Prospects for Change in Canadian Climate Policy

The following article is a guest post by H. E. Taylor, who you might recognize as the one who graciously provides us with the weekly GW news roundups. Enjoy!

Prospects for Change in Canadian Climate Policy

In short, the prospects are bleak and are likely to be driven from the United States. Let me explain.

Those of you living elsewhere may have noticed during all the Obama razzmatazz that a Canadian election was called in September and held in October. These are the results from Elections Canada.

Party MPs Votes Popular Vote
Bloc Québécois 50 1,379,565 10.0%
Conservative 143 5,205,334 37.6%
Green Party 0 940,747 6.8%
Independent 2 89,524 0.7%
Liberal 76 3,629,990 26.2%
New Democratic Party 37 2,517,075 18.2%

Note that none of the parties has a clear majority, which would be more than half of the 308 seats. Note also that 62% of the country voted against the Conservatives. This is what minority PM Harper jokingly calls a mandate.

The country had just come out of two years of similar minority rule, so nobody was terribly surprised by these results. Then on Thursday Nov. 27th, the finance minister stood up in the House and delivered his infamous FU [Financial Update]. The minority government denied that it was going into deficit, they outlined no action whatsoever for dealing with the recession, and they took several misguided, ideologically driven swipes against workers and the Opposition --- denying civil servants the right to strike and cutting public funding of political parties. The House of Parliament exploded. The Opposition parties quickly decided Harper had to go. In parliamentary language, the Conservative minority government lost the confidence of the House.

The Liberals tabled a motion of non-confidence which the NDP and the BQ pledged to support. The Conservatives got desperate and started throwing things out of their FU, but the Opposition was adamant. Harper had to go. They struck a coalition.

Harper exercised his scheduling authority and postponed the non-confidence vote for a week. Fighting for his political life, Harper addressed the nation, but said nothing new. The next morning he inveigled the Governor General, the head of state in this parliamentary democracy, into proroguing the House until January 26th, 2009.

Now Canadians will be subjected to seven plus weeks of propaganda and then the Opposition will turf Harper out of office.

On the policy front, what can we expect from the Coalition? The Liberal losses in the last election were widely interpreted as a repudiation of Dion's Green Shift policy, even if it was more likely a result of Dion's tendency to stumble tongue his English. His leadership will end in May 2009 if not before. However, the Liberals are as much the tools of industry as the Conservatives. They have a history of talking a better story than they walk. Their primary partner in the Coalition, the NDP is fervently in favour of carbon trading, which will be complicated. The major hurdle is that under Confederation, the provinces have jurisdiction over resources. This makes implementing a comprehensive carbon trading system dependent on getting the provincial and territorial governments to agree, never an easy task. The major oil province, Alberta, sees such plans as an attempt at extortion.

If Harper should manage to cling to power, we will see no progress from him. He has consistently pushed Bush-lite policies that do nothing for the climate.

Meanwhile in the USA, we will see how how far Obama gets in pushing a green new energy agenda. If he is successful, such a policy could well have repercussions in Alberta. If the clean energy terms of the recently passed energy bill are enforced, Alberta could lose its primary market for tar sand oil. Whether Alberta would jump into bed with the Chinese to avoid such American legalities is questionable.

So there you have it. Nothing will happen in the short term and what happens in the medium term will likely depend on whether the coalition can be made to work. Don't hold your breath.

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Canada is free to enact more stringent climate policies than the United States, but not free to enact less stringent ones.

1.As long as little is being done in the United States, American corporations are not concerned about being made uncompetitive with foreign firms because of climate change policies.

2.If the United States did adopt a serious climate policy (a national cap-and-trade plan with auctioning, perhaps, or a carbon tax), those firms would suddenly be very concerned about losing business to firms not thus restrained. This is especially true in sectors with high emissions per dollars worth of output. This includes heavy industry, the petroleum sector, and so forth.

3.These firms will lobby the American government to pressure its trading partners to adopt comparable policies.

4.These firms will find many supporters in Congress who think similarly. Politicians will also be fearful of domestic job losses and the relocation of production to foreign jurisdictions with less stringent rules.

5.In the case of Canada, legal vehicles through which this might occur include the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO). Potentially, other agreements pertaining to transboundary pollution might play a role.
6.If taking a legal route fails or is not desired, it is always possible for the US to put enormous trade pressure on Canada. 85% of Canadian exports go to the United States and even illegal trade blocking moves by the US can be so painful as to force a surrender (as with softwood lumber).

7.No Canadian government will be willing to sacrifice access to the American market, even if avoiding it requires a considerable loss of face.