Monday, January 4, 2021

Trudeau Hikes Carbon Tax to $170 a ton by 2030 to Reach 30% GHG Reduction Climate Goal

On December 11, 2020 Prime Minister, Justin Trudeau, announced Canada's strengthened climate plan, A Healthy Environment and a Healthy Economy. The proposed plan is supported by an initial $15 billion in investments.

The plan's measures:
  • Make places more affordable by cutting energy waste and create thousands of good new jobs, including through investments in retrofits.
  • Make clean, affordable transportation and power available in every community, by expanding the supply of clean electricity through investments and other measures to increase renewables and next-generation clean energy and technology.
  • Continue to ensure pollution isn't free and households get more money back by giving more money back to households in a way that leaves the majority of them better off, and reduces pollution, by continuing to put a rising price on pollution through to 2030.
  • Build Canada's clean industrial advantage by helping Canadian businesses reduce emissions and make low-carbon products that the world wants to buy now and into the future.
  • Embrace the power of nature to support healthier families and more resilient communities making communities more resilient to extreme weather by planting two billion trees, supporting sustainable farming, and better managing, conserving, and restoring our nature.

"Prime Minister announces Canada's strengthened climate plan to protect the environment, create jobs, and support communities"
Press Release dated December 11, 2020
In "Ottawa to hike federal carbon tax to $170 a tonne by 2030" John Paul Tasker of the Canadian Broadcasting Company reported that  its centrepiece is a gradual hike in the federal carbon tax on fuels to $170 a tonne by that year. The carbon tax will increase significantly from its current level — the tax is just $30 a tonne this year — as part of a push to meet and surpass Canada's ambitious goal of reducing greenhouse gas (GHG) emissions by 30 per cent below 2005 levels by 2030. In real terms, that would mean lowering GHG emissions from 732 megatonnes to 513 megatonnes by 2030. With the plan announced Friday, the government now forecasts national emissions will hit 503 megatonnes by 2030.

"Simply put, it would be much harder to cut pollution if it was free to pollute. The principle is straightforward: a carbon price establishes how much businesses and households need to pay for their pollution. The higher the price, the greater the incentive to pollute less, conserve energy and invest in low-carbon solutions," says the government's new climate plan, titled, "A Healthy Environment and A Healthy Economy."

The tax already was expected to hit $50 a tonne in 2022. With this new initiative, the tax will now increase by $15 a tonne each year for the next eight years in order to wean consumers off fossil fuels in favour of cleaner energy sources.

The tax hike will result in higher costs for consumers when they buy gasoline. The price at the pump will increase by 37.57 cents a litre by 2030 as a result of this new plan, and the cost of light fuel oil for home heating, natural gas and propane will rise as well.

To compensate for the cost-of-living increase, the government said it will continue to return most of the money collected by this program through rebates.

Under the current system, the money is returned to individuals and families annually through the 'Climate Action incentive payment' when they file tax returns. Starting in 2022, the carbon pollution rebate payments will be distributed on a quarterly basis.

The average family of four in Ontario will collect roughly $2,018 a year in climate rebates by 2030.

The cheques will be higher in provinces like Alberta and Saskatchewan — $3,242 for a family of four in Alberta and $3,829 for a similar family in Saskatchewan — because the people in those provinces generate more carbon emissions per capita.
by John Paul Tasker
Canadian Broadcasting Company
December 11, 2020
The carbon tax and the court
Ottawa imposed the carbon tax on jurisdictions that have so far refused to implement their own carbon pricing scheme: Alberta, Ontario, Manitoba and Saskatchewan. The constitutionality of the federal carbon tax is still before the Supreme Court of Canada.

Trudeau dodged questions Friday about what might become of his government's climate plan if the court decides Ottawa doesn't have the right to impose such a tax on provinces.
Global emissions will need to reach "net zero" around mid-century to limit global temperature increases to 1.5 C, according to the International Panel on Climate Change (IPCC). The 1.5 C target was a goal of the Paris climate accord, signed by almost all countries, including Canada.

Reaching "net-zero" by 2050 would mean that emissions produced 30 years from now would be fully absorbed through actions that scrub carbon from the atmosphere — such as planting trees — or technology, such as carbon-capture and storage systems. 

Trudeau said that just as Canadians have relied on scientists to help the country out of the COVID-19 pandemic, they must also heed their advice on the threat of climate change. He said science isn't "a pick-and-choose buffet."
"There is no vaccine against a polluted planet. It's up to us to act because there is a real cost to pollution."

Ontario Premier Doug Ford, an ardent critic of carbon pricing, said today he was deeply concerned by Trudeau's plan to hike the carbon tax, saying such a sizeable increase could be economically devastating.
Greenpeace called the plan "serious and well-thought out," although it still called on Trudeau to commit to completely "decarbonizing" the country. Climate Action Network Canada called the new pricing regime "essential" as it advocated more spending on climate initiatives. Clean Prosperity called the $170 a tonne carbon tax a "bold, brave and wise move will set Canada on the path to decarbonization."

