Well good morning and welcome everyone I hope everyone has something to drink something to eat and welcome to the 2nd event of our fall close up Speaker Series I'm very regular faculty member here the Ford School and director of close of the Center for local state and urban policy I do want to draw your attention to the fact that we will be having a number of additional events in the coming weeks and over one are related to a book launch a new book on the Clean Air Act a subject especially relevant for issues of environmental policy climate considerations in the United States given Thompson from the University of Virginia and the Virginia apology for her unique role of being an academic but also in a direct role over seeing air quality issues related to the Clean Air Act in the Commonwealth of Virginia for about 10 years has a book link to her experience and she will be here talking about that on November 1 followed on November 6th by Christopher Thomas the former Michigan elections director it's elections are invariably a central issue for state and local governments certainly in Michigan and our Michigan public policy survey a major project of the Ford school close up is looking at some of those topics in in Michigan as well so those are should be 2 timely events and we encourage you to put those onto your schedule today we want to turn to a very important environmental topic and venture beyond our normal comfort zone which is the United States anyone with interests in climate knows that there have been significant shifts in the United States related to national policy or federal policy on climate change. The reaction of the United States government to the Paris Accords and lots of uncertainty about what that means for a future a future federal role in carbon pricing other areas of climate policy much less what happens to states and localities there is invariably though opportunity to learn from other federal system. Those and is of course impossible to think of a federal system that from an American but also a Michigan perspective has more relevance than our neighbors involved Ontario Quebec and candidate behind and so I'm really delighted to welcome her pal from the University of Montreal Eric is a political scientist at Montreal's and I've had the great privilege of working with him for a number of years I think of our public opinion work comparative political analysis and we actually partner on some of our survey work or are trying increasingly to ask them the same questions in Canada through Erik's work as we've been asking in the US and ask how do people who live in provinces compare with states in the life. Of the reaction to Paris and the reaction to the latest shifts in the U.S. have not gone unnoticed in the U.S. but also Canada and they arrive at a point where the Canadian engagement on these issues a federal system with some formal central power of enormous power on issues of energy and environment that tend to be delegated constitutionally and politically to provinces really kicks in and makes this a very very interesting question going forward if you provinces that actually partner closely with the U.S. Other states not much like the U.S. there are some different sponsors that we're beginning to see in the Canadian case I don't really know of any other scholar who's put together the package of engagement on public opinion and politics of federal policy on these issues in Canada as our speaker today and so please join me in welcoming actually back to University of Michigan after a pause of a number of years Erica. Thanks very. So Thanks Parry and thanks everyone for being here today just to be clear though I am from Canada but I'm not here to accept any immigration papers into our countries so what to make that clear right off the get go. So just a few years ago. Barry alluded to this the world celebrated this. Signing of the Paris accord an international agreement signed by $196.00 parties committed who committed to limiting capping the global surface temperature rise to 2 degrees and taking measures that are consistent with pursuing a cap of $1.00 degrees Celsius since then close to $100.00 signatories to that agreement indicated that they are or are that they have or are considering carbon pricing as a way of achieving those emissions reductions that they agreed to in Paris but as the world now moves towards implementation on these commitments a number of questions arise so for instance we know that carbon pricing is at least in theory a very elegant simple solution to reducing greenhouse gas emissions we want less screen else gas emissions let's put a price on this and encourage our incentivize be behavioral change that's going to reduce these emissions on the other hand political scientists like Barry myself and others have covered that this is actually a little bit more complicated politically when it comes time for implementation so in this context the Canadian case I think is a really interesting case study for US and Canada for others around the world to look at how governments might actually go about implementing carbon pricing why well as Barry alluded to $4.00 provinces in Canada so far actually have carbon pricing implemented in their jurisdictions British Columbia has a carbon tax to come back government has a system of cap and trade which actually. Worked within close collaboration with the California government with a link carbon market with California Ontario is now on board with a similar carbon market and Alberta of all places has a has now has a carbon tax on fuels of $20.00 per tonne so there's a lot go. Going on in terms of carbon pricing in Canada and most recently the federal government has announced a policy of trying to pan Canadian framework that is implementing a minimum price across Canada for all provinces and that's my talk will focus on that policy today so there's a lot going on in Canada and I think it's a really insightful case for looking at these sorts of issues need this quicker here so the outline of my talk I just want to situate the Canadian case because I'm sure not everyone is familiar with the intricacies of Canadian federalism and I think it's really important to understand some of the politics that I'll be talking