Canada’s carbon lesson: Just put a price on it

California’s implementation of AB 32, the Global Warming Solutions Act, is meeting stiff resistance from greenhouse gas emitters and other opponents of climate change regulation. After one (unsuccessful) attempt to gut it at the ballot box, there remain roadblocks to enforcement and dire predictions of economic ruin if the state goes the whole distance. It might be an instructive moment to check in with the only other North American jurisdiction that’s «been there, done that» with California on climate policy.

Five years ago this month, the Canadian province of British Columbia launched a quest to slash its carbon emissions that impressed even then-Gov. Arnold Schwarzenegger. The province’s Climate Action Plan aimed to reduce its overall climate emissions by one-third by 2020 from their levels in 2007. An even more ambitious goal was set for the provincial public sector: a target of zero emissions — «carbon neutrality» — by this year.

How’s it worked out? Perhaps not as well as the plan’s most ambitious cheerleaders hoped, but some real changes are occurring. And as for economic or political poison? No and no.

A months-long inquiry by three reporters I worked with found plenty of skepticism about the climate plan’s means but continuing support for its ends.

The province other Canadians sometimes call «British California» for its progressive impulses in 2007 moved against carbon emissions on several fronts. In addition to ordering provincial agencies to zero-out their greenhouse emissions by 2012, it adopted two key elements of AB 32: instituting a low-carbon fuel standard and committing to join California in a regional carbon cap-and-trade exchange.

British Columbia also went beyond AB 32, and any other U.S. state or Canadian province, by directly taxing the carbon in vehicle fuels. That tax now adds about 21 cents to the price of a gallon of gasoline.

How significantly these measures will reduce British Columbia’s greenhouse gases remains to be seen. Emissions dipped in 2009, but some of that was no doubt due to the recession. Figures for 2010, when Canada’s economy began to grow again, have not yet been calculated.

Still, some early signs are at least promising.

British Columbia drivers are responding to the carbon tax at the pump. Per-capita fuel purchases dropped by 3% more in B.C. than elsewhere in Canada in the wake of the recession, and its drivers now burn less gasoline — and therefore release fewer emissions — on an individual basis than any others in the country.

The goal to eliminate emissions by the provincial public sector — which in Canada includes hospitals, local governments, public schools, universities and provincial prisons — has been met, on paper at any rate.

Throughout the province, hundreds of public agencies beefed up insulation in their offices and installations, bought solar panels or replaced older vehicles with higher-mileage units. Collectively, the government claims, those measures reduced emissions by about 36,000 metric tons a year.

But the bulk of the zeroing-out of the province’s public sector carbon footprint — about 20 times the reduction in its actual carbon emissions — was accomplished on paper, through the purchase of credits for «offsets.» For a price, agencies could keep emitting greenhouse gases if they bought credits from businesses or private institutions that were making offsetting reductions elsewhere in the economy.

The real value of such offsets, however, isn’t clear. Some research suggests that most claimed reductions, which are the basis of credits, are not real and, therefore, that «carbon neutrality» is just a fiction.

On top of that, the way the government enforced the credits programs has rankled the public sector. It is limited to buying credits through a state corporation, at a set price that is higher than the market price of credits. And many object to paying public funds to profitable private firms in exchange for their emission cutbacks. Other elements of the plan have also come in for question, in ways that echo problems in California.

The low-carbon fuel standard has been contentious in both jurisdictions. In California, a court decision (now on appeal) prevents the state from enforcing its standards.

The British Columbia plan calls for reducing carbon in the production of all fuels by 10% by 2020. But making fuel from tar sands emits a lot more carbon than making it from other sources, such as crude oil. Because the plan applies much the same rules to different fuels, it’s unlikely the province will meet its 2020 goal for cleaner fuel production.

As for cap and trade, so far it’s a nonstarter. California and another Canadian province, Quebec, recently launched trial versions of the carbon cap-and-trade market that British Columbia plans to join. But B.C. has yet to detail corresponding rules for its participation. Meanwhile, even if cap and trade were up and running, a quarter of the province’s emissions — mainly from its booming natural gas fields — would remain untamed by any current policy.

What does it all add up to? The climate plan hasn’t been a home run, but it has been a base hit. And there are plenty of ways to fix what isn’t working well. As important: There have been no game-losing outs either.

British Columbia’s economy wasn’t sent to the dugout, for example. It fared better than most through the trough of the recession and in November boasted an unemployment rate of 7%, more than 4 percentage points lower than California’s 11.3% at the time.

Nor was the political party most responsible for North America’s first carbon tax defeated. The British Columbia Liberal Party fought the next election on the issue, against opponents campaigning to «ax the tax» — and won. Indeed, the party won a majority of seats in the legislature.

The nameplates have changed in the governor’s office in Sacramento and the premier’s office in British Columbia. The new Liberal Party incumbent in the north is Christy Clark.

Earlier this month, Clark introduced a policy to encourage the export of Canadian natural gas to markets in Asia, expanding the industry most responsible for the unaddressed quarter of her province’s climate emissions. But at the same time, she is insisting that British Columbia double down with «more ambitious means of offsetting greenhouse gas emissions.»

The lesson from Canada for would-be climate leaders is this: Just do it. Put a price on carbon, one way or another. How much is levied, and where and exactly how it’s levied, aren’t as important as the principle that we all pay something for emissions.

In Canada — and in California — it will take time, and trial and error, to get climate change regulations off the ground and working. It’s difficult, yes. Complicated too. But it’s not economic or political suicide.

By Chris Wood, who worked with Tom Barrett, Geoff Dembicki and Christopher Pollon as a team to produce a nine-part series analyzing the results of British Columbia’s Climate Action Plan, published by the Tyee in Vancouver, B.C., and produced through the nonprofit Tyee Solutions Society.

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