question for the Green Party

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A few of my readers have pointed out that my previous post asking debate questions omitted the Green Party.  I firmly believe that the Green Party should have been invited to the debate. While the point is now moot, I feel that if their qualification for federal party funding that is triggered by 2% of … Read more

More sophistication, please

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Since Sunday’s release of the Liberal party platform and the non-announcement of a cap-and-trade program, the reaction in Alberta has been sadly predictable.  Many people in the province seem to know exactly what will be in this policy, and they know that it will be bad news for Alberta. In fact, the Wild Rose Caucus has declared the policy to be the NEP 2.0, and they are quick to cite a TD-Suzuki-Pembina Institute report which shows that the costs of the particular cap-and-trade implementation they consider would be disproportionately felt in Alberta. The Sun seems to know that the policy will contain adjustments at the border for high-carbon products.

I would love to write a long post in this space and say that they are wrong.   I would love to say that this policy will be good for Alberta. I would love to be able to talk about how it recognizes the critical role of Alberta’s energy and resource industries in Canada, and will not seek to disadvantage Alberta (and by extension Canada) to score short term political points. I would love to tell you that it will not place a disproportionately high price on carbon in Canada relative to climate leaders such as the EU.  I’d love to say all of that, but I can’t because I simply don’t know what the policy will do because I don’t know what the policy is.

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