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Stephen Harper is, without question, one of his generation’s sharpest political minds. But even he couldn’t have foreseen the Parliamentary Budget Officer role he created as part of his 2006 Federal Accountability Act would play a leading role in undermining support for climate policy in Canada in 2023. After all, its stated mission revolved around "ensuring budget transparency and promoting informed public dialogue with an aim to implement sound economic and fiscal policies in Canada.”

But after two consecutive reports on climate policy that seem determined to ignore the actual choices we’re facing, some people are starting to wonder if it’s trying to influence that dialogue rather than inform it.

The PBO’s latest report covers the economic impact of the federal government’s clean fuel standard, which requires producers of gasoline and diesel to reduce the carbon intensity of their fuels and is part of the federal government’s approach to meeting its climate targets. According to the PBO’s analysis, it could add as much as 17 cents per litre to the price of these fuels by 2030, and cost anywhere from $231 per year for lower-income households to $1,008 for those in higher-income brackets. Conservative politicians and pundits have taken to calling this “Trudeau’s second carbon tax,” and they’ve already weaponized the PBO’s analysis in order to attack the fuel standard.

That doesn’t sit well with Jason Dion, the Canadian Climate Institute’s senior director of research. In a tweet thread, he noted: “[The] PBO compares the costs to a scenario that does not exist: where Canada does nothing about climate change and faces no trade or competitiveness consequences for doing so. It uses the highest possible costs from the Regulatory Impact Analysis Statement, and rather than saying costs ‘could’ be that high, says that they ‘will’. And it doesn’t consider the benefits that may flow from the policy.”

If this sounds familiar, that’s because it should.

Back in March, the PBO released its updated analysis of the distributional impacts of the carbon tax and rebate, which also traded in the idea it’s all cost with no economic benefit. As Dale Beugin, the CCI’s executive vice-president, noted in his own thread at the time, “[The new] PBO report misses the point. It shows the costs of carbon pricing relative to a scenario that simply does not exist: a world where Canada does nothing about climate change, and faces no consequences for doing so.”

There’s value in creating a worst-case scenario, but only if it’s correctly labelled and identified as such. That’s clearly not the case here. And what makes the PBO’s stance here even stranger is the fact that it has, in the recent past, accounted for the cost of climate change. As Parliamentary Budget Officer Yves Giroux noted in announcing the release of a November 2022 report: “Recent increases in temperature and precipitation combined with future changes in weather patterns will reduce Canada’s real GDP by 5.8 per cent in 2100.” That figure, which amounts to more than $100 billion, is predicated on countries around the world actually living up to their climate pledges. “If climate policies remain closer to the status quo, the long-term impact of climate change on the Canadian economy will be larger.”

In fairness to the PBO, it’s hardly the only organization trading in some questionable economic analysis of climate policy of late. Take the Public Policy Forum’s own recent report, one that said an “accelerated phaseout” of Canada’s oil and gas production would cost the country $100 billion in foregone GDP by 2050. One small problem: the federal government isn’t proposing anything even remotely close to this, which makes the entire report’s conceit little more than a straw man. Here, again, we have a piece of climate policy analysis that draws a comparison to a scenario that doesn’t exist.

This is a bigger deal than it might seem. Our ability to respond correctly to the climate crisis depends on a properly informed public. That’s already a huge challenge, given the time and money the fossil fuel industry and its various proxies have invested in muddying the waters here, first on whether human-made climate change was even real and more recently on how quickly we need to respond to it. What we need, and what we’re not getting, is a greater willingness by Canada’s economic thought leaders to fully account for both the costs and benefits of climate action — and inaction.

We all know there's a huge price tag attached to climate change, and economic costs associated with slow-walking our response to it. So why do some economists keep pretending otherwise? @maxfawcett writes for @NatObserver

Their failure to do so, after all, plays right into the hands of those who have no interest in a dispassionate analysis of climate policy. As Environment and Climate Change Minister Steven Guilbeault said recently, "Pierre Poilievre is doing what he does best — scaring Canadians with bumper sticker slogans.” He’s right. But as I’ve said before, Guilbeault’s government has given Poilievre the opportunity to use those slogans by leaning too heavily on the PBO’s earlier work in order to sell its climate policies.

