Comments on the Cap and…

Comments on the Cap and Trade Cancellation Act, 2018 and the cancellation of the associated Climate Action Plan.

Context

I first learned of the issue of global warming (now vaguely referred to as “climate change”) almost exactly 40 years ago, at which point it was already clear that this issue was serious and would be with us for a long time. Since then, the science has gotten much stronger, we’ve realized that the impacts of unrestrained emissions of fossil fuels will be worse than had been thought 40 years ago, and things that were mere predictions then are already happening – some sooner than expected. In 2015, essentially every country in the world agreed that global mean warming should not exceed 2.0°C, and preferably should not exceed 1.5°C. As a first step toward meeting these goals, every country – Canada included – pledged to undertake a certain emission reduction by 2030, but the sum of all the pledges falls far short of what is needed to have a high chance of staying below even the 2.0°C target. Just this week, the IPCC issued a report showing that, with global mean warming limited to 1.5°C, some of the most serious projected impacts of global warming can be avoided, and furthermore, that it is still possible to achieve this target. However, it requires bold action by governments around the world.

Canada’s Pledge

Canada pledged to reduce its greenhouse gas emissions by 30% from the 2005 level by 2030. Current actions underway by all levels of government currently fall far short of what is needed to honour this pledge. However, my own work shows that there are plausible combinations of actions by which Canada could still honour its pledge, but it requires strong action by every province in coordination with action by the federal government, municipalities, industry and individuals.

Options for Ontario

There is excuse for any further delay in taking strong, and potentially unpopular action, to address the clear threat of catastrophic warming of the climate. Repeated analyses by economists, energy analysts, and policy analysts have shown that a well-crafted set of policies can deliver significant economic and social benefits (jobs in particular) while phasing out the use of fossil fuels over a period of a few decades. Any replacement of the cancelled Ontario Climate Action Plan will need to re-introduce many of the same measures, but even more strongly. Essential elements of a balanced approach (i.e., one that makes use of all the available options) will include:

1. A price on carbon. I would be more than happy to see the cap and trade system replaced with a simple, no-exceptions carbon tax, with the revenues used for some combination of providing rebates to the low income households and individuals and providing financial support (where justified by sound economic cost-benefit analysis) for the measures needed to reduce greenhouse gas emissions. This price needs to gradually but continuously increase, but it does NOT imply increased energy costs if the efficiency of energy use increases at a faster rate and if consumers adopt simple measures to reduce waste.

2. Significant strengthening of efficiency standards for appliance, equipment and in building codes.

3. Working with the Federal government to significantly increase fuel economy standards for cars and trucks, and to close existing loopholes (many of which relate to electric vehicles). A feasible standard would be an efficiency, when running of gasoline, of three times the current fleet average (that is, about 3 litres/100 km) achieved in 20 years – something that requires a long lead time and a clear signal to industry.

4. Significant funding of deep (80-90% energy savings) retrofits of the most energy-guzzling buildings (a well-justified use of some of the proceeds from a rising C tax)

5. Significant investment in public transit (around $2billion/yr indefinitely)

6. Working with the Federal government and other provinces to develop a national high-voltage DC grid in order to link together our substantial renewable energy resources (primarily wind, solar and hydro).

7. Coordination of universities, colleges, trade schools, manufacturers and retailers to build up the capacity to manufacture, in Ontario, the advanced equipment needed to achieve deep energy savings in the buildings sector, to have an architecture-engineering profession that knows how to create low-energy designs, and a work force that knows how to install and operate such equipment.

8. Collaborative programs with energy-intensive industries in Ontario (steel, chemical, pulp and paper especially) to move toward state-of-the-art levels of energy efficiency.