Five myths about Canada’s carbon pricing plan

On Monday, the federal government announced plans for a price on carbon, beginning at $10 per tonne in 2018 and rising to $50 per tonne in 2022. Since the announcement, there have been all manner of claims about what it will mean for the provinces and for average Canadians. Here are some of the common myths – and the reality:

Myth 1: The announcement was shocking to the provinces.

Reality: Unless the provincial leaders have been in a cave for the past year, the announcement of a federal minimum carbon price should come as no surprise at all. Justin Trudeau and his team said throughout the election campaign that, if elected, one of their first actions would be to put a federal price on carbon. It was repeated after the election. It was a key discussion point in all federal-provincial meetings. It was stated in the Vancouver Accord on Clean Growth and Climate Change. It was signaled throughout the summer. And with a vote on ratification of the Paris Climate Agreement coming any day, it was pretty obvious the pricing announcement was imminent.

Myth 2: The decision was a unilateral move by the Trudeau government.

Reality: Not exactly. The provinces are being offered a framework that has been discussed for almost a year: there will be a minimum price set federally, but the provinces can do whatever they want, so long as their carbon pricing system at least meets the federal minimum. Yes, the minimum is unilateral, but otherwise, this is about as flexible as a federal “tax” could possibly be.

Myth 3: This is a federal government tax grab.

Reality: Flat out false. The proceeds from federal carbon tax – a tax only imposed if a province decides against creating its own pricing system – would be returned to the provinces.

Myth 4: The carbon price is not revenue-neutral / The carbon price will increase tax bills for Canadians.

Reality: Not necessarily. First, the provinces can choose their own carbon pricing system. So it can be revenue neutral, as in the case of British Columbia’s carbon tax. Second, even if a province refuses to implement its own pricing system, and is thus required to pay the federally required minimum tax, the proceeds come back to the province. The province could therefore choose to return it to the citizens.

Myth 5: The carbon price will cripple the resource industry.

Reality: Not really. Only companies that have been paying zero attention to science, Canadian politics, global trends, etc. over the past 20 years will be unprepared. A 2013 study of ten energy companies operating in Canada showed that seven of the ten had adopted a “shadow” carbon price for making decisions, and the other three had informally examined carbon pricing. The “shadow” prices ranged from $15 to $68 per tonne, right in the range proposed by the federal government. In other words, the companies have been preparing for a price on carbon for years. For resource and energy companies, having a system finally in place is much preferable to years of policy uncertainty.

To be clear, I’m not defending the structure of the system. The price is far too low, on its own, to bring Canada close to its target of a 30% reduction in greenhouse gas emissions below 2005 levels by the year 2030, let alone for Canada to play its part in avoiding the global temperature limits agreed to in Paris. But we have to start somewhere. You have to crawl before you can walk, and walk before you can run.

The pricing plan may be a crawl. At least we are finally out of the crib.

Can Canada live up to the promise of the Paris Climate Agreement?

My new article in Policy Options explores whether Canada can reconcile its climate policy targets with the temperature limits in the Paris Climate Agreement. The article is based on an analysis I conducted with Kirsten Zickfeld of Simon Fraser University – the report is available here.

The answer depends on how the world divides up the carbon that could be burned while keeping the planet within the temperature limits. From the report:

If you divide the pie based on each country’s present-day emissions, wealthy high-emitting Canada gets a generous helping for a country of its size (1.6-1.8% of the remaining carbon budget). If you divide the pie based on population, Canada gets a more equitable but much smaller slice (0.5% of the remaining budget).

With a generous helping of carbon pie, future emissions pathways for Canada that are consistent with the temperature limits would look like the figure at left. The 1.5°C limit is “at best unrealistic, at worst politically impossible.” The current Canadian target of reducing emissions by 30% below 2005 levels by 2030 could be consistent with the 2°C limit, provided emissions continue to rapidly decline after 2030.

Other countries, however, may not like Canada taking such a generous helping:

Allocating the remaining carbon budget based on present-day emissions places an unfair burden on developing and rapidly industrializing countries that historically have had low per-capita emissions. Despite being far less responsible for climate change to date, and currently having low per-capita emissions, countries like India would essentially be asked to bear an equal part of future mitigation efforts.

