Politics Buffet BC's Carbon Agenda

[Editor's note: This Tyee Solutions Society series sets out to consider just what B.C.'s four-year-old Climate Action Plan has and hasn't accomplished so far, including what informed observers say deserves rethinking. Part one of this series re-capped how we got here. In this second instalment, Tom Barrett takes the measure of Carbon Plan support -- or not -- in today's political context. Future instalments will look in on how our unique-in-North-America carbon tax is working out; pull back the curtain on the mysterious world of carbon "offsets"; and more.]

Back in 2007, a radio hotliner named Christy Clark proudly announced that she had jumped on the "global warming bandwagon." The environment, she declared, was "the single most important issue facing this country."

Today, hotliner Clark is Premier Clark. Where she sits on the global warming bandwagon isn't so clear. What is clear is that unless her government takes action on the climate front soon, B.C. will likely miss the legally binding emission reduction targets set by her predecessor.

Under a law passed under former premier Gordon Campbell, B.C. is committed to reducing its greenhouse gas emissions to one-third below 2007 levels by 2020. Under Campbell, an ambitious Climate Action Plan was put into place. So far, to the relief of environmentalists and the frustration of business, Clark has not repudiated that plan.

But the plan went only so far. Three years ago, the government's panel of experts, known as the Climate Action Team, concluded that the action plan would take the province only about three-quarters of the way to its target. To close the gap, the team proposed a number of measures. A key recommendation urged the government to increase the carbon tax after 2012. A second stressed the importance of putting a price on emissions not covered by the carbon tax.

So far, Clark has shown no intention of raising the carbon tax beyond its last scheduled increase in 2012. Progress on putting a price on untaxed emissions has been slow. Meanwhile, Clark has rolled out a jobs strategy, featuring a beefed-up oil and gas sector, which appears certain to increase emissions.

Even Environment Minister Terry Lake admits that meeting the legislated reduction targets will be "challenging." Currently, the government's response to the Climate Action Team's recommendations is being discussed, Lake said in an interview. A plan could "start to come together" in 2012, he said.

Brave goals, at the time

In his climate plan, Campbell set out some grand goals. In the 2008 Throne Speech, Campbell gave Lieutenant-Governor Steven Point these Churchillian words to read:

"We cannot be paralyzed into inaction by the scale of the task at hand. Rather, we will act now to make a real difference, and to encourage behavioural changes that will drive sustainable growth as a global imperative."

British Columbians were promised a revenue-neutral carbon tax, membership in a regional cap-and-trade system that would lower industrial emissions, "carbon smart communities" and California-style vehicle emission and low-carbon fuel standards. BC Hydro was directed to favour new, clean energy sources.

Despite political controversy, the Campbell government moved ahead with many of its policies. But when Campbell resigned in Nov. 2010, the plan's future was unclear. Would the new premier commit to what was essentially a Campbell pet project?

During her days as a media commentator, Clark certainly sounded onside.

In a 2007 column in The Province headlined, "We Don't Have Much Time Left to Keep Debating Climate Change," Clark wrote that climate change is real, man-made and could have disastrous consequences.

"We could face devastating forest fires, suffocating heat-waves and mass starvation," she wrote.

Clark: 'I was outraged'

A few months later, Clark revealed that, "my jump onto the global warming bandwagon came in a roundabout way." Reflecting on the experience of interviewing environmentalist Mae Burrows, who talked about toxins in the environment, Clark wrote, "I was outraged that those chemicals are allowed in our household products in Canada -- even though they've been banned in Europe."

"Mae got me thinking hard about the environment and what state it'll be in when my son grows up," the future premier continued. "Because it's not just toxins that are a threat to his future, it's thousands of other things as well. Pine beetles have chewed through billions of dollars worth of trees, while we wait for a cold snap that never comes. There's less water in our reservoirs because snowpacks on the mountains above are shrinking. Our streams are warmer. If they warm just one or two degrees more, most of our returning salmon will die.

"I spend enough time thinking about it that I've concluded it's the single most important issue facing this country."

In April 2007, a few months after Campbell launched his war on carbon emissions, Clark wrote that politicians who want to cut greenhouse gases shouldn't promise to make driving less expensive. "Saving the environment won't come cheap," she wrote in The Province.

During the Liberal leadership campaign, Clark spoke in general terms about the benefits of a green economy. She appeared to be cautiously supportive of the carbon tax, but said it contained "wrinkles" that would require review.

