Transcript: Losing Ground on Carbon Pricing | Jan 15, 2019

Steve sits in the studio. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a blue suit, white shirt, and spotted blue tie.

A caption on screen reads "The battle over carbon pricing. @spaikin, @theagenda."

Steve says IN BARELY SIX MONTHS,
ONTARIO WENT FROM BEING A CAP
AND TRADE PROVINCE TO TAKING THE
FEDERAL GOVERNMENT TO COURT TO
STOP CARBON PRICING.
IT IS JUST ONE INSTANCE OF AN
ABOUT FACE ON SOMETHING ONCE
WIDELY-PRAISED BY ECONOMISTS AND
OTHERS ACROSS THE POLITICAL
SPECTRUM.
CANADA'S ECOFISCAL COMMISSION
WAS CREATED BACK IN 2014 TO
ADVOCATE FOR CARBON PRICING.
ITS CHAIR IS CHRIS RAGAN.
HE IS ALSO DIRECTOR OF MCGILL
UNIVERSITY'S MAX BELL SCHOOL OF
PUBLIC POLICY, AND HE JOINS US
NOW TO REFLECT ON HOW
DRAMATICALLY THINGS HAVE SHIFTED
IN THE PAST FEW YEARS.

Chris is in his fifties, clean-shaven, with receding gray hair. He's wearing glasses, a dark blue suit, gray shirt, and gray plaid tie.

Steve continues GOOD TO HAVE YOU BACK IN THAT CHAIR.

Chris says THANKS FOR HAVING ME.

Steve says YOU WERE HERE ALMOST
FOUR YEARS AGO WHEN YOUR
COMMISSION WAS CREATED.
WAS IT YOUR VIEW AT THAT TIME
THAT CARBON PRICING WAS ACTUALLY
GAINING TRACTION ACROSS THE
COUNTRY?

The caption changes to "Chris Ragan. Ecofiscal Commission."
Then, it changes again to "A consensus broken?"

Chris says NO.
I THINK IT WAS OUR VIEW AT THAT
TIME THAT THERE WAS NOT ENOUGH
PEOPLE TALKING ABOUT CARBON
PRICING.
SO WHEN WE LAUNCHED, WHICH WAS
NOVEMBER OF 2014, B.C. HAD HAD A
CARBON TAX IN PLACE FOR A FEW
YEARS.
QUEBEC HAD JUST INTRODUCED A CAP
AND TRADE SYSTEM.
NO OTHER PROVINCE HAD CARBON
PRICING REALLY LINED UP, AND THE
FEDERAL GOVERNMENT WAS ABSENT ON
THAT ISSUE.
AND SO WE FELT THAT THERE NEEDED
TO BE A LOT MORE DISCUSSION
AROUND THIS COUNTRY, BOTH AT THE
FEDERAL AND PROVINCIAL LEVEL.

Steve says YOU HAD A COUPLE OF
QUICK WINS, THOUGH.
YOU HAD PRESTON MANNING, THE
FOUNDER OF THE REFORM PARTY CAME
ON ENDORSING A CARBON TAX OF
SORTS.
PATRICK BROWN ALSO HAD IT IN HIS
PEOPLE'S GUARANTEE.

Chris says SO I THINK UP UNTIL ABOUT THE
MIDDLE OF 2018, I THINK WE COULD
SAY THAT THE CONSENSUS WAS
BUILDING, FOR SURE.
WE HAD A CAP AND TRADE SYSTEM
INTRODUCED, A PRETTY
WELL-DESIGNED ONE IN ONTARIO
FROM KATHLEEN WYNNE.
WE HAD A VERY WELL-DESIGNED
CARBON TAX WITH REBATES AND
COMPETITIVENESS PROTECTION
INTRODUCED IN ALBERTA.
WE HAD MANITOBA THAT HAD
DESIGNED A CLIMATE POLICY WITH
CARBON PRICING AT ITS CORE.
AND THAT WAS LAST YEAR, I
SUPPOSE.
AND THEN WE HAVE A FEDERAL
GOVERNMENT THAT SAID, ALL RIGHT,
WE'RE GOING TO NOW FILL IN THE
GAPS.
AND FOR ANY PROVINCE OR
TERRITORY THAT DOESN'T HAVE ONE,
WE WILL PUT ONE IN PLACE, BUT WE
WOULD ACTUALLY PREFER YOU TO
DESIGN YOUR OWN.

Steve says QUEBEC WAS CAP AND
TRADE AS WELL.

Chris says BUT THAT WAS TRUE WHEN WE
STARTED.
SO THAT WAS ALL NEW ACTION, AND
THAT CONSENSUS WAS BUILDING
UNTIL ABOUT THE MIDDLE OF LAST
YEAR.

Steve says WELL, WHICH BRINGS US
TO THE NUMBERS I WANT TO SHARE
WITH YOU AND OUR VIEWERS RIGHT
NOW.
IT WAS LAST NOVEMBER THAT ANGUS
REID DID A POLL SHOWING THAT
JUST OVER HALF OF RESPONDENTS
SUPPORTED THE CARBON TAX.

A slate appears on screen, with the title "A country and province divided."

Steve reads data from the slate and says
IN MAY AN IPSOS POLL HERE IN
ONTARIO SHOWED AGAIN ROUGHLY
HALF AGREED THAT CARBON TAXES
ARE AN EFFECTIVE WAY OF ALTERING
BEHAVIOUR AND COMBATTING CLIMATE
CHANGE, AND YET 72 percent AGREED WITH
THE NOTION THAT CARBON TAXES IN
ONTARIO ARE SIMPLY A TAX GRAB.
SO, WE'VE GOT SOME CONFLICTING
MESSAGES HERE.
GIVEN THE CHANGE OF GOVERNMENT
AND GIVEN, YOU KNOW, ONTARIO'S
NOW TAKING THE FEDS TO COURT
ABOUT THEIR CARBON PLAN, DO YOU
THINK YOU'RE LOSING GROUND IN
THE BATTLE FOR PUBLIC OPINION?

