A simple way to save Keystone XL

The answer, in three words: Cap and trade

Is it too much to expect our Conservative government to behave like conservatives? After nearly seven years in power, and repeated abnegation of their principles—on foreign ownership, on military procurement, on corporate subsidies—should we abandon any hope of intellectual consistency from our governing party? Allegations that Prime Minister Stephen Harper has some hidden, extremist right-wing agenda now seem farcical. If the government has any ideology, it is only pragmatism—and then only aimed at re-election. Treehuggers should beg the Conservatives to rediscover their zealotry. Far from hurting, it would buoy many environmental causes if Conservatives started acting the part.

Consider the brinkmanship over the Keystone XL pipeline, which would carry Albertan oil to Gulf Coast refineries in the United States. President Barack Obama clearly wants to use the project to prove his seriousness in tackling climate change. U.S. Ambassador David Jacobson has repeatedly said improving Canada’s environmental record would make his country more accepting of oilsands imports. In the marble-mouthed world of diplomacy, this is a crystal-clear quid pro quo: tidy up the oilsands a bit and we’ll happily accept your little pipeline.

This might all prove to be posturing. Rejecting Keystone would be against the United States’ economic interests, and the pipeline itself has been thoroughly vetted to ensure a minimum environmental impact. But Canadian officials clearly aren’t willing to gamble. Federal, provincial and industry envoys have spent weeks swarming the U.S., trying to prove our country’s environmental bona fides.

They should stop wasting the effort, because there’s a simpler answer: a cap-and-tradesystem for carbon. Such a scheme would impose a limit on the carbon emissions that a company can release. Companies that don’t hit the cap could sell the excess to the companies that do. It’s pretty apparent that’s what the Obama administration wants. It’s even what the oil companies want, for heaven’s sake: Sustainable Prosperity, an Ottawa-based think-tank, recently surveyed 10 major energy companies, including Shell and Suncor, and found all of them were already incorporating a “shadow carbon price” into their decision-making, under the assumption they will contend with such regimes in the near future. While the prices varied wildly (between $15 and $68 per tonne), they showed industry will not be blindsided if government pursues the idea. Comments from leaders like Shell Canada president Lorraine Mitchelmore suggest they’d welcome it. And it’s easy to see why: unlike punitive regulations, cap and trade offers financial rewards for success. It applies market principles to solving a public-policy issue.

And yet, this government demonizes the notion. The Conservatives bought radio ads last year accusing NDP leader Thomas Mulcair, who backed cap and trade during his leadership bid, of a “carbon tax” plan that “would make everything you need cost more.” In doing this, the Conservatives mock the very idea they once supported. The party’s 2004 and 2008 election platforms both endorsed cap and trade, and the government continued to entertain the idea as late as 2009.

Why the government changed its collective mind is unclear. The best explanation is it’s trying to score crass political points against the NDP. There is also some suggestion they want to give Canadian exporters an advantage once the United States launches its own cap-and-trade regime. But that won’t work. Any policy would likely impose the same policies on imported oil, lest it risk punishing domestic producers.

Whatever their reasoning, the Conservatives have endangered a major Canadian industry by forgetting their principles. It’s true—cap-and-trade markets have had a rough start. But they’ve worked before: they were a key part of the U.S.–Canada agreement to combat acid rain in 1991. Who signed that deal? Brian Mulroney and George H. W. Bush. You can’t get more conservative than that.

James Cowan is deputy editor of Canadian Business where this column first appeared. More of his columns here. 




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A simple way to save Keystone XL

  1. Written like a true NDP. Remember, this is an opinion and not a fact.

    • Cowan is actually a steadfast conservative (if not Conservative), so try again.

  2. Firstly, Climategate changed everything and revealed for all to see the scam that “climate change” is. That could explain the “change in position” that you mention. Secondly, any kind of tax on carbon is a tax on breathing itself.

    I don’t care that some private companies are run by people who would kill their own companies. It’s stupid that we live in a world where “green” is everywhere and that there are actually CEOs out there who believe in that claptrap. Or perhaps they just believe in the image of “green”. Either way, it probably already is costing us in ways that we aren’t quite able to see just yet, built into prices that we are currently paying, and taking that money away from things that could actually help people, like education and healthcare.

    I hope that Harper gets it enshrined in the constitution that no one in Canada shall ever pay into or be affected by any carbon-related scams. It cannot come soon enough.

    No carbon taxes, no cap-and-trade, ever!

    • Wow a genuine flat earther who thinks if they say it enough climate change won’t happen.
      If you are so sure it’s all rubbish, move to Florida or N Carolina I hear they have some coastal property available. Seriously illustrate to the rest of us who live in a reality of facts your commitment to your faith and plunge every cent you have into low lying coastal property. If you’re right you could make a killing.

        • How about I give you a link to a whole page of NOAA data and words that show otherwise.
          http://www.ncdc.noaa.gov/cmb-faq/globalwarming.html

          Then of course there this
          http://www.climatecentral.org/news/noaa-2012-was-warmest-and-second-most-extreme-year-on-record-15436

          And this.
          http://www.ncdc.noaa.gov/sotc/

          That’s really odd for no increase over the last ten years that is. You say no change, they say the US was the warmest ever and most extreme. They say warm, warmest and warmer. So let me know when you’ll be investing in coastal real estate, put your money where you mouth is.

          • Those links don’t “show otherwise”.

            Quite the contrary, all of them confirm that there has been insignificant (if any) warming for a decade and more.

            Note for the confused, the fact of being currently warm does not equate to warming, but merely indicates we have not (yet) started to cool.

            BTW, I live in Calgary, some 900 km from the sea, but it is tsunamis from earthquakes or asteroid impacts that keep me from seeking oceanfront property.

          • What’s the point of trying. The words say the opposite but you interpret them the way you want.

  3. Obvious and inevitable…..time to ignore the ignorant and get on with it.

  4. FYI: The “hidden agenda” refers to social conservatism, not fiscal conservatism. This bunch has never been fiscally conservative in provincial governments, so observers had no concerns about them suddenly becoming fiscally responsible once they gained federal power.

  5. “If the government has any ideology, it is only pragmatism—and then only aimed at re-election.”

    In other words, their “principles” are marketing hogwash to disguise their one actual principle – gain power at any cost. This is the only motivation that’s consistently evident in their actions.

  6. The Central Planning Committee does not acknowledge any propoganda comments made as to criticize our glorious country of Canukistan. Long live Comrade Harper; long live our Great and Fearless Leader. Death and eternal damnation to our cowardly enemies.

  7. Oil sands companies already pay a carbon tax of $25 per tonne of carbon or something like that, the largest carbon tax in North America.

    The United States will never have cap’n-trade, now that it is reindustrializing because of low natural gas prices.

    So cap’n-trade in Canada will just export jobs to the non-cap’n-trade United States.

    • Wrong.

      It’s a $15/tonne charge.. for every tonne after the first 100,000 tonnes produced annually by a company. That is, assuming they don’t reduce their CO2 emissions intensity by 12% per year. If they manage to do that, they don’t have to pay a thing. If they don’t make the full 12%, that $15/tonne is pro-rated by how much they did reduce it.

      In comparison, BC charges a $30/tonne charge.. for every tonne.

      • Exactly. Twim

        Thanks for correcting this poster and others out there that think $15/t in AB anywhere near the same as what is in place in BC ($30)…

        However, it is true that this can cost BC based industry and is an “unfair” dis-advantage when it comes to trade with other locales without such a levy.

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