Mark Carney should axe the emissions cap

So much for “western alienation.” If the current polling holds, and it has for the entire campaign so far, Mark Carney is on track to win more seats in Alberta and Saskatchewan than any Liberal leader since Pierre Trudeau in 1968. But if he really wants to put a lid on that stew of grievance and anger, and put a stop to the politicians who keep salting it, he should eliminate the oil and gas emissions cap as one of his first acts as a re-elected prime minister. 

This wouldn’t be an act of surrender or concession, and it certainly wouldn’t be about lowering his government’s ambitions on climate change. Instead, it would be about shifting the fight onto more favourable political and policy grounds where his government could better defend its position. Carney has already talked at length about his belief in the importance of the industrial carbon tax and the need to strengthen it. And when it comes to climate policy, there might not be safer political ground than a tax on large industrial polluters. 

Eliminating the emissions cap while simultaneously improving the industrial carbon price — perhaps by returning to industry-wide benchmarking, as was the case under the Alberta NDP government’s so-called “Carbon Competitiveness Incentive Regulation” — would place the oil and gas industry and other large emitters in the awkward position of arguing against a system they’ve mostly supported to date, should they choose to oppose it. It would force them to argue in favour of being allowed to pollute more freely, which pretty clearly runs at odds with their claims about being a clean and ethical source of energy. 

It would also represent a more economically sound approach to climate change, which ought to appeal to someone like Carney. “If oil and gas producers face a much higher carbon price than firms in other industrial sectors,” former Ecofiscal Commission chair Christopher Ragan wrote recently, “this will force higher-cost emissions reductions in that sector when lower-cost reductions will go unexploited elsewhere. Total costs for the economy will therefore be higher than what is necessary to achieve the same emissions reductions.”

And yes, there would be some obvious national unity implications here as well. As University of Alberta economics professor Andrew Leach told a parliamentary committee in 2022, “greenhouse gas emissions do not affect the climate (or Canada’s national inventory) differently if they come from the oilsands or from the manufacture of cement any more than they have different effects if they come from New Brunswick instead of from Alberta. Our policies should strive to treat emissions similarly as well, across provinces and across sectors.” 

Rather than singling Alberta out for special treatment with a sector-specific cap, the federal government would be applying the same carbon price to all industries in every part of the country. That, in turn, would make it far more difficult for politicians like Danielle Smith and Scott Moe to filibuster and fear monger about federal climate policy. This isn’t to suggest that they wouldn’t still try, of course. But part of Carney’s job as prime minister is to make those divisive efforts as difficult as humanly possible. 

If this is such a good idea, you might be asking, then why hasn’t Carney done it already? In a word: politics. He won’t say any of this during the campaign because it would create an opening for the Bloc Quebecois, one that could help it get off the mat and deny Carney’s Liberals the majority they clearly want. It would also risk giving life to a moribund NDP campaign whose collapse has directly and disproportionately benefited the Liberals. Carney might be new to politics, but he’s not that new. 

Speaking of politics, Smith would surely spin this publicly as a win, a triumphant validation of her leadership and advocacy. In private, though, she would know that Carney had dealt her the same sort of defeat that he handed Poilievre when he axed the consumer carbon tax. Rather than being able to attack the emissions cap, one her government and its allies have already undermined with dubious studies, gerrymandered reports and misinformation about its purpose, she would instead have to go after an industrial carbon price that she has championed repeatedly. She would have to pretend the federal government still doesn’t care about Alberta, even after it removed one of the biggest supposed impediments to its success. 

Worst of all, perhaps, she might have to share the stage with Carney at the ribbon cutting for one of the carbon capture and storage projects she has talked up so incessantly in the past — one that would have been delivered by a Liberal prime minister, no less. That image alone should be incentive enough for Carney to axe the emissions cap.