Chris says WELL, I THINK A COUPLE OF
THINGS.
SO I THINK, FIRST OF ALL,
RELATIVE TO THREE YEARS AGO
THERE'S JUST A LOT MORE
DISCUSSION ABOUT CARBON PRICING.
A LOT MORE DISCUSSION WITHIN
GOVERNMENTS, WITH OPPOSITION
PARTIES, ON MAIN STREET.
AND I THINK THAT'S A GOOD THING.
THIS IS A BIG POLICY CHANGE, SO
JUST LIKE WE TALKED A LOT ABOUT
DEFICIT REDUCTION IN THE 1980S
AND 1990S, WE TALKED A LOT ABOUT
FREE TRADE BEFORE WE HAD THAT.
WE TALKED A LOT ABOUT IT WHEN IT
WAS UNDER THREAT.
THIS IS A BIG POLICY CHANGE, AND
I THINK IT'S REALLY IMPORTANT
THAT CANADIANS TALK ABOUT IT.
AND I THINK REALLY WHAT'S
HAPPENED IS THAT, YOU KNOW, FOUR
YEARS AGO THAT CONSENSUS WAS
STARTING TO BUILDING.
IT THEN GOT SOME SERIOUS
MOMENTUM IN THE NEXT FEW YEARS.
IT'S TAKEN A WHILE FOR THE
OPPOSITION TO THAT POLICY TO
COALESCE.
NOW THAT OPPOSITION HAS
COALESCED, AND IT'S LOOKING LIKE
WE ARE LINING OURSELVES UP FOR A
PRETTY SERIOUS DEBATE IN THE
COMING ELECTION, INCLUDING THE
PROVINCIAL ELECTION IN ALBERTA
COMING UP IN A FEW MONTHS.

Steve says INDEED.

Chris says SO ARE WE LOSING GROUND?
WELL, I THINK NUMBER ONE IT'S
GOOD THAT WE'RE HAVING THIS
DEBATE BECAUSE THAT'S WHAT WE DO
IN DEMOCRATIC SOCIETIES, RATHER
THAN THROWING GRENADES AT EACH
OTHER.
WE THROW BARBS AT EACH OTHER.

Steve says PRESUMABLY YOU'D LOVE
THE CONSENSUS TO KEEP BUILDING.

Chris says I WOULD, BUT I'D LIKE THAT
CONSENSUS TO EMERGE AGAIN,
RE-EMERGE KIND OF AFTER THE
APPROPRIATE POLITICAL BATTLE HAS
BEEN FOUGHT AND WON.
MY SECOND COMMENT WOULD BE I
THINK THE NATURE OF THE DEBATE
ISN'T AS GOOD AS IT SHOULD BE.
I THINK ON ONE SIDE OF THE
DEBATE THERE IS... THERE IS NOT
VERY GOOD INFORMATION, MAYBE
EVEN MISINFORMATION IN SOME
CASES.
I THINK THE OTHER SIDE OF THE
DEBATE DOESN'T REALLY WANT TO
ENGAGE AND EXPLAIN.
AND YOU KNOW, CANADIANS CAN BE
FORGIVEN FOR BELIEVING A SET OF
CLAIMS IF THEY'RE NOT PRESENTED
WITH THE COUNTER-CLAIMS.
AND SO I THINK WE'VE GOT THIS
DEBATE THAT'S NOT IN GREAT
SHAPE.

Steve says WELL, ADVANCING HIS
SIDE OF THE DEBATE IN THAT CHAIR
NOT TOO LONG AGO WAS ROD
PHILLIPS, THE MINISTER OF THE
ENVIRONMENT FOR THE PROVINCE OF
ONTARIO SAID...

A quote appears on screen, under the title "Target the polluters, not the people." The quote reads "WE BELIEVE THE ONUS OF FUNDING SHOULD BE ON POLLUTERS, NOT ON HARD-WORKING PEOPLE WHO DESERVE TO BE ABLE TO USE THEIR OWN MONEY FOR THEMSELVES AND THEIR FAMILIES. REGULATING LARGE EMITTERS WITH A SYSTEM THAT IS TOUGH BUT FAIR WILL ENSURE THAT WE MEET OUR COMMITMENTS TO THE PARIS TARGETS
WHILE ENSURING THAT COSTS ARE NOT BEING DOWNLOADED TO CONSUMERS."
Quoted from Rod Phillips. December 18, 2018.

Steve says WHAT'S YOUR VIEW OF THE NEW
ONTARIO GOVERNMENT'S APPROACH?

The caption changes to "Chris Ragan. McGill University."

Chris says WELL, SO I THINK IN THAT
QUOTE WHAT I HEAR IS WHAT YOU
OFTEN HEAR FROM PEOPLE AT
DIFFERENT POINTS IN THE
POLITICAL SPECTRUM, ACTUALLY, IS
THIS... THE CREATION OF A WEDGE
BETWEEN, YOU KNOW, BIG COMPANIES
WHO ARE BAD AND THE REST OF US
WHO ARE GOOD.
AND THAT'S... THAT'S JUST WRONG.
YOU KNOW, WE ARE ALL EMITTERS.
WE HEAT OUR HOMES.
WE DRIVE TRUCKS AND CARS AND
SKIDOOS.
WE WORK AT FIRMS THAT ACTUALLY
HAVE EMISSIONS.
WE ARE ALL... WE ALL LIVE IN A
VERY ENERGY INTENSIVE AND A VERY
CARBON INTENSIVE WORLD.
WE ARE ALL EMITTERS, AND WE ALL,
IN MY VIEW, NEED TO PLAY A ROLE
IN REDUCING THOSE.
AND TO BELIEVE THAT YOU CAN PUT
POLICIES IN PLACE THAT WILL ONLY
IMPACT THOSE LARGE FINAL
EMITTERS AND THAT WILL LEAVE
CONSUMERS AND REGULAR PEOPLE
UNTOUCHED IS... I THINK THAT'S
ACTUALLY EITHER... WELL, IT'S
EITHER COMPLETELY WRONG OR IT'S
COMPLETELY DISINGENUOUS.