The government also is moving ahead with a new clean fuel standard — a plan to reduce the carbon intensity of fuels and energy use in Canada — but is dropping a push to put similar regulations on gaseous and solid fuels.
The government says it will spend $2.6 billion over seven years, starting in 2020-21, to help homeowners improve the energy efficiency of their homes through about 700,000 home improvement grants worth up to $5,000 each. The government also says it will pay for one million free EnerGuide energy assessments.
The government also is promising to invest $287 million over two years to continue an existing program that provides incentives to people who buy zero-emissions vehicles. The program provides a rebate of up to $5,000 to consumers who buy "light duty zero-emissions" vehicles.
In "Trudeau Hikes Carbon Tax in Bid to Reach 2030 Climate Goal" Theophilos Argitis notes that "...The measures, announced Friday in Ottawa by Trudeau and Environment Minister Jonathan Wilkinson, seek to put the resource-rich northern nation on track to cut greenhouse-gas emissions by as much as 40% below 2005 levels by the end of this decade, versus the current 30% goal."

Central to achieving that will be an increase in the government’s carbon price to C$170 ($133) per metric ton by 2030. It was already on track to hit C$50 two years from now, and will increase by C$15 a year after that. Though revenue from the levy is returned to the provinces via consumer rebates, it’s being challenged in the courts by oil-producing Alberta and others.
Trudeau’s pledge came] ahead of a key United Nations climate conference hosted by the U.K., the gathering comes five years after the Paris agreement and ahead of the pandemic-postponed COP26 summit in Glasgow. European Union leaders agreed ... to cut pollution by at least 55% by 2030, up from 40% previously.
Alberta Environment Minister Jason Nixon called the tax “another attack on Alberta’s economy and Alberta’s jurisdiction” and said it would suppress investment and raise costs. “This is not the time to be considering increasing the cost of living for people of Alberta,” he said at a news conference.

C$15 Billion Plan
Trudeau’s team pledged C$15 billion in new spending over 10 years, some of which will be funneled through green initiatives funded by the retooled Canada Infrastructure Bank.

Measures announced Friday include:
Investing as much as C$3.2 billion over 10 years to plant two billion trees
Spending as much as C$631 million over a decade to restore and enhance wetlands, peatlands, grasslands and agricultural lands
Investing C$1.5 billion in a low-carbon and zero-emissions fuels fund to increase the production and use of clean fuels
A new Net Zero Accelerator innovation fund of C$3 billion over five years “to rapidly expedite decarbonization projects with large emitters”

The increase in the carbon levy will translate to drivers paying nearly 38 Canadian cents more per liter of gas at the pumps by the end of the decade, officials at Wilkinson’s department said in a briefing. Costs for home heating oil, natural gas and propane will also rise.

But the government has scaled back plans for a new fuel benchmark. “The scope of the Clean Fuel Standard has been narrowed to cover only liquid fossil fuels, like gasoline, diesel and oil, which are mainly used in the transportation sector,” according to a background document. The standard had been initially designed to cover gaseous and solid fuels as well.

Some business groups are looking for exemptions. Chicken farmers should receive relief from carbon charges on the natural gas and propane they use to heat barns because they produce food that “should not come with an additional fee,” said Lisa Bishop-Spencer, director of brand and communications for Chicken Farmers of Canada.

By Theophilos Argitis
December 11, 2020
In the press release "Prime Minister announces Canada's strengthened climate plan to protect the environment, create jobs, and support communities"

Canada's strengthened climate plan builds on continuing work with provinces and territories through the Pan-Canadian Framework on Clean Growth and Climate Change (PCF), which was released in 2016. It means Canada can exceed our 2030 Paris Agreement emissions reduction target and establish the building blocks to get to net-zero by 2050.

Quick Facts
  • The estimated size of the global clean technology market is expected to range between $2.5 trillion and $6.4 trillion (USD) by 2022-23. This strengthened climate plan seizes that opportunity and positions Canadian workers and businesses to be among the leaders in the increasingly low-carbon global economy.
  • TIn the recent Fall Economic Statement, the Government of Canada proposed to support the economy's clean and competitive transition by providing grants to help Canadians make their homes greener and more energy-efficient. It will provide additional funds for the installation of new charging and refueling stations for zero-emission vehicles, and more support for large-scale clean power transmission projects.
  • The government also proposed in the Fall Economic Statement to invest in nature-based climate solutions, including to restore degraded ecosystems, protect wildlife, and establish a new Natural Climate Solutions for Agriculture Fund.
  • While some of the proposed measures in this plan will take effect almost immediately, others will require work and collaboration with provinces and territories and through nation-to-nation, Inuit-Crown, and government-to-government relationships, as well as with many economic sectors, to ensure a strong, workable plan that we can deliver together.
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