Tuesday, March 23, 2010

The Mark: A new climate change policy for Canada

My proposal for a compromise deal that could break the long stalemate between Alberta and the other provinces on climate change appears in the Mark.

The compromise solution is an “opt-in” federal climate change program. The program would include a range of existing and proposed policy instruments, like a carbon tax that is revenue-neutral at the provincial level, targeted tax incentives or rebates for efficiency measures, and feed-in tariffs for renewable energy. 

The key is that in order to join the program, a province would need to adopt an emissions target that meets or exceeds some minimum federal target. If, for example, the minimum was the U.S. target adopted by the Harper government, nine of the ten provinces would be eligible.

The level of access to the federal dollars in the program would be pro-rated to that province’s emissions target. Failure to achieve the target would lead to reimbursement of the federal program. If Alberta, or another province like Saskatchewan, elected not to participate, there would be no direct cost or punishment. Provinces outside the system could still negotiate targeted federal investments to support emissions reductions, like support for carbon capture and storage research.

Canada has been arguing about climate policy since the mid-1990s, and there is still no federal plan. This compromise could get the willing provinces working together to reduce emissions.

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