The caption changes to "Subscribe to The Agenda Podcast: tvo.org/theagenda."

Steve says THE COMPANY WILL PASS
THE COSTS ON ANYWAY.

The caption changes to "Made-In-Ontario approach."

Chris says OF COURSE THEY WOULD.
OF COURSE THEY WOULD.
AND I THINK ECONOMICALLY YOU
WANT A POLICY WHERE EVERYBODY
THAT IS AN EMITTER IS FACING
THOSE INCENTIVES TO REDUCE THOSE
EMISSIONS.
POLITICALLY I WOULD ARGUE, AND
I'M NO POLITICAL EXPERT, BUT
POLITICALLY I WOULD ARGUE THAT
YOU'LL GET GREATER BUY-IN IF
EVERYBODY, LARGE BUSINESS, SMALL
BUSINESS AND HOUSEHOLDS, ARE ALL
INVOLVED IN THE SAME PROJECT.

Steve says WELL, THE GOVERNMENT
OF ONTARIO, THE NEW GOVERNMENT,
Chris says IT'S GOING TO DEVELOP
PERFORMANCE STANDARDS INDUSTRY
BY INDUSTRY.
I'M WONDERING IN YOUR VIEW WHAT
THE DIFFERENCE IS BETWEEN
SETTING A PERFORMANCE STANDARD
FOR EMISSIONS FOR A PARTICULAR
INDUSTRY VERSUS CREATING A
CARBON PRICE FOR EMISSIONS WHICH
PRESUMABLY WOULD COVER ALL...

Chris says SO ONE OF THE IRONIES, WHEN
THE GOVERNMENT RELEASED A SKETCH
OF ITS PLAN, WHICH I THINK WAS
IN NOVEMBER, WAS THIS INDUSTRY
PERFORMANCE STANDARDS.
IF YOU LOOK AT WHAT WAS PROVIDED
THERE, THEY LOOK AN AWFUL LOT
LIKE THE OUTPUT-BASED PRICING
SYSTEM THAT THE FEDERAL
GOVERNMENT HAS SAID THEY WILL
INTRODUCE THAT LOOKS IN TURN AN
AWFUL LOT LIKE THE OUTPUT-BASED
PRICING SYSTEM THAT ALBERTA
INTRODUCED.
THIS APPEARS TO BE CARBON
PRICING FOR LARGE FINAL EMITTERS
WHERE THE PRICE... WHERE THEY
PAY A PRICE ON THEIR EMISSIONS
BEYOND A THRESHOLD, AND THAT
THRESHOLD IS SET INDUSTRY BY
INDUSTRY.
SO WHEN WE LOOKED AT THAT, AT
ECO-FISCAL, WE SAID, OH, THEY
HAVEN'T CALLED IT CARBON PRICING
FOR OBVIOUS REASONS BECAUSE
THEY'VE CLAIMED THAT THEY DON'T
WANT TO USE CARBON PRICING, BUT
AS FAR AS WE CAN TELL, IT LOOKS
LIKE CARBON PRICING IN, YOU
KNOW, A PARTICULAR SECTOR OF THE
ECONOMY.
IT'S NOT A BROAD-BASED CARBON
PRICE, AND FOR THAT REASON I
THINK WE WOULD BE CRITICAL
BECAUSE WHAT YOU REALLY WANT, IN
MY VIEW, IS TO HAVE A
BROAD-BASED CARBON PRICE,
MEANING BROAD ACROSS ALL
SEGMENTS OF THE ECONOMY SO THAT
EVERYBODY IS FACING THOSE
INCENTIVES TO REDUCE.
BUT I THINK WHAT THEY HAVE GOT
LINED UP, AND MAYBE WE'LL HAVE
TO WAIT UNTIL THE NEXT SET OF
DETAILS, BUT WHAT IT LOOKS LIKE
IS CARBON PRICING.

Steve says IN WHICH CASE YOU'RE
OKAY WITH IT.

Chris says I'M OKAY WITH THAT PART OF
THEIR PLAN.
OTHER PARTS OF THEIR PLAN, NOT
SO MUCH.

Steve says WELL, PREMIER DOUG
FORD HAS SAID THAT CARBON
PRICING IN HIS VIEW, QUOTE
UNQUOTE, DOES NOT WORK.
AND MARCHA CARD WROTE A BOOK
ABOUT CLIMATE CHANGE NOT TOO
LONG AGO.
CLIMATE CHANGE ECONOMIST SAYS CARBON PRICING IS DOING LITTLE
TO DECARBONIZE THE ECONOMY.
AND ACCORDING TO HIS DATA...

A slate appears on screen, with the title "Carbon pricing is doing little to decarbonize the economy."

Steve reads data from the slate and says THE FEDERAL CARBON TAX WILL
CONTRIBUTE ONLY 15 percent TO OTTAWA'S
PLANNED EMISSION REDUCTIONS.
ALBERTA'S CARBON TAX WILL
CONTRIBUTE ABOUT 5 percent TO ITS
PLANNED REDUCTIONS.
B.C.'S CLIMATE PLAN IS A MIX OF
THE CARBON TAX AND REGULATIONS,
ONE SINGLE REGULATION IN B.C.
THAT FORCED BC HYDRO TO CANCEL
PLANNED COAL AND NATURAL GAS
PLANTS AND DEVELOP LOW-CARBON
OPTIONS WAS APPARENTLY THREE
TIMES MORE EFFECTIVE THAN B.C.'S
CARBON TAX AT REDUCING
EMISSIONS.
SO AGAIN, THE QUESTION BECOMES:
IS CARBON PRICING REALLY A
NECESSARY TOOL TO FIGHT CLIMATE
CHANGE?

