Mark Carney's Climate Plan
The "New" Liberal plan is pretty much the same as the "Old" Liberal plan
Back at the end of January, at a press conference announcing his “old” but “new” climate plan, Liberal leadership candidate (and now the Liberal leader) Mark Carney made some very telling statements about how he wants to accelerate the race to net-zero in Canada. One of the most important points he made was that emissions or carbon footprints are the new currency: “We’re able to realize that the world is shifting where one of the biggest determinants of competitiveness in any industry is going to be what your carbon footprint is.”1 He followed this with a critique of America backing away from ESG and emissions accounting, “We can own this. We can absolutely own this as Canada. This is our moment, this is our time. We’re going to leapfrog the United States while they turn inwards and try to turn back the clock.” That leapfrogging will be interesting to see.
It turns out, though, that there’s very little difference between Carney’s climate plan and the one that the Liberals have been implementing since 2015. The only real difference is the replacement of a consumer facing carbon tax with a hidden industrial or business based carbon tax instead. Otherwise, all of the policies are very much the same as what Trudeau’s Liberals have advocated for and implemented.
What exactly does Carney’s climate plan look like? Let’s have a look!
1. His bold move is to remove the transparent carbon tax, hide it by increasing what so-called high emitters are charged, and then create a so-called consumer carbon credit market. What exactly does that mean? When Carney discussed it in the Q&A he explained that the consumers don't "own" those credits, they will be told what they are and they will be given to the government which will put them in the "consumer market" and then the high emitting companies will buy them which will pay for the improvements the consumers made that generated those credits. Or something. Is the “consumer market” going to be based on some kind of personal carbon trading? It’s unclear.
He also said that although the carbon tax will be removed from SMEs “they will have a choice – to make the right decisions to benefit from these types of credits,” meaning they will have to upgrade their businesses, or they won’t be rewarded. Rewarded? By whom, or what? This is, actually, a favourite mantra of Carney’s: Company’s that are “part of the solution” will receive backing or will be rewarded, but those that are considered “part of the problem” will have their capital taken away.
Carney likes to repeat the mantra about giving people more choice:
In the end, what we're going to see is much bigger incentives for households. More choice. More choice for those large companies on how they get emissions down. So they have the options of immediately reducing their emissions or working on reducing their emissions but they also can pay Canadians to reduce our emissions. In both cases our emissions come down. It's a much more efficient system.
If anyone can decode this and what it could mean in practice, please let me know in the comments.
To sum up, Canadians won’t see the carbon tax and they will no longer receive any rebate, instead the carbon tax will be levied on “high emitters” who will pass it on to consumers through higher prices, it just won’t be visibly tied to Ottawa, but the “high emitters” will also be paying consumers through the consumer carbon market. Rather than rebating Canadians for the increased cost of living, Ottawa will take the increases in carbon taxes and redistribute some of it through “incentives” for people to change their behaviours, vehicles, and accommodations. Yet, “big polluters [will] pay consumers to lower their carbon footprint by developing and integrating a new consumer carbon credit market with the industrial pricing system.” What this means in practice remains to be seen.
2. Carney’s climate plan is heavy on the climate finance side, which is understandable given that he could be considered the godfather of net-zero and climate finance. The three main finance proposals are: a Carbon Border Adjustment Mechanism (CBAM), mandatory climate disclosures for all businesses, and a mandatory green transition taxonomy.
a. Carbon Border Adjustment Mechanism: Let’s be clear -- A CBAM is a tariff based on CO2 emissions taxation. It has nothing to do if a country has a strict environmental regulatory regime or not; the only metric is the amount being charged in the form of a carbon tax.
Carney stated that he would implement immediately a CBAM on steel, concrete, aluminum and chemicals to "integrate Canada with allies in the fight against climate change." In other words, he wants Canada to integrate with the EU, which is the only other country with a CBAM. The UK is considering introducing one to be in alignment with the EU. Note that a CBAM requires emissions accounting and 3rd party verification. Essentially, Carney wants Canada to follow in the same footsteps of the EU and UK which are both facing skyrocketing electricity prices, economic degrowth and deindustrialization, and a higher cost of living that is also a lower standard of living.