about today it's really important to understand idiosyncrasies of the Canadian case I want to situate the Canadian case and get everyone up to speed on that and I'd like to follow that with a very. High level description but an important one of Canada's approach to climate change policy in the post Paris era and again I'll be speaking a lot about that pan Canadian framework that a alluded to earlier then I'd like to talk about how we got there right how did we get from you know this very elegant idea and how did we overcome some of the political obstacles to carbon pricing or how are we trying to I was Canada trying to overcome some of those political obstacles and then importantly I want to look at the future prospects of this policy. So to start Barry tells me you might not all be familiar with Canada so I want to start with. Where in the world is Canada so can you tell me on this map where Canada is as you might as you might guess it we're right up here above the United States now this is significant it's not just a joke this is actually significant because as the Northern nation Canada has already warmed by about $1.00 degrees Celsius which is about 2 point almost that's about 2 times the global average if you look in northern Canada. Average surface temperature has increased by 2.2 degrees Celsius or almost 4 degrees Fahrenheit that's this is this is the warming that's already occurred in Canada Canada is actually very vulnerable to climate change there's a bit of a debate about the extent to which the Canadian economy might actually benefit from some warming in terms of agricultural yields except for a but it's clearly the case that Canada is already feeling some of the effects of climate change Canada is also geographically large as you can see I know Americans don't like to hear this but we're actually bigger than you in terms of sheer landmass smaller However in terms of population but this too is significant because Canada's geography and its climate help to explain why we're relatively dependent on fossil fuels for things like heating moving around and that sort of thing so just in terms of context I think it's important to situate Canada on the map here. Now let's see if you can spot Canada on this chart that's ignore the left panel the left panel is only looking at global greenhouse gas emissions between increase in the level of greenhouse absolute emissions in the world but in terms of Canada's share of those emissions you really got to squint to see Canada so we see China at the top responsible for about a quarter of green. Gas Emissions us about 15 percent I'm rounding the numbers here Canada barely cracks the top 10 and if you look at Canada share of global greenhouse gas emissions that's less than 2 percent this is important because it's played into some of the narrative so some of the people that don't want to have strict climate policy in Canada often point to this number and often cite this number as saying well you know what Canada is only responsible for we do really doesn't matter if the U.S. and China aren't on board now China is on board in the Paris accord but as you know the United States is not this kind of argumentation is still is still present in Canadian political debates the U.S. is not there were only responsible for $1.00 of global emissions what can really what can we really do with a drop in the bucket. But counter the counter to that others are going to point to Canada's per capita emissions and here you see that Canada is actually an important player. In terms of per capita emissions the average Canadian emits about $25.00 tons of C O 2 equivalent per year that's about 4 times the national of the world average that you see here right so on a per capita basis the average Canadian is actually quite responsible. For. You know we contribute to this problem and while some of these while these relatively high perch capita emissions can be explained by some of the things I learned to earlier like our geography and that can of this climate. Another important aspect is Canada actually is a very important producer of fossil fuels we're in the top 10 for coal oil and natural gas and this might be surprising to some that Canada is actually the 4th largest oil producer in the world ahead of places like Iraq United Arab Emirates and Iran so I'm sure some of you didn't actually know this but this is an important aspect of the political economy aspect because. We actually Canadian some some regions in Canada some companies in Canada some workers in Canada actually profit from the fossil fossil fuel production which is an important aspect of an important cause of global greenhouse gas emissions so that makes the action on climate change in Canada a little bit tricky Now this next slide prevent presents Another important feature of the Canadian case and this is actually kind of shared with the United States right so Canada is is it's the highly regional nature of the emissions profile in Canada so what we're showing here is that. Basic Canadian geography there are 10 provinces OK And we have 3 territories in the north and if you look across the provinces and territories you're going to see a very different emissions profile so the numbers here are actually per capita emissions per province and Per Protagoras Henri and what we see here is and it's color coded so the darker reds are going to be higher per capita emissions and the lighter and I'm a little bit colorblind with the yellows and greens and red so I'm going to say this is yellow a paler color. Indicates lower per capita emissions so what you see here is that the the emissions are really concentrated in 2 provinces this is Alberta here and this is catch one here 60 tons of C O 2 equivalent per person in these regions that's an astronomical figure. If you if we're thinking about the world average being somewhere about 5. Another thing I wanted to point out here is that so so places like Alberta and says Catch On which are highly dependent on their economies are highly dependent on fossil fuel production oil production almost about a quarter of G.D.P. in some of these places rely on him directly and directly fossil fuel production. They have an economic stake in the status quo it's also the case that