Chris says RIGHT.
SO LET'S END WITH YOUR FINAL
QUESTION.
IS IT NECESSARY?
NO.
YOU CAN USE OTHER WAYS TO REDUCE
GREENHOUSE GAS EMISSIONS.
ECO-FISCAL AND EVERY ECONOMIST I
KNOW SAYS YOU DON'T HAVE TO USE
CARBON PRICING, SO WHY WOULD YOU
USE CARBON PRICING?
YOU USE CARBON PRICING BECAUSE
IT IS THE LOWEST COST WAY TO DO
IT.
SO WHAT CREATED ECO-FISCAL IN
THE FIRST PLACE WAS THE IDEA NOT
JUST THAT WE SHOULD HAVE BETTER
ENVIRONMENTAL POLICIES BUT WE
SHOULD HAVE BETTER ENVIRONMENTAL
POLICIES THAT ARE ALSO GOOD FOR
THE ECONOMY, AND THAT YOU CAN
ACTUALLY HAVE A HEALTHY
ENVIRONMENT AND A PROSPEROUS
ECONOMY IF YOU DO IT RIGHT.
IT'S NOT AUTOMATIC.
YOU'VE GOT TO DO IT RIGHT, AND
DOING IT RIGHT MEANS USING THE
LOWEST-COST POLICIES YOU CAN,
AND THOSE TYPICALLY MEAN PUTTING
A PRICE ON POLLUTION.
SO I WOULD ARGUE THAT CARBON
PRICING DOES WORK.
I THINK THE EVIDENCE, WHETHER
IT'S FROM BRITISH COLUMBIA OR
THE U.K. OR OTHER COUNTRIES THAT
HAVE INTRODUCED THESE,
INCLUDING... OR THE STATE OF
CALIFORNIA, CARBON PRICING DOES
REDUCE EMISSIONS.
NOW IF THE CLAIM IS THAT THE
PLAN THAT'S PUT IN PLACE OR
PLANNED TO BE PUT IN PLACE BY
THE FEDERAL GOVERNMENT IS NOT
GOING TO DO ENOUGH, I WOULD
AGREE.
AND I WOULD SAY, WELL, A LOW
CARBON PRICE DOESN'T GET YOU
WHERE YOU WANT TO BE.
IF YOU WANT TO ACHIEVE THE 2030
EMISSIONS REDUCTIONS TARGETS,
AND IF YOU DO IT WITH A CARBON
PRICE MOSTLY, THEN YOU'RE GOING
TO DO IT WITH A CARBON PRICE
THAT'S HIGHER THAN 20 dollars A TONNE.
YOU MIGHT END UP WITH A CARBON
PRICE THAT'S 125 dollars A TONNE.
THERE'S SOME DISAGREEMENT HERE.
BUT IF YOU'RE ONLY GOING TO HAVE
A CARBON PRICE OF 20 OR 30 OR
40 dollars A TONNE.
THEN YOU'RE GOING TO NEED OTHER
POLICIES TO ACHIEVE THOSE
TARGETED REDUCTIONS, AND THOSE
OTHER POLICIES ARE GOING TO BE
MORE EXPENSIVE.
AND MARK JACCARD AGREES THAT
OTHER POLICIES ARE INDEED MORE
EXPENSIVE THAN A CARBON PRICE.
HE JUST THINKS THEY ARE
POLITICALLY MORE PALATABLE.

Steve says I WAS GOING TO SAY
THIS IS WHERE WE GET INTO THE
ISSUE OF POLITICS.
I KNOW THE CURRENT MEMBER FOR
OTTAWA CENTRE WHEN HE WAS
RUNNING FOR OFFICE USED ABOUT A
CARBON TAX THAT WAS AROUND WHAT
YOU WERE TALKING ABOUT, ABOUT
100 dollars, 150 dollars A TONNE.
AND I TELL YOU THE PREMIER'S
BEEN BEATING HIM LIKE A DRUM
EVER SINCE THEN, EVER SINCE HE
SAID THAT.
IF POLITICS IS THE ART OF THE
POSSIBLE, THIS SEEMS A LITTLE
IMPOSSIBLE AT THE MOMENT, WOULD
YOU AGREE?

Chris says MAYBE WE FRAMED IT WRONG.
SO IF PEOPLE... IF PEOPLE SAY TO
ME, WELL, WE CAN'T HAVE A CARBON
TAX AS HIGH AS 125 dollars A TONNE, I
WOULD SAY WELL WHY CAN'T WE HAVE
INCOME TAXES THAT LOW?

Steve says NO ONE'S SAYING THAT.
MAYBE YOU SHOULD BE.

The caption changes to "Chris Ragan, @ctsragan."

Chris says BUT WE SHOULD.
BECAUSE WE NEED TO TALK ABOUT
THAT SECOND HALF OF THE POLICY.
SO IF WE'RE GOING TO HAVE A
CARBON TAX OF 75 OR 125 OR EVEN
200 dollars A TONNE, WHICH BY THE WAY
DOESN'T PUT GAS UP MUCH BEYOND
WHERE IT WAS IN THE SUMMER OF
2014, BUT LET'S SUPPOSE WE HAVE
A CARBON PRICE AT 150 dollars A TONNE,
AND WE USE THE REVENUES AND WE
RETURN 100 percent OR EVEN ONLY 90 percent OF
THOSE REVENUES BACK TO EITHER
BUSINESSES IN TERMS OF TAX CUTS
OR INDIVIDUALS IN TERMS OF
PERSONAL INCOME TAX CUTS OR
CHEQUES IN THE MAIL TO
LOW-INCOME HOUSEHOLDS OR SOME
COMBINATION OF ALL OF THOSE, WE
COULD ACTUALLY THEN SEND ALL OF
THOSE INCENTIVES THROUGH THE
PRICE SYSTEM TO REDUCE
EMISSIONS, BUT AT THE SAME TIME
WE'RE NOT MAKING PEOPLE POORER.
WE'RE NOT MAKING BUSINESSES
POORER, AND YOU'RE NOT SCALING
UP THE SIZE OF GOVERNMENT.

The caption changes to "Connect with us: Twitter: @theagenda; Facebook, agendaconnect@tvo.org, Instagram."