Equity, granted, is also an issue within Canada. I’ve been asked about emissions trajectories for individual provinces (that are consistent with the Paris temperature limits). Those trajectories would depend on assumptions about how Canada’s carbon budget “should” be allocated between different parts of the country. The answer for Canada as a whole is already dependent on assumptions about our slice of the global carbon pie; advancing this analysis to the provincial level would introduce even greater uncertainty, not to mention greater room for argument.

A simple approach would be to simply “scale” the emissions trajectories depicted above to the provincial emissions. Following that logic, the percent reduction targets, and the percent change in emissions by year, would be the same across all the provinces. That method, however, ignores the wide differences in mitigation potential and historic emissions burden. Perhaps the only thing that is clear from this analysis is that there’s no easy solution for Canada.



Canada’s contribution to meeting the Paris temperature targets

PM Trudeau in Paris (CBC)

PM Trudeau in Paris (CBC)

At this week’s First Ministers’ Meeting here in Vancouver, the federal government begins the politically difficult task of establishing a national climate policy. The first step is coordinating the existing patchwork of provincial policies and carbon pricing systems.

Underlying this conversation is a question that has remained unanswered since Canada’s much-celebrated turn at the 2015 United Nations climate summit in Paris:

Are the existing or proposed national emissions targets consistent with the global promises made in Paris?

Together with Kirsten Zickfeld of Simon Fraser University, I completed a report on future CO2 emissions trajectories for Canada that are consistent with avoiding the global temperature limits in the Paris Climate Agreement.

The analysis in our report suggests that the current Canadian target of a 30% reduction below 2005 levels by 2030 could be consistent with maintaining a likely chance (66%) of limiting warming to less than 2°C globally, but only if Canada is given a generous allocation of the world’s “remaining” future carbon budget (based on the present fraction of the world’s emissions). A target consistent with a likely (66%) chance of avoiding 1.5°C of warming globally is extremely limited regardless of the method of allocation. Even under a generous allocation to Canada, national net CO2 emissions would need to decline 90-99% below 2005 levels by 2030.

For more, see the full report available here. I’ll also write more on this subject in the coming weeks.




The Paris climate agreement awards

It was the best of times, it was the worst of times. The agreement reached at the U.N. climate summit (“COP21”) in Paris is truly groundbreaking and historic. At the same time, the promises made by the participating countries are not close to sufficient to avoid dangerous impacts from climate change.

To shed some light on what just transpired, I present awards for the best, worst, and most dubious achievements in the Paris climate agreement:

Best overall provision

Winner: Net emissions reaching zero

For the first time, the world’s governments from the U.S. to Tuvalu to Saudi Arabia to China have recognized that we should reduce emissions to zero by sometime in the latter half of the century. The wording is certainly clunky – “to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century” – but this is an award for overall achievement, not best screenplay.

Best source of confusion

Winner: Is the deal binding?
Runner-up: Why include targets that may be impossible to achieve?

Technically speaking, the agreement is legally binding. Article 15 establishes a “mechanism to facilitate implementation of and promote compliance.” However, that does not mean every feature of the agreement is legally binding. Compliance in this case effectively means meeting the reporting and target creation promises listed in the agreement. The emissions targets in each country’s Nationally Determined Contributions are not binding under international law.

Naturally, a lot of people are upset that the emissions targets themselves are not legally binding. Yet this is an example of politics being the art of the possible. Negotiators wanted to create a deal that all countries would accept and that their governments would ratify. Many countries would never have ratified a deal that included punishment for failing to meet their target. Without binding emissions targets, the U.S. in particular can avoid a certain-to-fail vote in the Senate on ratification (see the next award). Had the negotiators given in to pressure for binding emissions targets, the agreement most likely would have failed.

Hunter Cutting has a clear breakdown of the enforcement mechanisms on the Road Through Paris blog.