a carbon price a national carbon price equivalent across the board is going to have a different incidence on places like Alberta so a 10 dollar carbon tax is going to be more significant for Alberta than it is going to be for somewhere in Quebec or a place other places where greenhouse gas emissions are less intense something else I wanted to mention with this slide are is that the these provinces the oil producing regions of Canada they're landlocked. So if they want to sell their products and get their products to market and actually increase production and increase production of their fossil fuels which they're interested in doing they need pipelines so I'm sure you're all familiar with the famous debate over the Keystone X.L. which was nixed by President Obama trump is kind of breathing some new life into that proposal one option is to ship Canadian oil down through to refineries in Texas another option is to build. Extend pipelines and refurbish pipelines. On the west coast and then. Bankers can then bring that to the market and there's also talk of the Energy East pipeline which would cross 4 provinces or Outside of Canada to the east now this is a highly controversial and highly salient and I'll be alluding to this later but I just wanted to mention the economic stakes involved for these promises. Which again makes action on climate change politically tricky. These are just and I'm finishing up my background but I think it's really important to get a sense of where emissions have been going since 1990 S. So we have a sense of who's kind of relatively more polluting and who's less polluting in Canada than there's a quite a bit of a difference. But generally Canada has overall emissions have increased by about 20 percent since we had commitments that Kyoto and that sort of a thing of minus we've actually increased emissions by 20 percent and but this is highly variable across the different regions and provinces so the 2 largest provinces we have 2 really big provinces here in terms of absolute So these are absolute emissions the top blue line is Alberta and we see that the emissions in this province have been increasing substantially since producer of greenhouse gases in the country on a completely different trajectory emissions have been decreasing quite a bit actually minus the increase in Alberta I'm sure you can all guess is the increase in fossil fuel production in this area and in this province the reason for the decrease in Ontario we see that in which roughly corresponds to the economic recession of 2008 but it's actually I'm sure the recession had something to do with it but there was one decision to phase out of coal fired power generation in Ontario which removed 40 megatons from Canada's annual greenhouse gas emissions profile which is the single largest reduction in greenhouse gas emissions in North America on the continent that's one decision so that explains why in Terrio has has decreased if you look at the other provinces I just want to note that in somewhere in British Columbia we see an increase and insists cap. Sean we see an increase. Of. British Columbia is important because British Columbia although it was looks relatively green here it's green because it produces electricity almost 100 mostly from hydro electricity but it's also an important producer of fossil fuels coal in particular and increasingly national natural gas but a lot of these fossil fuels are exploited and they're not burned inside the province so that's why it's relatively we'll say green on that slide OK back to my quiz OK show of hands who's more powerful the prime minister of Canada Trudeau or President Trump So who says Trump is more powerful I know he's got small hands but he's got a he's got quite the military backing and then Trudeau right here looks like I actually look like a train boxer there actually this is kind of Canadian politics want to one but it's crucially important to understand some of the specificities of the Canadian case Canada is a parliamentary democracy which means that. In contrast to the US presidential system of checks and balances a parliamentary democracy fuses the executive and the legislative function. That means that the prime minister controls his cabinet and the cabinet controls the legislative assembly so it's very easy once a prime minister has control over the House of Commons over the legislative assembly that person prime minister can do a lot of things that the president can't do OK there's a there's a lot less checks and balances in the Canadian system than in the American one so thank God there's no you don't have a parliamentary democracy in the United States but this gives enormous power to our Prime Minister. But it also gives enormous power right the principle of responsible government the principles of Parliament to do a parliamentary democracy extend to the provinces so that means that within their respective spheres of jurisdiction provinces also have a high degree our provincial Premier's leaders and provinces also have a high degree of political power so in order to kind of complete my little background of Canadian politics when I won I wanted to so we know that the prime ministers and pre-marriage are very powerful within their respective areas of jurisdiction but what are those spheres of jurisdiction so the Canadian Constitution divides power between the federal and provincial governments as follows The federal government is responsible for a lot of things but in terms of climate policy what's most salient is international treaty negotiations the federal government has the sole authority to sign international treaties. Interprovincial and international trade is also a prerogative of the federal government cross jurisdiction all pipelines and fiscal measures fiscal measures will be important because when we talk about carbon taxation that's one of the few leavers actually that the federal government one of the few important leverage that the federal government has in terms of climate policy turning to the provincial governments now one of the big differences between Canada and the United States by the way is the mineral mineral rights property regimes right in the United States subsurface mineral rights are owned by landowners