Steve says I HEAR WHAT YOU'RE
SAYING, BUT IT MAY BE THAT THE
REALITY OF TRYING TO GET THAT
MESSAGE OUT IN POLITICS TODAY IS
THAT THE PUBLIC ONLY HEAR THE
FIRST PART AND THEY JUST DON'T
HEAR THE SECOND PART, OR IF THEY
HEAR IT THEY DON'T BELIEVE IT.
AND WE KNOW THE FEDERAL
GOVERNMENT HAS TALKED ABOUT
REBATES, RIGHT?
BRINGING MONEY IN ON THE CARBON
TAX AND REBATING IT AS WELL.
FOR SOME REASON THAT ISN'T
CATCHING ON.

Chris says WELL, SO, TWO THINGS.
I DO THINK THAT THESE
CONVERSATIONS, THESE POLICIES
ARE COMPLEX, AND I THINK THEY
NEED TO BE EXPLAINED.
THE GOVERNMENT HAS INTRODUCED A
POLICY... THE FEDERAL GOVERNMENT
HAS INTRODUCED WHAT THEIR
REBATES WILL LOOK LIKE, BUT I
HAVEN'T HEARD THEM ACTUALLY
EXPLAIN THEM VERY MUCH.
AND ONE OF MY CRITICISMS WOULD
BE ON THE FEDERAL GOVERNMENT
WHETHER IT'S THE MINISTER OF THE
ENVIRONMENT OR THE PRIME
MINISTER, I ACTUALLY DON'T THINK
THEY'VE DONE A VERY GOOD JOB IN
EXPLAINING WHY A CARBON PRICE IS
A BETTER WAY TO DO THIS THAN THE
ALTERNATIVES.
AND HOW A CARBON PRICE WILL
WORK.

Steve says TAKE A SHOT AT IT
RIGHT NOW.

Chris says WHICH WOULD YOU LIKE ME TO EXPLAIN?

The caption changes to "The great rebate!"

Steve says I'D LIKE YOU TO
EXPLAIN THE TWO SIDES OF THIS
COIN, WHICH IS, YES, THERE'S A
FEDERALLY IMPOSED CARBON TAX,
BUT THERE WILL BE REBATES FOR
CANADIANS AS WELL.

Chris says SO THE LOGIC OF A CARBON
PRICE ISN'T ABOUT TRYING TO GET
YOU TO REDUCE EMISSIONS BECAUSE
YOU'RE POORER.
THAT'S NOT THE LOGIC.
THE LOGIC IS WE'RE GOING TO PUT
A CARBON PRICE IN PLACE.
THE CARBON INTENSIVE THINGS IN
YOUR LIFE ARE GOING TO BECOME
MORE EXPENSIVE, SO THINK ABOUT
GASOLINE OR HEATING OIL.
THEY WILL BECOME MORE EXPENSIVE.
YOU WILL THEN CHANGE THE WAY YOU
DO THINGS, WHETHER YOU ARE A
HOUSEHOLD OR A SMALL BUSINESS OR
A LARGE BUSINESS, YOU WILL, OVER
TIME, MOVE AWAY FROM CARBON AND
YOU WILL DO WHATEVER YOU'RE
DOING IN LOWER CARBON WAYS.
AND THAT'S SORT OF SUBSTITUTION
THAT TAKES PLACE IS A KEY PART
OF WHAT WE DO, AND WE ACTUALLY
DO THIS EVERY DAY IN OUR LIFE.
YOU GO INTO THE GROCERY STORE,
YOU SEE THAT BEEF IS EXPENSIVE,
BUT FISH IS CHEAP, AND SO YOU
SUBSTITUTE.
OR YOU GO FROM, YOU KNOW, GREEN
VEGETABLES TO ORANGE VEGETABLES
ON A DAILY BASIS.
WELL, BUSINESSES DO THAT,
HOUSEHOLDS DO THAT OVER TIME.
THAT'S THE FIRST PART.
THE SECOND PART IS, WELL,
REMEMBER, WE'RE NOT TRYING TO
MAKE YOU POORER.
WE'RE JUST TRYING TO GET YOU TO
CHANGE YOUR BEHAVIOUR.
SO WE'RE GOING TO TAKE A BIG
CHUNK OF THAT REVENUE, MAYBE
EVEN ALL OF THAT REVENUE, AND
WE'RE GOING TO GIVE IT BACK TO
YOU.
WE COULD GIVE IT BACK TO YOU AS
EQUAL PER CAPITA CHEQUES IN THE
MAIL, WHICH IS BASICALLY WHAT
THEY'RE DOING IN ALBERTA.
WE COULD DO IT THROUGH TAX
RE-BATES, BUT WHEN YOU GET THAT
CHEQUE IN THE MAIL OR THE TAX
REBATE, YOU CAN SPEND IT ON
ANYTHING YOU WANT.

Steve says FOLLOW-UP QUESTION.
IF YOU'RE TAKING WITH THIS HAND
AND GIVING BACK WITH THIS HAND
AND IT'S A WASH AT THE END OF
THE DAY, WHY WOULD I CHANGE MY
BEHAVIOUR?