Best word

Winner: “Shall”
Runner-up: “Should”

In international legal-ise, “shall” implies a binding commitment, while “should” implies a non-binding intention. There are 141 shalls in the Paris Agreement and only 41 shoulds. The final decision on the agreement was held up for several hours because of a supposedly mistaken “shall” in the following statement:

Developed country Parties shall continue taking the lead by undertaking economy-wide absolute emission reduction targets (Article 4)

This “shall” was changed to “should” at the behest of the U.S. (through intermediaries) to ensure that emissions targets were not legally binding under international law.

Largest gap in the agreement

Winner: Ambition vs. actual emissions targets
Runner-up: Actual vs. pledged climate finance

It is well known at this point that the emissions targets volunteered by individual countries are not sufficient to meet the temperature targets in the Paris Agreement. The “ratcheting” provision in the agreement lays the groundwork for strengthening these targets. Each country is required to submit a new Nationally Determined Contribution every five years that is as, or more, ambitious than the last one:

Each Party’s successive Nationally Determined Contribution will represent a progression beyond the Party’s then current Nationally Determined Contribution and reflect its highest possible ambition (Article 4.3)

Given this provision, the current emissions reduction pledges from individual countries could be seen as the minimum reductions expected in the future. Although I am not entirely convinced by their analysis (notably the treatment of non-CO2 forcings and feedbacks), an analysis by Climate Interactive and MIT Sloan finds that improving the emissions pledges every five years could limit warming to less than 2°C.

Best (and most misunderstood) newcomer

Winner: 1.5°C temperature limit

The inclusion of a “safer defense line” of 1.5°C has received a lot of attention. Prominent scientists, like Kevin Anderson, have correctly argued that it is next to impossible to avoid more than 1.5°C of warming without widespread implementation of negative emissions technology – things that can suck CO2 out of the air.

The feasibility argument, though technically correct, misses some of the reasons why countries want temperature targets in this agreement.

The targets, especially 1.5°C, are a signal to countries like the Republic of the Marshall Islands that the world recognizes harm will come with more warming. Without mention of 1.5°C as a “safer defense line,” this would be an agreement dictated by the developed world, not a truly global deal that reflects the challenges of the whole planet. In Paris, the U.S., Europe, and a coalition of small island developing states and least developing countries successfully used the proposed language for a 1.5°C target to isolate and eventually win over rapidly industrializing countries like India and South Africa who were blocking progress on an agreement.

The temperature targets lay the groundwork for the adaptation, capacity building, and finance sections of the deal. They also ensure that if it actually becomes feasible to achieve stabilization of the climate at 1.5°C, for example via some affordable air capture technology developed decades from now, there is an international agreement in place that may compel those with access to the potential technology (likely developed countries) to take action.

Biggest disappointment

Winner: Climate finance

For all the concern about non-binding emissions targets, the finance provisions are arguably the weakest part of the deal. The parties agreed to keep the $100bn/year target for 2020, to consider higher targets in the future, to have developed countries continue to take the lead, and to seek a balance between mitigation and adaptation finance, a major concern of the developing nations. Other than the agreement to submit communications about climate finance every two years, none of the provisions are binding.

With climate finance, the devil is in the details. It is difficult to separate “climate” aid from other development aid, and to ensure that “climate” aid does not come at the expense of other initiatives. The Paris Agreement did not tackle any of the really difficult questions surrounding finance. More to come on this in later posts.

Most hollow victory

Winner: Loss and Damages

After much debate, the concept of “Loss and Damages” was elevated to equal status in the UNFCCC as the core challenges of mitigation, adaptation, and finance. There is now an entire Article (#8) in the convention about “averting, minimizing, and addressing loss and damages associated with the adverse effects of climate change.” However, the Paris Agreement basically shunted aside any chance of reparations – payment to developing nations for past, present, or future damages due to climate change. The decision document stipulates that:

Article 8 of the Agreement does not involve or provide a basis for any liability or compensation

Instead, Article 8 focuses on support and cooperation on things like early warning systems and emergency preparedness. These are very valuable but are not what developing countries envisioned when “loss and damages” was first proposed years ago.