Trying to sell climate policy purely on its benefits was never going to work. Any meaningful attempt to reduce greenhouse gas emissions and protect the interests of future generations will come at a cost. But it’s up to our economists to give us a fuller sense of what those costs are, both over the next few years and the next few decades, and avoid comparing them to best-case scenarios that either don’t or won’t exist.

That’s the sort of fact-based discussion we desperately need to be having — and the one certain people in this country seem determined to avoid.

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"A properly informed public" would certainly help. Unfortunately, the Liberals keep misinforming the public through their actions, the NDP is working with them, and even Elizabeth May voted to exempt farmers from the carbon tax on fossil gas. Meanwhile, only about half of Canadians understand the most basic cause of climate change.

Still, more and more people understand that the game is rigged - that we're marching toward disaster (that disaster is already here) and that it's connected to inequality, capitalism and undemocratic systems. Perhaps we'll reach a social tipping point.

Jason Hickel at the recent EC 'Beyond Growth' Forum is well worth a listen. It's 13 minutes describing degrowth and how popular the policies are : https://www.youtube.com/watch?v=xszUWnSEJig

Could the Liberals do even more? Yes.
Are they at least moving us in the right direction? Yes.
Would the CPC getting in power be an absolute disaster for Canada's climate mitigation efforts?
You bet it would.

Exactly!

"Are they at least moving us in the right direction?"

Two steps forward — and three steps back.
Climate policy based on fossil-fuel expansion is a plan to fail.

Conservatives generally deny the problem and reject the science. Petro-progressives like Trudeau, Notley, and Horgan claim to accept the climate change science, but still push pipelines, approve LNG projects, promote oilsands expansion, subsidize fossil fuels, and let fossil fuel interests dictate the agenda.
Acknowledge the science, but ignore its implications. Boast about climate leadership, but push fossil fuel expansion and pipelines. Sign int'l agreements, but fail to live up to them. Putting emissions targets out of reach.
In fact, the federal Liberals and provincial NDP parties (AB and B.C.) have proven far more effective than the Conservatives in delivering on Big Oil's agenda.
Trudeau and Notley moved the ball on the Trans Mountain pipeline down to the ten-yard line. Their signal achievement was to "push country-wide support for pipelines from 40% to 70%." Something Harper, Scheer, and Kenney could never dream of doing.

Trudeau, Notley, and Horgan did something else Harper and Kenney could never do: lead progressives over the climate cliff. Many of their acolytes now embrace fossil-fuel expansion.
When Harper and Kenney says no to a shift away from fossil fuels, the progressive option is still ON the table.
When Trudeau and Notley say no, they took the progressive option OFF the table.
When Harper and Kenney deny the science, progressives reject their arguments and head in the opposite direction.
When Trudeau and Notley deny the science, progressives accept their arguments and enable their climate sabotage.

Conservative opposition did not force Trudeau to buy the Trans Mtn pipeline.
Or promise to sell more fossil fuels to fund climate action.
Or shovel billions of tax dollars into the pockets of largely foreign-funded oil companies reporting record profits.
Or approve provincial carbon pricing schemes that let major industrial emitters off the hook.
That's on them, not on conservatives.

The Liberals' climate plan for the oilsands rests on three taxpayer-funded white elephants that are neither fit for purpose nor ready to go: Small Modular Reactors (SMRs), blue hydrogen, and carbon capture and storage (CCS). A lifeline for the fossil-fuel industry with little prospect for significant emissions reductions.
Smoke and mirrors.

(cont) The Liberals and Conservatives both plan to fail on climate. Which is worse? Climate sabotage on the right — or betrayal by "progressive" parties?
Who's worse on climate? The deniers who deny their house is on fire, or the deniers who accept their house is on fire, but throw fuel on the flames — then stand back and watch it burn? Whether we drive over the climate cliff at 100 kmh or 50 kmh, the result is the same.

Big Oil couldn't ask for a better setup. Terrified by the Conservative bogeyman, progressive voters run into the arms of Trudeau's Liberals. CAPP sets their Conservative hounds on the Liberals, while the Liberals give the O&G industry just about everything on its wishlist. The Liberals play the fear card every election to limit the NDP and Green vote.
That's the real story on climate politics in Canada. That's the dynamic that real journalism needs to report. That's the impasse we need to solve.

