Trudeau takes carbon pricing debate to the global stage at COP26

Trudeau takes carbon pricing debate to the global stage at COP26

Prime Minister Justin Trudeau pushed the world to have 60 per cent of the world’s greenhouse gas emissions covered by a price on pollution in 2030, during a speech at the COP26 climate talks in Glasgow on Tuesday.

Trudeau started his second and final day at the annual climate negotiations by co-hosting a carbon pricing event, showcasing Canada’s carbon price as one of the most ambitious and, in his words, stringent in the world.

“What a strong carbon price does, when it’s properly designed, is actually drive those price signals to the private sector, transform the economy and support citizens in encouraging them to make better choices,” he said.

He started the first day with a speech calling on the rest of the world to follow Canada’s lead and negotiate a global minimum carbon price.

Trudeau compared the idea to the 15 per cent minimum corporate tax more than 130 countries have now signed on to implement in a bid to stop big multinational corporations from avoiding taxes by funnelling their profits through low-tax countries.

“It ensures those who are leading on pricing pollution are not unfairly penalized,” he said.

Carbon pricing has been a political minefield in Canada, with opposing conservative provincial premiers taking the fight against one all the way to the Supreme Court, which upheld the program.

The Conservative Party nationally, long an opponent of the policy as a “tax on everything,” is now itself engaged in an internal debate about the merits.

Leader Erin O’Toole promised to implement a version of a carbon price in the recent election with a rewards-card-like system.

Environment Minister Steven Guilbeault said Monday that he thinks this COP meeting could be the one that sparks the start of a real negotiation toward a global price on carbon.

He said there is a level of interest in the idea that he has never seen before.

“So is it a done deal?” he asked. “Absolutely not. Could Glasgow be the moment that we actually start working on developing something like that? I think it has the potential to do that.”

Canada’s carbon price started in 2019 at $20 a tonne and is set to rise to $170 a tonne by 2030. The current price of $40 a tonne adds about 8.8 cents a litre to gasoline, or about $3.50 more every time you fill you car with 40 litres of gasoline.

But rebate cheques are included with tax returns to make the program revenue-neutral. The idea is that a carbon price shouldn’t leave families with less money, but provide an incentive to find ways to cut down on fossil fuel use by making it cost more.

It also applies to natural gas, propane, jet fuel, and any other liquid fuel, based on the weight of greenhouse gas emissions produced when that fuel is burned.

Canada’s national price only applies in provinces that don’t have an equivalent provincial policy in place — Alberta, Saskatchewan, Ontario and New Brunswick.

A separate policy for big industrial emitters uses the same price but is only charged on a portion of total emissions produced, rather than on the fuels those emitters buy to operate their machinery.

The Citizens Climate Lobby says there 64 carbon pricing policies in place around the world, including a direct price on carbon emissions, and cap-and-trade type systems.

More than two dozen are national policies, and the rest are subnational including state or provincial governments in the U.S. and Canada and cities like Tokyo.

The United States and Australia are the only two fully developed economies without some form of carbon pricing.

This report by The Canadian Press was first published Nov. 2, 2021.


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