in Canada subsurface mineral rights are owned by the provinces in terms of their management of the ownership except. That gives provinces enormous. Control over an important source of greenhouse gas emissions provinces are also responsible for things like transportation buildings land use agriculture a lot of the least important leavers of climate policy actually fall within provincial hense So this creates a situation of interdependence right the federal government sets can set international climate targets at international treaties as much as it wants but it's dependent on the provinces to help implement policies that are going to realize those emissions reductions converse Lee provinces although provinces did attend the Paris agreement that was more symbolic than anything else provinces can't set can they can't play a former role in international negotiations so they rely on the federal government to represent their interests at the negotiating table this relationship of interdependence climate federalism This is why climate change in Canada is fundamentally a federalism issue in Canada and that's what my talk will be about today and just maybe the last point here the environment is one of these weird things because when the Canadian Constitution was written they were really thinking about environment and environmental policy right the environment is a shared jurisdiction with the federal government which again really renders climate policy making complex in the Canadian system this is the history of climate change policy at the federal level. In Canada since about 990 and I wrote that I could spend quite a bit of time on this going through the different action plans and this sort of thing but I think the important thing to take away from this from this chart is Canada is very rich very good at setting international targets greenhouse gas reduction targets. G 7 Rio in 19081902 an important reduction here the World Conference on the changing atmosphere and Serrano another target was set the Kyoto target of minus 6 percent relative to 1911 was. Over a period spanning I think 2006 to happened to emissions so Canada's really good at setting targets but dismal at meeting them and that has to do with what I had mentioned earlier because getting the provinces on board has proven to be really difficult getting all the problems is on board singing the same tune having provinces implement the policies required to get to these stats of emissions reductions hasn't always been easy. So that's that that was then and this is now. This is what Canada's climate policy looks like today in one picture sunny ways. Sure you've all heard of Justin Trudeau our Perhaps you've heard of our new prime minister Justin Trudeau who was elected in the October 25th one and a historic landslide victory it's actually the 1st Canadian Dynasty it's the 1st father son his father was a Canadian prime minister an important Canadian Prime Minister. Earlier in. A few decades ago. Importantly though. Justin Trudeau in his election in his during that campaign in it's it's in the platform but it's like on page $32.00 the 1st time climate change is mentioned is on like page $32.00 carbon pricing was mentioned once but the 1st thing he did when he won when he took power $1.00 of the 1st things he did was he rebranded Environment Canada right the government agency responsible for environmental regulation federally he rebranded Environment Canada environment and climate change Canada then in November December he shows up in Paris Canada is back my friends he start he wants to play he Canada reengages with the international community you may not know this but in 2011 Canada actually was one of the few countries that actually was in Kyoto and repudiated Kyoto and actually got out of Kyoto in 2011 Canada disengaged from the international efforts to reduce greenhouse gas emissions with Trudeau Canada's back Canada was one of the 1st industrialized countries to formally endorse the $1.00 degrees Celsius target that is now in the Paris accord. And in December 26th Ian The Canadian 1st ministers minus the sketch one negotiated and adopted what's known as the pan Canadian framework on climate change on clean growth and climate change so what is the pan Canadian framework on clean growth and climate change this is a policy document it's a it's more of a framework than anything it's not actually it hasn't actually been implemented yet some very important nuance nevertheless it's a policy document that was negotiated in December 26th seen with the agreement so something that we've I think never had in Canada before with the agreement of all the provinces except this catch on with the notable exception of the schedule but still pretty remarkable. It's extremely vague however in terms of funding sources and implementation schedules but it includes an impressive array of policy areas and Policy Priorities that Canada is saying we're putting forward that provinces have agreed to in terms of putting emphasis on to realize the emissions reductions agreed to in Paris so some of these and I don't have the list. It's a huge less anything from coal phase out by 2030 phasing out fossil fuel subsidies by 2025. increasing the number of 0 emission vehicles on the road. Emissions new emissions performance standards for light and heavy duty vehicles it's got everything land use. Public transit it's you know it reads everything but the kitchen sink is really in there but again very vague on funding sources very vague on implementation schedules but the one thing that has captured the attention of most people in Canada and I'd say internationally as well is this commitment to a national carbon price. So that's his point here so the 1st point is that this is a climate policy package and it's quite a carbon price is is introduced within this broader framework but the national carbon price is an important pillar within this national framework and this carbon price pillar has a few important characteristics right the 1st thing is that Canada wants a common price across the country. By 2800 which is just around the corner as you can imagine as you can see. It's based on it's actually really flexible 2 systems that should actually say 3 systems the official