Best new provision with an unfortunate name

Winner: Global stocktake

It may sound like a global anti-capitalist movement, a financial accounting trick, or a farm convention, but the global stocktake is a very critical part of the Paris Agreement. The Parties agreed to report every five years on their progress, not just towards their emissions targets, but towards their adaptation and climate finance targets.

Biggest break from the past

Winner: Collective responsibility

The agreement that all countries should eventually reduce emissions broke a 20-year deadlock between developed nations, known as “Annex 1” under the Kyoto Protocol and developing nations. There is still recognition of “common but differentiated responsibilities” and “respective capabilities” of different countries: the world does not expect the same targets from a major power like the U.S., a rapidly industrializing country like India, and a least developed country like Madagascar. Yet for the first time, all countries accepted that they should participate in the mitigation effort.

Most half-assed reference to something a lot of people care about

Winner: Climate justice

Despite lobbying by activists and many countries including India, the references to climate justice in the agreement in the adaptation and global stocktake were cut from the final text, leaving just this somewhat dismissive phrase in the preamble:

Noting (i) the importance of ensuring the integrity of all ecosystems, including oceans, and the protection of biodiversity, recognized by some cultures as Mother Earth, and noting the importance for some of the concept of “climate justice,” when taking action to address climate change

Most fascinating number

Winner: 55%
Runner-up: 1.5

The Paris Agreement will enter into force once “at least 55 Parties to the Convention accounting in total for at least an estimated 55 percent of the total global greenhouse gas emissions” ratify or approve of the deal. According to 2014 data from the Global Carbon Project, China (27%) and the U.S. (16%) together represent 43% of the world’s fossil fuel emissions. If these fractions stay constant, it may be possible, albeit unlikely, for the agreement to come into force without ratification by either of the two biggest emitting countries.

Most overlooked new provision

Winner: Capacity building (Article 11)
Runner-up: Loss and Damages (Article 8)

Meeting many of the provisions in the agreement – from increasing ambition on mitigation, to managing climate finance, to implementing and reporting on adaptation plans – is challenging for many developing countries. This is especially the case in small island countries where complying with the reporting requirements of international agreements can consume all of the time of top government bureaucrats. However, this also links to the next award.

Best way to support international development consultants

Winner: National adaptation plans
Runner-up: Capacity building

Under the Paris Agreement, countries need to create national adaptation plans and “periodically” assess adaptation actions, climate impacts, areas of vulnerability, and monitoring and evaluation of adaptation. While important, this will be a boon for consultants with experience in least developed countries and small island developing states where the capacity to do such bureaucratic work is more limited.

Best word(s) I had to check in a dictionary

Tie: “mutatis” and “mutandis”

Mutatis mutandis is a Latin legal term meaning “(once) the necessary changes have been made.”

Most ironic omission

Winner: “market”
Runner-up: Green Climate Fund

The section on creating an international carbon market (Article 6) never actually mentions “market” because of opposition from countries like Bolivia to the concept of market-based mechanisms.

Most curious omission

Winner: Green Climate Fund
Runner-up: Migration

Despite being created by the UNFCCC to distribute climate finance to the developing world, the Green Climate Fund is not mentioned in the finance section of the agreement. The role of what was supposed to be a central node in the global climate finance system is now quite fuzzy. The omission likely reflects disappointment among developing countries that the initial outlays from the Green Climate Fund were loans and small grants aimed to leverage other larger investments, rather than solely public sector grants. People are asking how the Fund is different from other existing multilateral lending agencies.

Best overall performer

Winner: The United States
Runner-up: France

Like it or not, this is the deal the Obama Administration wanted: ambitious, global, but without the binding emissions and financing targets which would have ensured defeat at home.

Best “pound for pound” fighter

Winner: The Republic of the Marshall Islands
Runner-up: Bolivia

This small atoll nation and its charismatic foreign minister Tony de Brum played a central role in the “High Ambition Coalition” that broke a stalemate over language surrounding temperature targets and responsibility for emissions reductions. Think about this: an island chain home to just 60,000 people whose very existence is threatened by climate change and a place treated terribly in the past – the U.S. is still compensating the Marshallese for damages from hydrogen bomb tests in the 1950s – played a central role in getting the world to agree on a deal to address climate change. If this were a movie, you would say it was not realistic.

