Prentice’s American Dreaming

Recently, Reuters published leaked information on the contents of the climate and energy bill expected to be introduced in the U.S. Senate within the next couple of weeks. The U.S. House already passed its version, and the two bills will get reconciled before going to the President.

Given that our federal government has adopted a “Made in the U.S.A.” approach to its own climate and energy policy, it’s important to understand the implications for Canada of copying the Americans, whether it’s the Senate bill or otherwise.

Based on the Reuters story and other reports, it seems probable that the Senate bill will include a cap on global warming pollution from the electricity sector, with other sectors being phased in later, some type of fee on transportation fuel, a renewable energy standard and energy efficiency measures.

While this is far less ambitious than the comprehensive climate bill passed by the U.S. House last year, American legislators are actively grappling with global warming and clean energy and have committed billions of dollars to help transition to a clean energy economy and harness the jobs that come with it.

In contrast, Canada’s federal government is cutting clean energy funding and has no proposal on the table to reach its national target to reduce global warming pollution. The U.S. is investing 18 times more per person in renewable energy than we are. For all the rhetoric coming out of Ottawa, we are in fact not matching U.S. federal efforts.

If we take the Reuters story as one possible model for the Harper government to copy, what would this mean for Canada? Several things:

1. A hard cap on the electricity sector: Within Canada, Ontario is doing the heavy lifting on electricity sector emissions by shutting its coal plants, meaning a federal cap on the sector wouldn’t require much beyond what Ontario is already doing. Canada copying America on this could be largely meaningless, and also let other provinces off the hook.

2. Postponing action on other sectors: If we copy this, it means a free pass for the tar sands, Canada’s fastest growing source of emissions, a corollary for which doesn’t exist in the U.S. in relative terms. It will be hard, if not impossible, to meet our target – or match the U.S. on a percentage basis – without reigning in those sectors that are actually growing.

3. Other federal policies: To match Washington, DC, our federal government would need to step up to the plate to work with provinces to regulate the faster adoption of renewable energy and higher energy efficiency standards.

4. Bad federal policies: The Senate bill may also contain incentives for nuclear and new oil drilling, and allow the use of offsets. Canada wouldn’t need to change much to mimic this part – we’re already subsidizing nuclear and tar sands, and are happy to dodge real reductions at home by allowing carbon offsets (and in Canada, unlike the U.S., our government clings tightly to that other loophole – payments into a tech fund in place of reductions).

5. Provincial jurisdiction: The Senate bill may prevent states from implementing their own cap and trade programs. This comes with risks given what is on the table these days in the U.S. is far from an economy-wide system. In Canada, the federal government has been keen to sit back and let the provinces lead. Matching the US on this aspect would be a big change and mean that the federal government would have to be willing to step in and regulate Alberta so that it is making actual reductions like the other provinces.

Copying exactly the likely approach of the Senate could both be unfair to some provinces and result in failing to meet even the weak target that Ottawa has set for itself. Hitching our climate and energy to policy blindly to the U.S. is risky. Our government needs to start charting a Canadian approach to tackling global warming.

Rick Smith
Executive Director