Canada is following a "one-eye shut" climate policy.
Angela V. Carter and Truzaar Dordi, University of Waterloo: "Correcting Canada's 'one eye shut' climate policy"

The new denialism. Just as delusional as the old kind but more insidious. And far more dangerous.
"The New Climate Denialism: Time for an Intervention" (The Narwhal, 2016)

That extensive documentation of political sins leaves exactly zero political solutions to this dilemma. Not even a scrap of hope at the provincial and federal levels.

The only thing left is an economic end run by consumers and business alike around the sclerotic politicos. Investing in solar and wind companies and decarbonizing our homes and transport choices and voting for local governments that are pro-transit and preach polyzoning are some of the tools we have beyond the senior government ballot box

This comment was meant to appear under Mr. Pounder's comments.

Yet another example of how Canada’s current archaic electoral system, both federally and provincially, exacerbates this country’s dismal response to the climate emergency. Electoral reform, specifically Proportional Representation (PR), would undoubtedly improve our ability to address this issue with improved awareness, understanding and more appropriate and effective measures.

The prospect of a majority Conservative government with Pierre Poilievre as PM (shudder) while receiving less than 40% of the votes is the reality Canadians are faced with under our current electoral system. PP at the head of a Conservative majority government would be disastrous for Canada’s climate change mitigation efforts going forward.

Stephen Harper, in my opinion, was one of the worst prime ministers this country has ever had. Harper was someone that reminded me of a snake oil salesman, with Pierre Poilievre following close behind in his footsteps. It has been pretty clear Harper helped this along.

With Harper not satisfied with his backward policies and funding cuts to education, healthcare and the environment, has now gone on to create the IDU (International Democrat Union), which to me is more of a global terrorist organization to push far-right agendas. It seems the IDU wants to take Canada, if not the world back to the 50's, removing many rights Canadians enjoy now. Conservatives talk freedom, but in reality, they are control freaks, but use the freedom buzz word to fool the naïve base they have. Also, Conservative has no interest in education, it is easier to control uneducated people than those that can think for themselves. Reminds how Trump said how he like uneducated people, which make up the MAGA base that were easy to manipulate and sell disinformation to.

The Liberals have not been perfect with climate change actions, a fair bit of talk, but not a lot of substance behind them as we have seen over the past few years. But at least they are moving thing in a forward direction, where Conservative will dismantle any gains and push for more fossil fuels. Could the Liberal do more, yes, but change is never popular and especially if actions are pay me now or pay me later focused.

I am not sure if Canada will ever meet any of the targets set under the Liberals, but for certain, Canada won't under the Conservatives ever.

Libertarianism and Neoliberalism propose to do exactly what you said. The Take Back Alberta group behind Alberta Premier Smith has the agenda all laid out and unfortunately my fellow rural Albertans has been brainwashed into only recognizing conservative governments .

The PBO's blinkered analyses on climate policy costs are as helpful as one-sided reports on the costs of eating better or working out.

Like a report focussing on the higher costs of fruits and vegetables over frozen pizza and potato chips, while ignoring the costs of a poor diet and the benefits of better eating.
Highlighting the costs of a gym membership versus sitting on your couch and watching TV all day.

The benefits on the other side of the ledger are not counted: greater life expectancy, fewer health issues, reduced healthcare costs, greater self-esteem, and just simply feeling better.

True, no climate action Canada can take by itself will mitigate global warming. Therefore, what we see most immediately from our own climate measures is the costs.

Collective problems require collective solutions. The benefits of collective global action far outweigh the costs of doing nothing. With our outsize carbon footprint, Canadians contribute disproportionately to the problem.
For the global effort to succeed, we need to contribute to the collective solution.

Hearing the words collective action is music to my ears. 40 years of neoliberalism selfishness has not served us well.

Of course, a shift away from fossil fuels and car culture offers immediate benefits. Public wealth over private extravagance, likewise.

Improved air quality. Lower healthcare costs.
Less noise pollution, quieter streets, and less stress.
Smart urban design with amenities nearby — encouraging people to live closer to where they work — saves time and improves productivity.
Fast, efficient public transit reduces time wastage and stress in traffic. Fewer traffic accidents, less carnage on the road, reduced property loss. Less social isolation. Stronger communities.