Final award: Best unresolved issue

Tie: Aviation and shipping

The Convention does not cover aviation or shipping, which represent roughly 8% of the world’s greenhouse gas emissions and are among the fastest growing sectors. Emissions from aviation and shipping are governed by the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO). There is some talk of the UNFCCC taking governance back from the ITO and IMO if they do not implement agreements of similar ambition to the Paris Agreement, but there was no mention of shipping or aviation in the agreement.


Stay tuned! The U.N. Framework Convention on Climate Change will return. COP22 in Marakkech, Morocco begins on Nov 7, 2016.

Why would Canada support the 1.5 C temperature target?

On Monday at the UN Climate Summit in Paris, Canada made a decision that shocked and confused many in the policy world.

Environment Minister Catherine McKenna stated that Canada backs the idea of eventually limiting global warming to less than 1.5 °C above pre-industrial levels. This lower temperature limit is advocated by many developing countries, including low-lying small island states like Kiribati, the Marshall Islands, and Tuvalu.


From a numbers standpoint, Canada’s new position may look crazy. The lower temperature target appears, practically speaking, next to impossible to achieve.

The world is currently far off the pace to stay within the existing 2 °C limit agreed upon by most of the major world economies, including our neighbour to the south. If you add up all of the emissions reduction pledges made by the different countries meeting in Paris, the world is on pace to warm by as much as 3.5 °C or more.

To have a good chance of staying within the 1.5 °C limit, the world can only emit another 270 gigatons of carbon dioxide. At the current rate of emissions, we’ll blow that entire bank in less than a decade. Then, the only way to keep within the target will be to rely on what scientists call “negative emissions” – to suck carbon dioxide out of the air, using technologies that either do not yet exist, are unproven, or have never been implemented at large-scale.

Is this yet another case of Canada’s rhetoric on climate action being unmoored from the reality of greenhouse gas emissions?

In fact, the decision is about respect. In pushing to include reference to a 1.5 °C limit, Canada is saying that the people of small island developing states and vulnerable countries like Bangladesh matter.

Despite what you’ve probably heard, the popular 2 °C target is not dictated by science. The 2 °C target is a political decision made largely by the developed countries – the same countries that are most responsible for climate change.

The fact is that there is no scientifically definable “safe” amount of climate change. Science can provide us with a guide to the impacts of different levels of warming. The amount of warming we deem as “safe,” however, depends on our values and our perception of risk.

If you live in a small island nation in the tropics, more than 1.5 °C – not 2 °C – of global warming certainly seems dangerous.

For example, with more than 1 m of sea-level rise, around 90% of countries like Tuvalu, the Marshall Islands, and Kiribati could become so prone to flooding as to be uninhabitable. While there’s large uncertainty about the rate of future sea-level rise, evidence from the distant past suggests the risk of losing the major ice sheets increases sharply with more than 1.5 °C of warming.

IMG_0253There’s arguably even greater concern among larger island countries like Fiji about coral reefs, a key source of food, income, and coastal protection in small island countries. The world’s coral reefs are already in trouble due to warming and acidifying ocean waters. If warming can be kept to less than 1.5 °C, two-thirds of the world’s coral reefs could be spared from serious degradation this century. With 2 °C or more of warming, reefs covered with living corals may become a thing of the past.

If you live in a small island nation in the tropics with historically low greenhouse gas emissions, there is a colonial air to the 2 °C limit. The rich countries are controlling your fate – through climate policy – and not even listening to your input.

Canada may look hypocritical in backing a 1.5 °C limit but not promising greater reductions in greenhouse gas emissions. However, the move has the potential to be more than mere tokenism and false hope.

Including the lower limit in the climate deal is a way of officially recognizing the harm likely to come to these more vulnerable countries. It will help ensure that these countries receive the needed international assistance, including terms of financing, investment in adaptation, and migration programs, which they have been promised through the UN system but has been slow to materialize.