Taken alone, I should be happy that my federal government wants to begin serious talks with the United States about establishing a continental cap-and-trade system for carbon emissions. Fact is, I was expecting this kind of knee-jerk reaction from my government as soon as Barack Obama got elected to the White House. It’s why, as a Canadian, I’m so encouraged by Obama’s win. His aggressive energy and environmental policies will force a laggard like Canada to act after years of being hip-connected with the Bush administration’s policy of half-measures and inaction.
The fact that a day after Obama is elected that the Canadian government comes out and says, hey, let’s make a deal, let’s establish a continental cap-and-trade regime — well, it just stinks to me. Why hasn’t Ottawa pushed this idea before? Why didn’t the Conservatives put it out there earlier for public discussion and to show that Canada can show leadership on the climate file? (Note: It was disclosed in the Conservative platform a week before our Oct. 14 election but didn’t get much coverage. See comments below).
The feds say they didn’t introduce push it before because there was no point in initiating talks with a lame duck U.S. administration, but that’s difficult to believe given the Conservative party’s track record on climate. The more likely reason is that Prime Minister Stephen Harper was waiting to see if Obama *didn’t* get elected so he could continue to align Canada with less aggressive Republican climate policy. (Note: But I’m willing at this point to give him the benefit of the doubt).
Now that the writing is on the wall — Obama is in and has made energy and climate his top priorities — the Conservatives figure the best strategy now is to appear proactive and cooperative with the U.S. in hopes of being able to negotiate a cap-and-trade regime that’s maybe not so tough on Canada, which through its oil-sands developments is acting these days like a petrostate. Canada will be swept up anyway by U.S. changes, so coming out now with talk of deal-making allows the Conservatives to take credit later for something it has resisted but which Canadian provinces like Ontario and British Columbia have promoted.
It must hurt Harper and executives in the oil patch to see stories like the one on Dow Jones yesterday with the headline: “Under Obama, Dark Days Seen Ahead for Fossil Fuels.” According to the story, under Obama “energy and environment policy marks a tectonic shift for the nation. He would move the U.S. away from petroleum as its primary energy source and towards renewable energy, advanced biofuels, efficiency and low greenhouse-gas-emitting technologies.” In fact, Obama wants to create a windfall tax on oil that trades over $80 a barrel, and the funds from that would be used to create a government venture capital fund and incentive program aimed at renewable energy and clean technologies. He’s also focused on reducing U.S. transportation fuel consumption by doubling CAFE efficiency standards. And, with respect to his plan to create a national cap-and-trade regime, the aim is to return the United States to 1990 levels by 2020.
The Conservatives plan to lower greenhouse gases three per cent from 1990 levels by 2020, or 20 per cent from 2006 levels over that same period. But few believe there is a serious plan in place to get anywhere close. And rather than establish hard caps on emissions, Harper has emphasized initial caps on carbon intensity, meaning an individual barrel of oil might have a lower carbon footprint but the planned overall increase in oil-sands production would still lead to emission increases.
The desire now to engage Obama in a continental cap-and-trade regime is likely an attempt to negotiate some key concession for Canada’s oil sands, playing on Obama’s promise of getting the United States off of Middle East oil within 10 years. And it’s a good cunning thing to play on. It’s doubtful Obama could achieve such a goal without relying on increased production and imports from Canada’s oil sands. The Harper government knows it, and likely sees this as its strongest — perhaps its only — card to play.
Given all this, it will be interesting to see how Obama’s administration responds to the Harper government’s invitation to negotiate a continental cap-and-trade pact. The good news is it will draw a lot more attention — and scrutiny — to the oil sands, its environmental footprint and the unsustainable way it is currently being developed.