A flare stack lights the sky from the Imperial Oil refinery in Edmonton on December 28, 2018. THE CANADIAN PRESS/Jason Franson

Hiking carbon tax to $210 cheapest way to hit Canada’s climate targets: commission

The federal price is at $20 per tonne now, and is going up $10 a year in each of the next three years

The Ecofiscal Commission says quadrupling Canada’s carbon price by 2030 is the easiest and most cost-effective way for the country to meet its climate targets.

But the independent think-tank also warns that might be the toughest plan to sell to the public because the costs of carbon taxes are highly visible.

The commission is issuing its final report today after spending the last five years trying to prove to Canadians we can address climate change without killing the economy. The report looks at the options for Canada to toughen climate policies to meet the 2030 goal of cutting greenhouse-gas emissions by almost one-third from where they are now.

The choices include raising the carbon price, introducing new regulations and adding subsidies to encourage and reward greener, cleaner behaviour.

The report concludes that all of those can reduce emissions but that carbon pricing stands out for doing it with the lowest cost to consumers while permitting the most economic growth. It adds that the economic benefits of carbon pricing become even greater if the revenues are returned to Canadians through corporate and personal income-tax cuts, rather than direct household rebates as is done now.

Commission chair Chris Ragan said hiking the carbon price $20 per year between 2022 and 2030, until it hits $210 per tonne, would get Canada to its targets under the Paris Agreement on cutting emissions. That would be on top of the $50-a-tonne price on carbon emissions that will be in place by 2022.

The federal price, in provinces where it applies, is at $20 per tonne now, and is going up $10 a year in each of the next three years.

Rebates would also grow to keep the tax revenue-neutral, the commission said.

The federal Liberals have promised to review the carbon tax in 2022 to determine what happens to it, but have been noncommittal about what that might be.

Canada’s federal tax is only applied in provinces without equivalent provincial systems. Right now those are Saskatchewan, Manitoba, Ontario and New Brunswick. Alberta will be added in January.

Ragan said regulations and subsidies would also work to cut emissions but are more expensive. Governments lean on regulations and subsidies, however, because their costs are often less visible to voters, making them more politically palatable, at least at first. They still distort the economy, he said, just not as obviously.

“It’s crazy to use high-cost policies if you know that lower cost policies are available,” he said. ”Why would we do that?”

Carbon prices can include fuel taxes and cap-and-trade systems where emissions are restricted and credits must be purchased to emit anything beyond the cap.

Regulations can be either very specific, such as requiring agricultural producers to capture methane from manure or cities to capture methane from landfills, or broad, such as telling industrial emitters they have to find a way to cut emissions in half by a certain date. Subsidies can mean helping people or companies install more efficient lighting and appliances or to buy electric vehicles.

Canada’s current policies are a mix of all three.

Under the Paris accord, Canada committed to cutting greenhouse-gas emissions to 511 million tonnes by 2030. In 2017, the most recent year for which data is available, Canada emitted 716 million tonnes.

A year ago, Environment and Climate Change Canada said its existing platter of policies leaves the country 79 million tonnes short. Earlier this month the international Climate Transparency organization said Canada was among the three members of the G20 group of big economies that are least likely to hit their 2030 climate targets.

READ MORE: B.C. provided $830M in fossil fuel subsidies in 2017-18: report

Mia Rabson, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

"We are looking seriously at the spread and determining what our next steps should be," says Alberta’s chief medical officer of health, Dr. Deena Hinshaw, as the daily number of COVID-19 cases continues to climb.
427 new COVID cases is highest in Alberta ever

Central zone has 126 active cases of COVID-19

COVID-19. (Image courtesy CDC)
Temporary COVID-19 testing sites coming to Wetaskiwin and Ponoka

The Wetaskiwin location will open Oct. 23, 2020 and the Ponoka location will open Oct. 29.

COVID-19. (Image courtesy CDC)
City and County of Wetaskiwin reporting active cases

Both the City of Wetaskiwin and County of Wetaskiwin have active cases.

Alberta chief medical officer of health Dr. Deena Hinshaw updates media on the Covid-19 situation in Edmonton on Friday March 20, 2020. nbsp;Alberta is reporting it's highest daily number of COVID-19 cases, with 364 new infections. THE CANADIAN PRESS/Jason Franson
Alberta confirmed 323 COVID-19 cases Tuesday

Central zone active cases at 145

COVID-19. (Image courtesy CDC)
Maskwacis reporting 37 active cases

Numbers current as of Oct. 19

Manny’s Motel demolition. Shaela Dansereau/ The Pipestone Flyer.
Manny’s demolition under way this week.

Manny’s has been vacant since the January fire that took place at the property.

JJ Collett Natural Area Foundation held its AGM on Oct. 19 at the Ponoka Legion. (Emily Jaycox/Ponoka News)
De-listing Alberta parks creates ‘risk’ for coal mining: CPAWS

Canadian Parks and Wilderness Society speaks at JJ Collett AGM

(File photo)
Ponoka’s seen rise in relationship ‘disharmony,’ domestic violence during COVID-19

While there has been an increase in files, not all have required charges to be laid

ACC President and CEO Ken Kobly spoke to Ponoka Chamber of Commerce members over Zoom on Oct. 20. (Image: screenshot)
Alberta chambers are ‘411’ to members, government: ACC president

Changes to government supports, second wave and snap election

Smartphone showing various applications to social media services and Google. (Pixabay photo)
National media calling for level playing field with Google, Facebook

In Canada, Google and Facebook control 80 per cent of all online advertising revenues

RCMP. (Black Press File Photo)
Calgary man dies in two-vehicle collision near Sylvan Lake

A semi truck collided with a SUV just east of Hwy. 781 on Hwy 11.

RCMP. (Phil McLachlan - Black Press Media)
British Columbia man dies during ski trip near glacier west of Calgary

Kananaskis Public Safety and Alpine Helicopters responded around 2:30 p.m.

Prime Minister Justin Trudeau arrives on Parliament Hill in Ottawa on Monday, Oct. 19, 2020, following a week-long break for the House of Commons. THE CANADIAN PRESS/Sean Kilpatrick
One crisis after another for Trudeau since last federal election one year ago

It has been a year of unprecedented calamity and crisis

Most Read