OPINION | Liberals' climate balancing act: The world is watching

EDITOR'S NOTE:This is the fourth in a series of articles from energy and environmental economist Andrew Leachabout the federal political parties' climate plans. Read his previous articles here:

• OPINION |Greens' climate plan adds up to Mission: Improbable
• OPINION |Conservative climate plan is cloaked in mystery, choked with irony
• OPINION | NDP climate plan tries (and fails) to carve out middle ground

For the first time, we're fighting a federal election in which one of the main issues will be the policies the incumbent government has implemented to lower greenhouse gas emissions.

Not only will we be arguing about hypothetical future policies and targets, we're going to be litigating existing policies, too. And the world will be watching.

The closest analog to the position that Justin Trudeau's Liberals find themselves in today is likely that of then-premier Gordon Campbell's B.C. Liberals in the election of 2009.

In that election, held shortly after the Campbell Liberals had introduced the country's first economy-wide carbon price, parties to the left and right of Campbell opposed B.C.'s carbon tax.

The NDP campaigned on an axe-the-tax platform, promising instead a cap-and-trade program and stringent regulations.

The Conservatives campaigned on repealing the carbon tax in favour of, well, nothing.

In the end, Campbell's Liberals were re-elected, the carbon tax stayed in place, and it still remains in place.

Today's circumstances are similar for the federal Liberals.

Taking fire from both sides

On the left, the Greens and the NDP promise a lot more action on climate change, although we don't have much detail on the policies that will do the heavy lifting to meetambitious targets.

The Conservatives promise far less action on climate change, although they are loathe to suggest that this might lead to more emissions.

Like fighting a land war in Asia, trying to occupy the middle ground on climate change is almost bound to end badly.

By any measure, the policies we've seen introduced over the past four years are aggressive, and the Liberals have had to go to war to defend them. They built a policy that worked for collaborative provinces, only to see that spirit of collaboration disappear with the departure of Patrick Brown and the election of Doug Ford and Jason Kenney.

They bought a pipeline, but that made nobody happy. The left felt it was a subsidy to oil and gas, the right felt it would not have been needed if only Trudeau had (insert your preferred, vaguely defined magic wand waving here) and many even see it as an elaborate plan to not build the pipeline.

Self-inflicted wounds

While outside forces have hurt the Liberals, they've also hurt themselves.

They've undermined their own targets, suggesting more than once that more stringent goals are needed. They've undermined their rationale for carbon pricing, which they've described ad infinitum as the best policy choice for the economy, through more reliance on regulations like their Clean Fuel Standard and subsidies for electric vehicles. They've been unable to offer a clear vision that reconciles growth in the oilsands, new LNG facilitiesand meeting Canada's emissions targets.

In the 2015 campaign, Trudeau claimed that, "if we set serious emission targets, then everything else falls into place and the expansion of the oilsands will be done in a way that doesn't interfere with us meeting our targets."

Despite much slower-than-predicted oilsands growth since 2015, Trudeau still faces a large gap to meet our targets 79 megatonnes (Mt) in the most recent estimatesand his government forecasts that oilsands and LNG production emissions will increase by 29 Mt between now and 2030.

The Liberals haven't released a climate plan yet, but we likely know most of what will be there: carbon pricing, the clean fuel standard, support for electric vehicles and green technology and, because everybody loves them, support for building retrofits.

What we don't know is whether we'll see new policies stringent enough to close the gap between our emissions and our targets.

A brief note from the author

Before we go further, a bit of personal background.

In 2015, I helped design the Climate Leadership Plan for Alberta's government. The current federal policy, an economy-wide carbon price supplemented with an output-based pricing system for large emitters, is very similar to the plan I helped build in Alberta, and the federal policy to accelerate the phase-out of coal-fired electricity backstopped a commitment that Alberta implemented as part of its 2015 plan as well.

So, if you're reading here expecting me to have a lot of negative things to say about those policies, you're going to be disappointed.

From the earliest days of the Liberal government (in fact, even a few days before it was sworn in) until as recently as this week, I've had the opportunity to provide advice and analysis to political and bureaucratic staff on these policies. If that dissuades you from reading any further, so be it at least you were able to make an informed choice.

OK, good, you're still here. Here's what I'm hoping we'll see from the Liberals.

A plan to meet the targets they have

First, resist the urge to commit to a stronger 2030target.

Stacked up against most countries' commitments, Canada's Paris target is already quite stringent. It demands deep cuts relative to business-as-usual and our economy is lacking for relatively cheap emissions reductions.