Yes, our sustainable future comes with a price tag. What is the alternative?
The costs of fossil-fuelled apocalypse are prohibitive.
Analysis that does not compare costs with benefits is a failure.

Doing nothing frankly is not an option. The high cost of the externalities of fossil fuel production and especially use are neither calculated nor considered.
Smoke and particulate in Albertans lungs right now is one. The 300 billion the oil industry expects we taxpayers to pay to clean up the abandoned, unused wells and tailings ponds. How about those trillions of micro plastic particles in my blood, and in a babies womb. Then the huge water pollution factor of mining coke or Hydrogen coal for a few jobs and leave a thousand year Selenium problem. And in some parts of our deteriorating planet, crop production actually goes down with excess CO2. Then there is water or lack thereof. Where are the billion folks who are going to be displaced in the latitudes near the equator going to move to? Housing crisis now, think it we get better?
And facts? A podcast I listen to has one evening per week called Smoke, Mirrors and Truth. Poilievre has not uttered one truthful statement since becoming a leader. As the article says fear mongering is his specialty. When 1000s of Alberta residents affected by forest fire evacuation believe the Canadian Forces involvement means they might be interned in a secret concentration camp. Says a lot about Poilievres goal. And even more about the average intelligence of my fellow rural Albertans

One problem is that in general, the economic models used by think tanks and budget offices have some false assumptions built into them, which push in a particular policy direction. Specifically, they assume that all government action has zero effect on the economy. The result is that no matter what policy is being suggested, if it costs money the models say the outcome is bad, because government actions cannot, in the model, create economic growth. Basically, the models used by the big boys are based on free-market, neoliberal ideas and they are designed to spit out austerity prescriptions. If you had the PBO model the effects of spending on infrastructure or education you'd get the same outcome, because they simply don't model the effects of the spending, just the fact that it is spending.

Again, these models will routinely fail when considering the effects of regulation, because they will assume losses are created any time the sacred "free market" is distorted, but will assume that the negative externalities that the regulation was designed to avoid do not exist.

Obviously when the models are that simplistic there is no way they are going to incorporate things like economic shifts caused by policies. So for instance, if you look at carbon taxes, a PBO analysis is not going to incorporate the carbon tax pushing people away from using fossil fuels even though that's the express purpose of the tax, much less consider the world wide move away from fossil fuels and the economic impacts of losing masses of trade if we fail to do so when everyone else has.

So yeah, modelling exercises like this PBO thing are simplistic bullshit, but also they have ideological assumptions built into them. Which is probably inevitable, and might not be so bad except that the ideology is wrong and the assumptions are false.

So maybe that's why, in general, conservatives are stupidly indifferent to context, because of the sacred free market, but if you live by it you can also die by it, which they seem to be quite okay with....
But interestingly the whole free market thing is likely what will ultimately accelerate the transition we need and bring it up to speed because of the change in demand....

In addition, those economic model assumptions are not able to cope well with disruption. Ever cheaper renewable energy, and now great battery storage capabilities, are coming on stream today and could develop into a flood with affordable PV panels and EVs. Displacing gasoline and natural gas with solar, wind, heat pumps and EVs could be very problematic for oil producing jurisdictions, especially if it happens quickly and is permanent.

Max, you are doing such a service not only to Alberta readers, but to all of us. Your cogent, researched and fact-based columns are vitally necessary given a political class, in Edmonton and Ottawa, that is intent on skating around the climate crisis that threatens to engulf more than northern Alberta if it isn't treated urgently and reversed. Keep at it!

William Mitchell is Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), University of Newcastle, NSW, Australia
http://bilbo.economicoutlook.net/blog/?p=30523

"Even the so-called “Budget” offices like the Congressional Budget Office in the US, or the Parliamentary Budget Office (PBO) in Australia, which are advisory bodies diminish our democracies.

While these bodies claim to be ‘independent’, the fact remains that they are creatures of government. Further, irrespective of the major political party in power, these organisations tend to appoint people who share the same dominant economic ideology that the Treasury suffers from. So what gain is there?

***

The solution is not to create another public institution but to empower the independent research community in universities which spans all ideologies and thus reflects a cross-section of the possible opinion.

***
Sub-contracting out the process of economic policy so that the government of the day can just blame nameless bureaucrats is an assault on democracy."