Canadian

Climate Change

Policy: MBI

Selection

Nathan Adams

23rd November 2016

EES1134H

Questions:

Why have some provinces adopted MBIs (cap-and-

trade or a carbon tax), while others have not?

Obstacles

Differences in policy design

What is the history of the Western Climate Initiative?

Why so many drop outs?

Comparative politics of provincial cap-and-trade

Introduction

Papers:

1. Obstacles to Carbon Pricing in Canadian Provinces

(Houle and Macdonald, 2013)

2. Understanding the Selection of Policy Instruments in

Canadian Climate Change Policy (Houle and

Macdonald, 2012)

3. Overview of Quebec & California’s Carbon Market:

2015 Update (Houle and Lachapelle, 2015)

1. Comparative Politics of Sub-Federal Cap-and-Trade:

Implementing the Western Climate Change Initiative

(Houle, Lachapelle and Purdon, 2015)

Adoption of Carbon Pricing

What explanation is there for the different

policy instruments selected in different

provinces?

The way that policymakers frame the issue of

CC in provincial climate change plans is a main

explanation for instrument selection

Houle and Macdonald, 2012

3 scenarios

Scenario 1:

CC considered as environmental threat

Coercive policy (regulation/standards)

Scenario 2:

CC considered as economic opportunity

MBIs (carbon markets/taxes)

Scenario 3:

CC mitigation as a threat to economy

Non-coercive policy (voluntarism) or no policy

Adoption of Carbon PricingHoule and Macdonald, 2012

Different Carbon Pricing Designs Scenario 1 Provinces (CC as a threat):

Maritime Provinces

Prince Edward Island

Nova Scotia

New Brunswick

Newfoundland and Labrador

Most concerned about impacts of CC

Rising sea levels and more severe storms

Accept that CC has already had impacts and will intensify unless emissions are reduced

Different Carbon Pricing Designs Scenario 2 Provinces (CC as an economic opportunity):

British Columbia

Manitoba

Quebec

Ontario

Saskatchewan ~

All identified economic gain from CC

Make and save money through green economy development

Strategies focus on economic opportunities, not impacts

Different Carbon Pricing Designs

Scenario 3 Provinces (CC mitigation as an economic threat):

Alberta

Saskatchewan ~

Environmental progress cannot be achieved whilst maintaining economic prosperity

Less competitive

Scenario 1

Scenario 2

Scenario 3

Scenario 2

F. Fuels

Obstacles to Carbon Pricing Political Obstacles (Kent’s talk last week)

Public Opinion (Issue-Attention Cycle)

Provincial Party System

Main industrial emitters presence

Reliance on oil/gas for provincial economy

Provincial economies and electricity that depend less on oil/gas can adopt cap-and-trade more easily less lobbying

(Alberta is only now introducing Carbon tax)

Examples: Ontario Nuclear & Quebec Hydro

Western Climate Initiative

Market-based program

to reduce GHG emissions

Cap-and-trade

AB & SK 2008: ‘’cash

grab by Canada’s resource-

poor provinces’’

Originally 11 partners, now

only 5 Why?

Why so many drop outs?

Western Climate Initiative

Western Climate

Initiative Will See

Manitoba, Ontario,

Quebec Link Up Cap-

And-Trade Systems

Canadian Press, 2015

[SCENARIO 2

PROVINCES]

Scenario 2

Joined

WCI

Scenario 3

Have not

Joined

WCI

Scenario 2

Joined WCI

(no CT)

Comparative Politics of Provincial

Cap-and-TradeQuebec (long-term WCI partner):

Broad Inter-Party Consensus across political parties on anthropogenic CC and legitimacy of MBIs

No political barrier

Marginal Oil and Gas sector (next diagram)

BC (WCI partner, but no Cap-and-trade):

Oil and gas sector significant (next diagram)

Lack of political consensus on which MBI approach (recap last week’s axe the tax) political barrier

Only Scenario 2 province hesitant on joining WCI cap-and-trade due to satisfaction with present carbon tax

Why have some provinces adopted MBIs (cap-and-

trade or a carbon tax), while others have not?

Obstacles = politics and economy

Differences in policy design = Scenarios 1-3

What is the history of the Western Climate Initiative?

Why so many drop outs? = public opinion

Comparative politics of provincial cap-and-trade =

political consensus and influence of fossil fuel

industry

Recap

Questions?