Mixed signals

Once in power, however, the first signals Clark sent were anything but green. Her transition team was heavy on the oil and gas industry, with unconventional gas giant EnCana's founding CEO, Gwyn Morgan, and pipeline company Enbridge vice-president Roger Harris at the table. There were rumours that the entire climate action agenda was up for review. Environmentalists worried that the Campbell initiatives might be scrapped.

Then, in May, while running in the Point Grey byelection, Clark released an "open letter to British Columbians." It re-affirmed her commitment to increase the carbon tax, as scheduled, through 2012. She suggested that she might also find some new uses for the carbon tax.

"In the future," Clark wrote, "I am open to considering using the carbon tax to support regional initiatives, such as public transit. If we go this route, we must ensure that the allocation of carbon tax revenue respects regions and communities so that one region is not subsidizing investments in another."

The open letter also said B.C. "will continue to play a leadership role through the Western Climate Initiative to design a cap and trade system that works for our environment and our economy. B.C. will work with California and other participating jurisdictions, while consulting extensively with stakeholders in B.C."

On his blog, University of B.C. resource policy expert George Hoberg called the announcement "great news."

Much of B.C.'s business community didn't take it that way, however.

Jock Finlayson, executive vice-president of the Business Council of B.C., said in an email that he hasn't seen any signs that Clark intends to quit the Campbell climate strategy -- although many of his members wish she would.

"The new premier has given no indication that she plans to back away from the aggressive climate policy positions defined by her predecessor," Finlayson said.

"The Business Council continues to recommend that the government ‘pause and reset’ on climate policy," Finlayson wrote. "Many (not all) of our members believe B.C. moved too quickly on climate policy, without doing the homework necessary to arrive at well-informed policy decisions.

"That said, so far I have not seen any hard evidence that the Clark government is heeding our advice."

There is one point on which Finlayson and environmentalists agree, and that's Clark's jobs strategy, announced in September and loaded with promises of eight new mines and a liquefied natural gas terminal at Kitimat. "It's hard to see how these goals can be met while still adhering to all of the elements of the climate policy framework established under former Premier Campbell," Finlayson said.

The Pembina Institute's Matt Horne says the goals can be reconciled, but the solutions aren't "just going to naturally fall out of the air. We've got to be on top of them."

Said Horne: "I think if we're really going to live up to the objectives of the Climate Action Plan, there's no question that additional concrete steps are needed. And those haven't been taken to date."

Horne said the government has to put a price on the industrial emissions mentioned by the Climate Action Team. While the carbon tax covers almost all emissions from burning fossil fuels, it doesn't cover non-combustion emissions. These gases represent about one-quarter of the province's total emissions and their sources include landfills, gas pipelines, cement plants and aluminum smelters.

At the time the Climate Action Plan was drafted, there was a lack of data on these emissions, making it difficult to place them under the carbon tax. Instead, the government originally favoured including such emissions in the WCI cap-and-trade scheme. That scheme is progressing, but slowly. Meanwhile, Horne said, enough data has been accumulated to apply the carbon tax to at least some of the uncovered gases.

"In 2008 they were defensible gaps. In 2011 and 2012 they're quickly becoming loopholes."

Economist Marc Lee, with the Climate Justice Project of the Canadian Centre for Policy Alternatives, shares Horne's concerns.

"As far as I can tell," Lee said, "the B.C. government hasn't done anything [on climate] since its flurry in 2007, 2008." Since then, "All we've seen are increasing efforts to spur more oil and gas development, which are going to worsen the problem and likely mean that we will not be able to meet those targets."

Clark's jobs plan "moves us totally in the wrong direction by putting so much emphasis on mining and oil and gas development," Lee said. The proposed LNG terminal in Kitimat would be "an utter disaster environmentally," he said.

The anti-carbon-tax B.C. Conservative party may be one factor scaring Clark's Liberals away from climate action, Lee suggested.

"It may be that with the Conservative party gaining strength the Liberals are more worried about their right flank than their left flank. It would be nice if behind the scenes the NDP and Liberals sort of said, 'Okay, we agree we're not going to beat each other up on this carbon tax thing, we're going to do the right thing.'

"Instead we have the opposite case. Neither of the two big parties is supporting any new meaningful climate action."

Still afloat, but adrift

Political scientist Dennis Pilon was at the University of Victoria when the Campbell government rolled out its climate plan. Newly relocated to York University in Toronto, Pilon questions the seriousness of Campbell's commitment to fighting climate change.

