OTTAWA – Environment Minister Peter Kent is attempting to put some heft behind the Conservatives’ climate-change talking points that have driven Parliament Hill to distraction over the past week.
In an interview with The Canadian Press, Kent said the NDP’s cap-and-trade proposal to reduce greenhouse gas emissions amounts to a carbon tax by definition, simply because it would see the government generating revenue.
The opposition party’s election platform from 2011 shows the scheme would see Ottawa collecting $21-billion over four years.
“Their $21 billion is an up-front tax. It’s a revenue generator. Ours is not,” Kent said, explaining how he justifies equating a cap-and-trade system with a carbon tax and dismissing both approaches as inferior.
Most experts and governments consider cap-and-trade and carbon taxes to be two separate and different approaches to reducing emissions.
A cap-and-trade system targets industry, forcing companies to buy and trade permits that allow for a limited amount of emissions. A carbon tax hits the consumer more directly, adding a levy on to anything that caused emissions.
There are similarities too. Both systems aim to put a price on carbon so that society can’t pollute for free. Both systems would likely see consumers eventually shoulder somewhat higher prices for goods and services that involve high emissions. And both systems usually involve governments promising to put the extra revenue to good use.
Kent says the cap-and-trade idea proposed by the NDP is based on a good theory that indeed was once the preferred approach of Conservatives.
But he says the party changed its mind because the theory breaks down in practice, and the Conservatives wanted a system that would guarantee emissions reductions.
“It’s a great concept and it’s a minor cost of doing business for large companies, but it’s not proven and it’s got all sorts of negatives,” he said.
When the United States backed away from a cap-and-trade system, he said it became clear Canada could not adopt it in isolation and make it work.
“Compliance with regulations is a much more tangible concept than a theoretical trading system,” he added.
Still, experts point to jurisdictions where cap-and-trade schemes appear to be working out the kinks — most notably in Europe. Several Canadian provinces are heading in that direction.
Carbon taxes have been implemented successfully in several Scandinavian countries, as well as British Columbia and, most recently, Australia.
But Canada’s system of restricting emissions on a sector-by-sector basis — through negotiations with industry players and provincial officials — has not won many accolades outside the Conservative party.
The federal environmental auditor, Scott Vaughan, as well as the now-defunct National Round Table on the Environment and the Economy have both said Ottawa is moving far too slowly to meet its international commitments to reduce emissions.
“Regulation is failing when it comes to reducing emissions, especially with this government,” said the NDP environment critic, Megan Leslie.
A recent federal report added up the results of federal and provincial measures so far, and found that Canada was half way toward meeting its 2020 emissions target. But most of the credit was given to provincial measures. Federal regulations will be most effective well after the 2020 date.
Still, Kent argues that the approach is delivering concrete results.
Kent acknowledges that the government’s system of imposing regulations on polluting sectors of the economy comes with costs too, Kent says none of the money will be collected by the government.
“We have absolutely no revenue generation by our regulation of coal-fire,” he said.
The coal rules are not free, however. Federal calculations estimate that the new rules in just that one sector will cost about $16 billion in today’s terms. About half of that is due to increased consumption of natural gas that will be the side-effect of cracking down on coal.
But Kent says there is a big difference between those costs and the NDP’s costing of its carbon reduction plan. With the Conservative regulations, the costs are spread out over decades, and none of money goes directly to the government, he explained.
The Conservatives have been relentless in their attacks on the NDP climate policy over the past couple of weeks, despite the fact that they campaigned on a similar idea in 2008.
In return, the NDP has accused the Conservatives of lying, in an attempt to distract attention away from their environmental record.
Kent’s comments are “the first time I have heard the government actually try and defend their policy decisions,” Leslie said.
Still, she said his defence does not add up. If anything that brings in government revenue can be called a tax, then the Conservatives are guilty of many a tax hike, she said.
“This is the government playing sleazy politics.”
The bitter back-and-forth has prompted Green Party Leader Elizabeth May to call for a less heated discussion on how to actually reduce greenhouse gases.
“We have to actually stop the growth of emissions and have a very rigorous plan for phasing out and reducing reliance on fossil fuels over time,” May said in an interview. “We’re not really in a position to say we can just regulate a pinch here or a pinch there.”