Chris says GREAT QUESTION, BECAUSE IT'S
NOT A WASH AT THE END OF THE DAY
IN TERMS OF WHAT YOU DO.
IT'S A WASH IN TERMS OF YOUR
PURCHASING POWER.
THE WHOLE LOGIC IS TO MAINTAIN
YOUR PURCHASING POWER BUT,
BECAUSE GASOLINE AND OTHER
CARBON-INTENSIVE THINGS ARE NOW
MORE EXPENSIVE, YOU DO THINGS
DIFFERENTLY.
AND THAT IS THE KEY POINT THAT I
THINK IS HARD FOR PEOPLE TO GET
THEIR HEAD AROUND, WHICH IS...
AND THE IRONY IS WE DO IT EVERY
DAY IN OUR LIFE.
BUT PEOPLE SAY, WELL, THERE ARE
NO ALTERNATIVES.
I'M GOING TO KEEP DRIVING.
WELL, YOU MIGHT KEEP DRIVING BUT
WITH A MORE FUEL EFFICIENT
VEHICLE OVER TIME.
YOU MIGHT ACTUALLY START
CHANGING THE WAY YOU DRIVE.
YOU MIGHT START CHANGING THE WAY
YOU TAKE VACATIONS.
AND ANOTHER POINT HERE IS THAT
WE'RE ALL GOING TO RESPOND
DIFFERENTLY.
IF YOU'RE DESIGNING A SET OF
REGULATIONS SECTOR BY SECTOR,
INCLUDING FOR THE HOUSEHOLD
SECTOR, YOU'RE GOING TO HAVE THE
GOVERNMENT LOOKING OVER YOUR
SHOULDER, TELLING YOU HOW TO DO
WHAT YOU'RE DOING, WHEN TO DO
IT, WHAT TECHNOLOGY TO USE.
VERY INFLEXIBLE FOR THE MOST
PART.
A CARBON PRICE SAYS, YOU KNOW
WHAT, WE'RE GOING TO PUT A
CARBON PRICE IN PLACE.
THOSE CARBON-INTENSIVE THINGS
ARE GOING TO GET MORE EXPENSIVE.
YOU FIGURE OUT HOW TO DO IT.
YOU MIGHT TURN DOWN THE HEAT IN
YOUR HOUSE.
SOMEBODY ELSE WILL BUY A MORE
FUEL EFFICIENT VEHICLE.
SOMEBODY ELSE TAKES DIFFERENT
VACATIONS.
ON THE PRODUCTION SIDE, PEOPLE
ARE GOING TO MAKE DIFFERENT
DECISIONS ABOUT HOW THEY CHANGE
THE WAY THEY PRODUCE STEEL OR
PRODUCE CEMENT OR TRANSPORT
STUFF ACROSS RAILS.

Steve says BUT IT'S THEIR CHOICE.

Chris says IT'S THEIR CHOICE, AND THAT
FLEXIBILITY IS THE KEY FOR WHY
CARBON PRICE IS THE LOWEST COST
WAY, BEST FOR THE ECONOMY TO
REDUCE EMISSIONS.

Steve says ONE MORE THING HERE.
THIS IS A QUOTE FROM A PIECE
CALLED "THE LEFT'S CASE AGAINST
THE CARBON TAX."
AND IT WAS PUBLISHED IN A
MAGAZINE CALLED BRIER PATCH THIS MONTH.
SHELDON, IF YOU WOULD, THANKS.

A quote appears on screen. The quote reads "WE KNOW THAT STATES HAVE ENORMOUS POWER TO IMPLEMENT CLIMATE POLICIES THAT COULD RADICALLY REDUCE EMISSIONS, CREATE JOBS AND IMPROVE PUBLIC SERVICES, AND NONE OF THEM INCLUDES PUTTING A PRICE ON CARBON AS A PRIMARY MEASURE.
HERE ARE JUST A FEW OF THE OPTIONS. PHASE OUT OIL, GAS AND COAL EXTRACTION. STOP SUBSIDIZING FOSSIL FUELS. BUILD LOW-CARBON ENERGY. INITIATE MASSIVE PUBLIC WORKS PROJECTS LIKE A GREEN HOUSING PROGRAM. CONSTRUCT ENERGY-EFFICIENT
SOCIAL HOUSING FOR LOW-INCOME RESIDENTS. AND RETROFIT EXISTING BUILDINGS WITH ELECTRIC HEAT PUMPS, EFFICIENT APPLIANCES AND ADDED INSULATION. EMPLOY PEOPLE TO CLEAN UP ABANDONED WELLS, TAILING LAKES AND MINING WASTE. WORK WITH FARMERS TO REDUCE AGRICULTURAL EMISSIONS."
Quoted from James Will, Briarpatch Magazine. January-February 2019.

Steve says I GUESS IT'S THEIR VIEW THAT SO
MUCH OF THE OXYGEN IN THE AIR IS
BEING SUCKED UP BY THIS CARBON
TAX DEBATE THAT WE'RE IGNORING
SOME OF THESE EQUALLY VIABLE
MAYBE EVEN EASIER TO ACHIEVE
OPTIONS.
WHAT'S YOUR TAKE?

The caption changes to "A red herring?"

Chris says YEAH, I DON'T THINK THEY'RE EASIER TO ACHIEVE.
WHEN I READ THAT PARAGRAPH THIS
MORNING ON THE PLANE RIDE IN,
YOU KNOW, AND I THOUGHT IT WAS
BREATHTAKING IN HOW EASY IT ALL
SOUNDED.
WE'LL JUST DO ALL OF THESE
THINGS.
WELL, NUMBER ONE, MOST OF THOSE
POLICIES ARE EXTREMELY DIFFICULT
TO DESIGN BECAUSE YOU'VE GOT
GOVERNMENT DESIGNING THE WAY
THAT YOU WANT THE PRIVATE SECTOR
TO CHANGE.
SO THEY ARE DIFFICULT TO DO.
NUMBER TWO, THEY MAY BE
EXTREMELY EXPENSIVE POLICIES TO
ACTUALLY IMPLEMENT.
SO THE ECO-FISCAL WROTE A REPORT
CALLED SUPPORTING CARBON PRICING
WHICH WAS ALL ABOUT POLICIES
THAT AREN'T A CARBON PRICE BUT
CAN BE USED TO SUPPORT AND
ENHANCE A CARBON PRICE.
AND YOU CAN'T JUST USE ANYTHING.
SOME OF THESE POLICIES DON'T
WORK VERY WELL.
SOME OF THEM UNDERMINE CARBON
PRICING.
SOME OF THEM ARE VERY EXPENSIVE.
FOR EXAMPLE, IF YOU WANT TO
SUBSIDIZE ELECTRIC VEHICLES,
WELL, IN QUEBEC THE EV
SUBSIDIES, YES THEY REDUCE
EMISSIONS AT THE PRICE OF 400 dollars PER TONNE.
SO WHEN YOU'VE GOT A CAP AND
TRADE SYSTEM THAT'S REDUCING
EMISSIONS AT 21 dollars A TONNE AND
YOU'RE GOING TO SUBSIDIZE EVS
FOR 400 dollars A TONNE, YOU'VE GOT TO
WONDER ABOUT WHETHER THAT'S A
GOOD EXPENDITURE OF PUBLIC
FUNDS.
SO YOU GO THROUGH THESE POLICIES
AND, YOU KNOW, YOU WANT TO THINK
ABOUT WHICH ONES ARE EXPENSIVE
AND WHICH ONES AREN'T AND ONLY
DO THE CHEAP ONES.