"The premier was a man of quickly changing tastes," he said. "The carbon tax came up -- Oh gosh, this is exciting -- then it got pushed aside for some other issue de jour that he thought was terribly important and was talking with somebody over dinner about."

The action plan, he said, looks like a bid to steal away middle class supporters of the NDP. "I was never really entirely convinced that the premier was putting any muscle behind the policy."

Given Clark's background in the federal Liberal party -- albeit on the right wing of the federal Liberals -- Pilon expects she will maintain her commitment to the Campbell climate plans. "I think the fact that the party won quite decisively last time despite the carbon tax suggests that it won't kill the party," he said.

No 'Axe the Tax' in 2012

New Democratic Party environment critic Rob Fleming is another who says B.C. won't meet its GHG-reduction targets unless its climate policy changes gears.

"You can't give industry a free pass and give out environmental permits to major new emitters in the province," Fleming said. "It just doesn't add up."

The NDP's "Axe the Tax" election slogan proved unpersuasive in the last election. The party now supports a carbon tax, but not its revenue neutrality.

As created under Campbell, the levy was billed as a tax shift, rather than a tax increase -- all the revenues collected by the tax were, by law, going to be given back in personal and corporate tax cuts.

In fact the government has been giving out far more cash than it's been collecting from the carbon tax -- millions more. The most recent B.C. budget says the government collected $740 million in carbon tax revenue in the last fiscal year. But it gave up $395 million in personal income tax cuts and $467 million in business tax cuts.

That means the government lost $122 million on the carbon tax last year. This year, the shortfall is forecast to hit $191 million.

An NDP government would instead use some of the carbon tax money to fund green infrastructure like transit.

"The carbon tax in B.C. has not been well structured to contribute towards the kinds of investments that will allow British Columbians in their daily lives to reduce their carbon footprints," Fleming said. "They accelerated corporate tax cuts to such an extent under the guise of making the carbon tax revenue neutral that in actual fact it's contributing approximately $200 million to the province's deficit right now.

"So not only has it failed to fund smart green infrastructure investments, it actually hurts the province’s ability to fund public services that we enjoy currently."

An NDP government would pay for this infrastructure by either cutting the business tax breaks or "growing the carbon tax revenues," Fleming said.

As for the sectors of the economy not covered by the carbon tax, they "need to be brought into the scheme, either through the carbon tax or through some sort of regulation that will help them contribute to the province-wide legal target of a 33 per cent reduction by 2020," Fleming said.

The NDP would also overhaul the carbon neutral government initiative. Schools and hospitals would no longer be required to buy offsets from the Pacific Carbon Trust, which uses the money to pay for carbon reductions in the private sector.

'A fine balance': BC enviro minister

B.C. Environment Minister Terry Lake told Tyee Solutions that growing the economy while shrinking emissions is "not an easy task." He added that it would be irresponsible for the government to ignore the fragile world economy.

"There's a balance we have to strike between the greenhouse gas side of things and the economy and competitiveness and creating jobs on the other side," he said. "You know, that's a fine balance sometimes and so that's why we're doing a lot of work, looking at all of those different factors that come into those types of decisions."

As for meeting the legislated GHG targets, Lake said: "It certainly is challenging to meet the 2020 targets when you look at the advent of shale gas and liquefied natural gas. I wouldn't be frank if I said it wasn't a challenge. But I think it's a challenge that I’m quite excited about trying to meet."

The government is meeting with industry and environmentalists to discuss the next steps, Lake said. "We have to have discussions about the carbon tax and further increases past 2012," he said. "That's still up for debate." The best way to cover emissions not currently covered by the carbon tax is also up for debate, he said.

Lake said the government is watching the progress of the WCI cap and trade system. Next year will be a sort of test run for the scheme, with California rolling out a program that will not require immediate emissions reductions.

Lake said it's too late for B.C. to impose cap and trade for 2012. "We want to keep our options open for looking at cap and trade beyond that," he said.

Asked when decisions might be expected on the carbon tax and cap and trade, Lake replied, "I don't want to put any time lines around it," adding that he doesn't want to go ahead without adequate information.

"I would hope that in 2012 these things would start to come together and we'll be able to move forward with a sort of comprehensive plan about how we're going to meet those different challenges."

Lake said he believes it is possible to reconcile the government's economic development and climate change agendas. In the face of a cooled-off economy and a warming planet, business and environmentalists alike will be watching to see what the Clark government chooses to do.

Tomorrow: Chris Pollon reports on B.C.'s carbon tax: The risks and rewards of pricing carbon.