Recent work from the International Monetary Fund (IMF) makes this really clear. With the exception of Australia, Canada's Paris commitment represents the deepest cut relative to what would otherwise be expected to occur among the G20 countries.

The IMF also finds that, if the G20 implemented Canada's carbon pricing policies, they'd collectively exceed their Paris commitments.

Others will argue that the world needs to go further than the Paris commitments, and that may be true, but we're not going to get there by consistently moving the goalposts so that ambitious and politically challenging policies quickly become failures.

Second, the Liberals need a plan to meet the target they have.

To do that, they're going to need the policies they've already announced and some significant new measures. They're also going to people to invest based on their policies, and investors need to know what world they should bet on.

Imagine trying to value an emissions-reducing investment when the Liberals tell you they are definitely not going to increase the carbon price beyond $50 per tonne, unless they do.

I put this question directly to a Liberal campaign official and the answer I got was that the election is about the next four years, and the carbon pricing plan for those next four years is clear: the price will increase to $50/tonne by 2022, followed by a year to review and reset. At that point, we'll be ready for the next election campaign.

The Liberals are correct that current governments cannot bind future governments, but climate change mitigation requires long-term investments and so the signals we send about new and existing policies matter.

A philosophical choice

When it comes to policies, the Liberals also have a philosophical choice to make: are they going to double-down on carbon pricing, or continue to pivot toward more popular but generally more costly policies like regulations and subsidies?

Having gone to war for carbon pricing, it would be disappointing to see the Liberals put a lot of weight on policies other than carbon pricing to close the gap to our 2030 targets. Subsidies and regulations might be less politically challenging than carbon pricing, but they'll make the path to our targets more costly for Canadians as a whole.

Reconciling two solitudes

Finally, the Liberals need to deal with the fact that the fights over carbon pricing, pipelines, and the oilsands have divided Canada in a profound way.

For years, Alberta's oil industry was asking for a level playing field in emissions policy in which emissions from cars on the 401 in Ontario would face the same treatment as emissions from the oilsands.

They got it, almost to the letter.

ButAlberta also got other things: a tanker ban on B.C.'s north coast, stalled pipelines, and a new, untested regulatory regime at a time of uncertainty in the industry. This has led to a rise in energy nationalism that the Trudeau government needs to counter.

On the other hand, Canadians concerned about climate change can count a national carbon price, accelerated coal phase-out, and a national clean fuel standard as significant progress. However, they've also got a government-owned oilsands pipeline and are staring down a big gap to our national targets at a time when concern over climate change is increasing and oilsands emissions continue to grow.

Perhaps there's a way for Trudeau to reconcile these two solitudes.

Selling Canada to the world

Trudeau needs to stop apologizing for Canada and make our emissions policies a point of pride for our energy sector.

What do the loud voices want? Climate policy that affects emissions in the United States, China and India at the same rate as it applies in Canada. They're not wrong to want that.

What do environmentalists want? Policies sufficiently stringent to meet global goals. Also not wrong.

To that end, I hope we'll see Trudeau frame the issue not as Canada needing to do more, but as the world needing to catch up to Canada's policies.

What would happen if, globally, we had a $50 per tonne carbon price, a phase-out of coal-fired electricity by 2030, a clean fuel standard equivalent to that proposed for Canada and (despite my lack of love for them) global subsidies for electric vehicles at the rates proposed by the Trudeau Liberals? We'd have a vastly different global energy system and we'd be on track or close to on track to meet global climate change goals.

You don't hear that nearly often enough from Trudeau and the Liberals.

Global implications

Trudeau also needs to get Canadians to place their bets.

The Conservatives are promising a world with increasing demand for Canadian fossil fuels, an implicit bet on less stringent climate policies worldwide than those needed to meet global goals.

Trudeau has to convince Canadians that's the wrong horse.

If the world is acting on climate change, meeting our own targets will be much easier since the demand pull on fossil fuel extraction will diminish, while the global technology push will accelerate.

If the world isn't acting aggressively, Canada's policy path becomes harder, more expensive and fraught with competitiveness concerns.

When Canadians vote on Oct. 21, the results will have global implications for climate policy. If Trudeau's government falls, it will be chalked-up as yet another electoral defeat for action on climate change.

Trudeau's climate platform needs to make the case for his policies to Canadians and, if it fails to do so effectively, it will have implications far beyond our borders.

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