The caption changes to "Watch us anytime: tvo.org, Twitter: @theagenda, Facebook Live."

Steve says WHAT ABOUT SUBSIDIZES
FOSSIL FUELS WHICH WE DO TO THE
TUNE OF MORE THAN 1 BILLION dollars A
YEAR.
THE FEDERAL GOVERNMENT COULD
SNAP ITS FINGERS AND ELIMINATE A
BUNCH OF THOSE.

Chris says IN 2009 AND 10 I SOMEHOW GOT
ASSIGNED TO BE AND LABELLED AS
CANADA'S EXPERT ON THE FOSSIL
FUEL SUBSIDY ISSUE FOR THE G20
DISCUSSIONS BECAUSE THE G20
COUNTRIES HAD MADE A COMMITMENT
TO REDUCE FOSSIL FUEL SUBSIDIES.
AND ONE OF THE THINGS THAT I
LEARNED AT FINANCE CANADA IS
THAT IN FACT WE AS A COUNTRY DO
NOT HAVE EXPLICIT FOSSIL FUEL
SUBSIDIES.
WHAT WE DID HAVE WERE A SET OF
TAX PREFERENCES, AND MOST OF
THEM, BY THE TIME I CAME ALONG
IN 2009, HAD BEEN ELIMINATED.
SO I QUESTION THE 1 BILLION dollar NUMBER.

Steve says HMM.

Chris says I THINK IT'S WRONG.

Steve says YOU DON'T THINK IT'S
THERE?

Chris says CORRECT.
I'M NOT SAYING IT'S ZERO.
I'M SAYING IT'S MUCH SMALLER
THAN IT USED TO BE AND MUCH
SMALLER THAN MOST OTHER
COUNTRIES' IS.

Steve says LET'S TRY THIS.
THE DALTON MCGUINTY GOVERNMENT
OVER THE COURSE OF ITS TIME IN
OFFICE, WHICH WAS ABOUT 10
YEARS, SHUT DOWN ALL THE
COAL-FIRED GENERATING STATIONS
IN THIS PROVINCE.
NOT EASY TO DO, TO BE SURE.
BUT A MASSIVE REDUCTION IN
GREENHOUSE GAS EMISSIONS AS A
RESULT OF THAT ONE POLICY
DECISION.
CAN A CARBON TAX HAVE THE SAME
KIND OF DRAMATIC IMPACT THAT
THAT ONE DECISION DID?

Chris says YES.
DEPENDING ON WHAT THE SIZE OF
THE CARBON TAX IS.
SO ALBERTA... IT'S INTERESTING.
ALBERTA HAS A SCHEDULED INCREASE
IN THE CARBON PRICE, AND THEY
ALSO HAVE A SCHEDULED PHASE-OUT
OF THEIR COAL-FIRED ELECTRICITY
PLANTS.
AND SO THE QUESTION IS: WELL,
HOW MUCH OF THAT PHASE-OUT WOULD
HAVE HAPPENED ANYWAY WITH THE
RISING CARBON PRICE?
DID YOU REALLY NEED THE
REGULATIONS TO DO IT?
AND THE ANSWER IS YOU GOT MOST
OF THE PHASE-OUT THAT'S
SCHEDULED TO HAPPEN, YOU GOT
MOST OF IT WITH THE CARBON
PRICE.
A CARBON PRICE, IF APPLIED TO
COAL-FIRED ELECTRICITY, IF YOU
APPLIED THE CARBON PRICE THERE,
THEN THAT INCREASES THE COST OF
THAT PRODUCTION.
IT THEN HAS TO COMPETE WITH
LOW-CARBON ELECTRICITY, AND OVER
TIME YOU'RE GOING TO PHASE IT
OUT.
NOW ONTARIO PHASED IT OUT AND
PHASED IT OUT QUICKLY.
ONE OF THE REASONS THAT IT WAS
ABLE TO DO THAT IS THAT ONTARIO
AND THE REST OF THE COUNTRY WENT
THROUGH A PRETTY SERIOUS
RECESSION IN 2009.

Steve says WHICH QUOTE UNQUOTE
HELPED.

Chris says WELL . . . IT HELPED REDUCE
OUR DEMAND FOR ELECTRICITY AND
REACH OUR EMISSIONS.
THAT'S WHAT I LIKE TO CALL THE
EAST GERMANY WAY OF REDUCING
EMISSIONS.
NOT A GREAT WAY.

Steve says NOT A GOOD IDEA, YEAH.
LET'S IN OUR REMAINING FEW
MOMENTS HERE COME FULL CIRCLE
HERE.
WE TALKED AT THE BEGINNING ABOUT
THE MESSAGE THAT YOUR SIDE IS
TRYING TO ADVANCE.
AND YOU REMEMBER THE COVER OF
MACLEAN'S MAGAZINE WITH THOSE
FIVE GUYS ON THE COVER, THE
RESISTANCE.

Chris says HOW COULD I FORGET?

Steve says JASON KENNEY, WHO
KNOWS HE MIGHT BE THE NEXT
PREMIER OF ALBERTA.
WE KNOW DOUG FORD IS AGAINST IT.
SCOTT MO IN ALBERTA, BRIAN
PALLISTER IN MANITOBA.
YOU KNOW, I DON'T KNOW HOW THE
NEXT FEDERAL ELECTION'S GOING TO
GO, BUT IN ANDREW SCHEER BECOMES
THE NEXT PRIME MINISTER, YOU CAN
BET THAT THIS CARBON TAX THAT
THE CURRENT GOVERNMENT HAS TRIED
TO BRING IN WILL DISAPPEAR AS
WELL.
I WONDER HOW BADLY YOU'RE
SLEEPING AT NIGHT NOW, WATCHING
THE POLITICAL TIDES SEEMINGLY,
YOU KNOW, GOING PRETTY STRONGLY
AGAINST YOUR SIDE OF THIS
ARGUMENT RIGHT SNOW.