Again, just to reinforce this point, a CBAM doesn’t care if the product is subject to strict environmental regulations, the only criteria is if the product is subject to carbon pricing.
b. Mandatory climate disclosures for all businesses: This is at the centre of Carney’s moves to take away financing from so-called “high emitters”. How will banks, insurers, or investors know which companies to remove funding from? That sounds a like a lot of work to research companies and find out what they’re doing. But if the government mandates climate disclosures then every company will have to do them as part of their financial accounting and that data will be freely available to whoever wishes to see it. Brian Moynihan, head of Bank of America, explains this clearly at an event in Davos a few years ago.
In fact, Carney mentioned in a podcast with Nathaniel Erskine-Smith that it was really important for that climate disclosure data to be handed over to the UN Net Zero Data Public Utility so that every stakeholder could access that information freely in one place.
Currently, the Office of the Superintendent for Financial Institutions (OSFI) requires banks to report climate disclosures through its Guideline B-15. This is what Carney meant in his conversation above that by the mid-point of this year, banks will have provided their climate disclosures that will now be compared with and ranked with other banks in Canada and globally. Economist Ross McKittrick has an excellent article on this in the National Post. Carney will extend this to all companies, which will make the data gathering that much easier for banks so they will know which companies to support and which ones to take funding away from.
c. Mandate a green transition taxonomy. The green taxonomy has been under active development since October; the task was given to Chrystia Freeland's parliamentary secretary. A taxonomy is essentially a list of government approved industries that are defined as being acceptable or unacceptable for investment. It is intended to work with climate disclosures so that investors, banks, and insurers can decide which company deserves investment, financing, or insurance and which ones don’t.
Here are the items in Carney’s plan that are the same as the Trudeau Liberal plan now:
Home retrofits
EV subsidies
Appliance upgrades Heat pump subsidies
Phase out fossil fuels in federal buildings by 2030
Accelerate and make more severe the oil and gas methane regulations
Expand the EV charging network
Implement Carbon Contracts for Difference (this is a ridiculous policy that is bankrupting places like the UK and have proven to be an absolute disaster in Ontario – see the work of Parker Gallant who has been following this mess).
Speed up federal approvals to accelerate clean energy development and infrastructure.
Conclusion: No wonder eco-activist Minister for Environment and Climate Change Steven Guilbeault endorsed Carney: Carney's climate plan is basically an accelerated version of the Trudeau/Guilbeault climate plan! There’s a couple of new “twists” like the direct statement of intent to have emissions be the new currency, to integrate with other CBAM jurisdictions, like the EU, and to shift the direct carbon tax to "high emitters", but there is no doubt that Carney is doubling down on what has put Canada into its current economic mess. None of this should be a surprise since he’s been advising the Trudeau Liberals since 2020. So much for Building Back Better.
Quotations from the press conference are taken from the video available on CPAC: https://www.cpac.ca/headline-politics/episode/mark-carney-outlines-plan-to-replace-consumer-carbon-tax?id=fe577ab6-8514-4a38-aaca-9b04456dee06
So the Liberal Government, under Carney, is looking for mandatory climate disclosures from companies (Oil and gas), yet there's a current gag order (Bill C-59) on how these companies are addressing climate change and reducing emissions. Secondly, until the market will accept and purchase a 'premium' barrel of 'net-zero' oil, the buyers will continue to find and buy the cheapest oil on the market. Unfortunately, there's no oil police.
Tammy, This reminds me of Davey Crockett movie in Ft Smith Arkansas where poor Davey is taken to the cleaners playing Thimble rig at local fair. Canadians should stick to maple sugar making and hockey. I can't wait to see how Can voters react to Carney's mumbo Jumbo and UN WEF bullshit. That will play well in Albeta, you betcha!