The Conservatives clearly believe that a good offense is the best defense. But the flurry of talking points should not obscure another unfortunate reality about curbing pollution: the Conservatives’ preferred approach could cost Canada’s economy more than either cap-and-trade or carbon taxes. Rather than pricing carbon — the approach favoured by the Canadian Council of Chief Executives and a who’s who of Canadian industry players — the Harper government now says it will cut greenhouse gas pollution through sector-by-sector regulations on Canada’s industries.
If you polled economists, you’d find virtual unanimity that regulations are less efficient, and thus cost more, than a carbon price. That’s because they’re less flexible, making changes by decree rather than tapping into companies’ ingenuity by giving them a goal to meet in whatever way works best for them. But regulations only cost more than a price on carbon if you’re using them to reach the same environmental goal … So far, Ottawa has put precious few new regulations on the books. The federal government’s most recent announcement — a set of regulations to cut pollution from coal-fired power plants — have been weakened to the point that they will now allow the oldest and dirtiest coal plants in Canada to run for up to half a century from the date they were commissioned without any limit on their greenhouse gas pollution.