With our busy lives these days, we don’t always know exactly what our neighbours are up to. But unconsciously (or consciously) we all compare ourselves to our neighbours– who has the better car or lawn, or nicer house? Similarly, climate policy wonks might wonder, which jurisdictions are moving ahead with the most effective policies? While Ontario has made strides in reducing its greenhouse gas (GHG) emissions from the energy sector by embracing renewable power and phasing out the production of coal-fired electricity, other provinces have pulled far ahead when it comes to using economic instruments to lower emissions from the industrial sector. In Ontario we don’t always hear about the great things happening on the climate file in Quebec, British Columbia and Alberta.
At one point, Ontario seemed to be keeping pace with its leading provincial counterparts. It was a leader within the Western Climate Initiative, and seemed to be charging ahead with its own cap-and-trade program. Now, several years, three discussion papers, and rounds of industry consultations later, the fear of harming our economic competitiveness seems to have stalled program implementation. Contrast that to our next-door neighbour Quebec, which has a functioning cap-and-trade system in place, auctioned its first permits last week and is preparing to link its program early next year with California’s.
British Columbia’s carbon tax has been receiving a lot of favourable attention from economists and policymakers all over North America and globally as an example of good environmental and economic policy. It’s been in place five years, and people are getting used to it. The tax works: personal and corporate income taxes are the lowest in Canada, the economy has grown faster than the rest of Canada’s and emissions have fallen. Alberta’s Specified Gas Emitters Regulation, while not very stringent, has at least put a price on carbon; a huge step forward for a resource-intensive province.
The point is that someone always has to be first, or in financial terms, the first mover. Good policy requires some degree of risk. Ontario has dithered while its neighbours have moved ahead, and they will reap the benefits. We need to reframe climate policy as an economic opportunity: the opportunity to be more efficient, invest in new technology and spur new industries. A price on carbon will help these green industries grow. We need to just look over the fence at what our neighbours are doing.