Chris says FIRST OF ALL, I SLEEP VERY WELL.

Steve says I'M GLAD TO HEAR THAT.

Chris says SO THE RESISTANCE, THOSE FIVE
INDIVIDUALS ARE CLEARLY AGAINST
CARBON PRICING.
BUT IT DOES LEAD YOU TO WONDER
WHAT THEY'RE FOR.
BECAUSE WHAT I DON'T HEAR FROM
THE FIVE OF THEM, FOR THE MOST
PART, IS THAT THEY THINK CLIMATE
CHANGE IS SERIOUS, THAT THEY ARE
WORRIED ABOUT THE COSTS THAT ARE
BEING IMPOSED TODAY, AND THEY'RE
NOT PUTTING AN ALTERNATIVE IN
THAT POLICY WINDOW.

Chris says SCHEER SAYS IT'S COMING.

Steve says HE SAYS THE
ALTERNATIVE APPROACH WILL COME
DURING THE CAMPAIGN.

The caption changes to "Defeating the anti-tax message."

Chris says SO WE'LL SEE.
BUT IT'S EASY TO THROW GRENADES
AT ANY POLICY.
NO POLICY IS PERFECT.
YOU KNOW, AND A CARBON PRICE
THAT GETS INTRODUCED, I DON'T
THINK ANY CARBON PRICE IS
PERFECT.
I DON'T THINK THE FEDERAL PLAN
IS PERFECT, AND I THINK ALL OF
THESE POLICIES WILL GET BETTER
OVER TIME, LIKE MOST OF OUR
POLICIES DO.
THEY IMPROVE OVER TIME BECAUSE
WE FIND GLITCHES.
BUT IT'S ALSO EASY RHETORICALLY
TO COMPLAIN ABOUT A TAX, RIGHT?
WHO REALLY LIKES TAXES?
WELL, BUT CLIMATE CHANGE IS
COSTLY TODAY.
AND IF WE DON'T ACT TODAY IN A
SERIOUS WAY, THEN IT'S GONNA GET
WORSE AND WORSE AND WORSE.
AND SO I NOW HAVE AN EMPTY NEST.
MY CHILDREN WILL SOON START
HAVING CHILDREN.
AND YOU START TO THINK ABOUT
THOSE FUTURE GENERATIONS.
SO IF WE DON'T ACT TODAY, THEN
WE'RE GOING TO HAVE TO AT SOME
POINT WAKE UP AND ACT WAY MORE
IN THE FUTURE.
SO LET'S ACT NOW.
LET'S BE RESPONSIBLE ABOUT IT
TODAY, BUT ALSO LET'S BE
RESPONSIBLE IN TERMS OF
DESIGNING A POLICY THAT IS THE
BEST POSSIBLE POLICY FOR THE
ECONOMY.
SO IF THEY DON'T LIKE CARBON
PRICING, I GET IT.
BUT GIVE US THEIR ALTERNATIVE.
AND I BETCHA THAT THEIR
ALTERNATIVE, BECAUSE APPARENTLY
IT WON'T BE BASED ON CARBON
PRICING, IT'S GOING TO BE HIGHER
COST.
IT'S GOING TO BE WORSE FOR THE
ECONOMY, WORSE FOR ECONOMIC
GROWTH, WORSE FOR JOBS, WORSE
FOR WAGES.
SO WHY IS THAT BETTER?

Steve says DO YOU THINK THIS IS
WHAT THE NEXT FEDERAL ELECTION
IS GOING TO BE FOUGHT ON?

Chris says I THINK IT WILL PROBABLY BE ONE OF THREE THINGS, AND DON'T
ASK ME WHAT THE OTHER TWO ARE.

Steve says WELL, IMMIGRATION IS
PROBABLY ONE OF THEM.
WE CAN THROW SOME CHIPS ON THE
TABLE FOR WHAT THE LAST ONE WILL
BE. HAVE YOU HAD A CHANCE TO MEET YET WITH THE ONTARIO
MINISTER OF THE ENVIRONMENT
OR ANYBODY WITH THE ONTARIO
GOVERNMENT TO TRY TO INFLUENCE WHAT KINDS OF MORE DEMANDING
MEASURES THEY SAY THEY'RE ABOUT TO BRING IN?

The caption changes to "tvo.org/theagenda; agendaconnect@tvo.org."

Chris says I HAVE NOT. BUT ECOFISCAL IS NOW
WORKING ON... DID YOU KNOW THAT
ECOFISCAL IS GOING TO END AT THE END OF 2019? WE WERE SCHEDULED
TO END AT THE END OF 2019 AND WE ARE ON SCHEDULE. SO WE ARE
COMING OUT WITH OUR SECOND FINAL
REPORT IN SOMETHING LIKE APRIL
AND BEFORE THAT REPORT, THE REPORT IS ALL ABOUT... IT
MAY AS WELL BE TITLED... IF NOT CARBON PRICING THEN WHAT?
IT'S BASICALLY AN EXERCISE THAT
COMPARES CARBON PRICING WITH
OTHER REALISTIC APPROACHES. AND WE WILL BE DISCUSSING WITH
MANY PEOPLE BEHIND THE SCENES BEFORE THAT REPORT COMES OUT
ABOUT THE RESULTS IN THERE AND
HOW THOSE RESULTS CAN BE USED
TO INFORM POLICY CHOICES.

Steve says WE'LL SEE YOU BACK HERE IN FOUR YEARS?

The caption changes to "Producer: Eric Bombicino, @ebombicino."

Chris says HOPEFULLY SOONER.

Steve says THAT'S CHRIS RAGAN, THE DIRECTOR
OF MCGILL UNIVERSITY'S MAX BELL
SCHOOL OF PUBLIC POLICY AND OF
COURSE CHAIR OF CANADA'S
ECOFISCAL COMMISSION.
THANKS, CHRIS.

Chris says THANK YOU.

Watch: Losing Ground on Carbon Pricing