The carbon conversation we’re ready to have

by Alex Paterson. Posted December 4, 2012


Last Friday, I attended the Economic Club of Canada’s ‘first annual’ Energy Summit – a gathering of government and industry leaders for an all-day session at Calgary’s swanky Petroleum Club.

(That’s 2 layers of club-hood, for those counting.)

The purpose of the event was to have an insightful, forward-looking discussion about the state of Canada’s energy resources, with a particular focus on implications for Canada–U.S. relations (read: pipelines). Approximately 200 industry leaders and observers gathered to hear what government officials – MPs, Ministers, MLAs, regulators and even Ambassadors – had to say about the future of Canadian energy.

Throughout the day, some universal truths coalesced:

  1. Canada and the United States are in this (whatever this is) together;
  2. North America will be energy independent by… sometime in the future;
  3. Growth in the oil sands can, should and will continue;
  4. Pipelines = good; and
  5. ‘Extreme environmentalists’ = bad.

Not entirely breaking news for those keeping even a cursory eye on our energy debate. I’m reasonably sure my mom could have rhymed each of those off over breakfast.

But what was interesting – and ultimately very sad and disappointing – was the carbon conversation that bubbled beneath the surface of each panel, flaring every so often only to be promptly extinguished by the artful dodge of government talking points.

We live, rather unfortunately, in an era of Canadian politics where there are a multitude of non-traditional ‘third rails’ – political no-fly zones that are non-starters for policy discussions. In some cases this can be for the best (e.g. no one is well served by reopening the abortion debate), but in others it is very much for the worst: nowhere is this problem more pronounced than with the carbon debate.

So thoroughly did the idea of a carbon price get eviscerated in 2006 that it has been portrayed as scorched earth ever since – a dead policy from a dead party leading to a dead end. Dead.

But it’s not, really. About half-way through the summit, two things clicked for me:

  1. Industry is ready to talk about carbon pricing – and has been for some time; and
  2. The federal government is not – and that’s a problem.

As a think tank, we simultaneously try and do two things: first, we advocate certain policy positions to decision-makers operating in the here and now, and second, we attempt to think beyond governments entirely. If I were to be a bit folksier about it: we try and skate to where the puck is going.

Harnessing market forces to reduce emissions is where we are headed. It is the inevitable solution to a long-standing, and increasingly pressing environmental catastrophe. The federal government may anecdotally rely on the perception that big business is against a pricing carbon, but this is simply not true. Many of Canada’s biggest energy producers already operate with an internal “shadow” price on carbon. Read that sentence again.

And what’s more, many are actively advocating one be put in place. The Canadian Chamber of Commerce’s Energy and Environment Committee has a standing policy ask on a market-base carbon pricing scheme. And, as linked above, the Canadian Council of Chief Executives has been calling for a ‘unified national policy’ on carbon pricing since 2009.

This does not sound like the cracked and barren wasteland of a dead debate.

Ultimately it boils down to this: last Friday, a series of government officials were placed on stage in front of a room full of oil and gas industry leaders, and each and every one of them told the crowd what they thought they wanted to hear: that this government will not move on a carbon price – or any market distortion – that hinders the growth of the oil sands.

It may very well come to pass that a carbon price is not the most efficient means by which Canada should reduce its GHG emissions. While generally acknowledged as one of the most economically efficient methods for doing so, we know other jurisdictions (see: Australia, British Columbia, pockets of the Eurozone, etc.) have experienced frustrating routes to implementation.

But these experiences should not preclude talking about a carbon price. We need to talk about it, consider the options and think about what will work best for Canada. It’s why we are convening a panel entitled ‘How to sell carbon pricing to Canadians and it’s why we believe closed doors have no place in a policy dialogue about a concern as grave as the very future of our planet.

A report from PwC UK released this week is pretty forthright in suggesting that, globally, we will not meet our emissions reduction targets and thus that we will be unable to stick to a 2 degree target for warming.  The question is where we go from here.

During the last session of the day at the Economic Club meeting, Conservative MP and Parliamentary Secretary for the Environment Michelle Rempell said she hoped the environmental debate would become less political – that the terms ‘Big Oil’ and ‘Environmentalist’ would cease to be pejorative. I support this, I really do, and I so wish that her colleague, the Honorable Joe Oliver, had stuck around to hear it.