After years of Canadians being lectured to by Prime Minister Justin Trudeau and his various and sundry environment ministers that the only way to effectively reduce greenhouse gas emissions is through a national carbon tax, the United States has just passed a US$370 billion climate bill that says it doesn’t need one.
In fact, President Joe Biden and the Democrats claim they can hit Canada’s target of reducing emissions to 40% below 2005 levels by 2030 in the U.S., without a Trudeau-style tax on industrial carbon dioxide emissions — currently $50 per tone in Canada, rising to $170 per tonne in 2030 — that raises the cost of almost everything.
(Biden’s promise is to lower emissions to 50% below 2005 levels by 2030, while Trudeau’s is to achieve cuts of 40% to 45%.)
It’s another example of the inconsistent and contradictory rhetoric politicians routinely employ in talking about the costs of addressing climate change, often directly contradicting each other about what they claim will and will not work.
While the Trudeau government is praising the Biden administration for including North American-made electric vehicles in tax credit incentives for the purchase of new and used EVs, previously restricted to American-made cars, the U.S. climate law takes a “no-stick, all-carrot” approach to reducing emissions that Trudeau and his environment ministers have said for years is insufficient to address climate change.
Instead, the U.S. law earmarks hundreds of billions of dollars for U.S. consumers to buy electric vehicles and other so-called green energy products and services, and for America’s manufacturing and industrial sectors to develop and adopt new sources of green energy.
It also gives America’s oil and gas sector greater access to offshore drilling for oil and natural gas in the Gulf of Mexico and Alaska, expanded tax credits for coal and natural-gas fired electricity plants that use carbon capture technology, incentives to build wind and solar projects in areas where coal mines or coal plants have recently closed, and $60 billion to low-income and minority communities disproportionately impacted by climate change.
While it includes penalties for industries exceeding U.S. methane emission limits starting in 2024, it doesn’t include a national carbon tax with rebates imposed by the Trudeau government in Ontario, Alberta, Saskatchewan and Manitoba.
While federal Environment Minister Steven Guilbeault argues the rebates leave 80% of households paying it better off financially, Canada’s independent, non-partisan parliamentary budget officer, Yves Giroux, says that when the impact of Trudeau’s carbon tax on the economy is considered, 60% of households end up worse off financially, rising to 80% in Ontario in 2024 and in Alberta in 2028.
Giroux also said the argument there will be cost savings for Canadians from mitigating climate change or improving energy technologies by 2030 — the period for which Trudeau’s carbon tax applies so far — is “wildly optimistic.”
Ironically, never having had a national carbon tax or put a floor price on emissions, the U.S. has been more successful at lowering emissions than Canada.
Canada and the U.S. had identical targets of reducing emissions to 17% below 2005 levels by 2020, on a projected path to net-zero emissions by 2050.
The U.S. exceeded its 2020 target through market forces — for example, by replacing coal-fired electricity with natural gas, which has half the carbon intensity of coal.
Canada didn’t come close to achieving its 2020 target.
Source: Toronto Sun