wording is that it's 2 systems but it's actually 3 systems so what this means is that jurisdictions can implement an explicit price based instrument I.E. a carbon tax equivalent to the federal minimum requirement of the carbon price floor that increases over time all mention that that's a separate point or are they can implement a carbon market right a carbon cap and trade market that is consistent with emissions reductions that would get you the same reductions of an equivalent carbon tax or this is where I say it's a 3 system not a 2 system approach. A hybrid system is also acceptable right a hybrid system being a tax on the consumption of fossil fuels and an emissions trading market for large final emitters that emission over a certain threshold it's actually 3 system so that's why I say it's flexible in the sense of we want to price we don't care how you do it OK. Let us legislated increases in stringency So the in the policy document in provinces agreed to this minus the Scotch one it starts off at $10.00 per tonne in 2018 increasing by 10 dollars each year up till 2020 until it reaches $50.00 per tonne in 2022. I'll talk a little bit about what that means for gas prices a little bit later. Next point revenues remain in the jurisdiction of origin this is really interesting right this is one of the most interesting features of the policy so the government has said this is going to be revenue neutral from the perspective of the federal government. Right every dollar collected as part of carbon pricing in the different carbon price jurisdictions will go back to will remain in the jurisdiction with when they were collected note that it says jurisdiction and not province OK Initially this was interpreted as hope the federal government will impose a price on certain provinces it will take the money it will give the money back to the province it's almost like a gift to the province right you can claim credit for the money and that what you do with the money and you can avoid the blame and say it's true those carbon tax or auto was carbon tax but actually upon further reading and upon further debate we've realized that it's actually this was a very judicious use of the word jurisdiction because the what the government does with the with the money it collects is still up for debate they might actually give the money back to rebate checks back to Canadians living in the problem so it will be returned in the jurisdiction from which it was raised without kind of bypassing going to the provincial government. There's a 5 year review on a reporting system to see to kind of ratchet things up over time. Now the federal carbon price backstop OK So this is this is a backstop it's a minimum requirement that all provinces must meet by 2018 otherwise the federal government will go in there and implement the carbon price for you. OK And that's what upsets certain governments it's composed of this federal carbon price backstop is composed of $2.00 key elements a carbon Levy applied to fossil fuels and an output based pricing system for industrial facilities this was actually modeled after the Alberta policy which was implemented by the recent N.D.P. government in 2017 will probably return to that later on in my remarks both elements will apply in a jurisdiction that does not have a carbon pricing system in place the backstop will also supplement or top up systems that did not fully meet the benchmark and the implementation timing the government was expecting to introduce legislation this fall right I said it's the legislation hasn't been introduced it was expected to introduce legislation this fall the latest is that that's probably going to be delayed they're still in negotiation with some of the provinces that are kind of deciding how they are going to respond to this and the output pace output based pricing system will not come into effect before January it's I think it's more than a proposal but there are some open questions and some significant questions that remain and the rest of my talk we'll look at that but before I get into that I wanted to mention why this policy is fascinating for a number of reasons. First the policy is interesting in that the flexibility of the instrument allows provinces like British Columbia Alberta and Terrio in québec to keep their existing policies right. And for the provinces other provinces to pursue carbon pricing that makes sense for them this was a huge issue behind closed doors the true government actually wanted a carbon tax in all provinces and places like the Bakken and Terrio resisted saying you know what we already have a carbon market Thank you very much and if that's the way we have a right to choose the way to price emissions in our in our province the policy also raises all kinds of questions regarding the equivalency and relative stringency of provincial carbon pricing across the Canadian provinces right so as you as I will mention in a 2nd the B.C. carbon tax presently is that $30.00 per tonne. Carbon permits are trading and come back at about $15.00 per tonne so about half of that that's created quite a debate. The seas upset the British Columbia has been upset that they're paying $30.00 per tonne and we're carbon is selling at half the time half the price across across the cross the country and then come back turns around and says well if we can reduce emissions cheaper Who are you to say we should have a carbon tax right so it's very delicate very sensitive very important political debates happening in Canada right now around these issues. Really quickly I just wanted to show you this is modeling from the Canadian government that shows these are the projected emissions as of December 26th 18 to A bit of a decline at 2025 with the pan Canadian framework measures here the projects projected emissions 05567 megatons a significant decrease but won't get it get quite get Canada to its target of $523.00 megatons which is a 30 percent reduction relative to 2005 levels by 2030 so even with this policy which is still highly uncertain politically controversial where it is still not quite there in terms of getting to emissions reductions agreed to in Paris. So how did we get here. I don't have time and I like to know how I'm doing for time but. OK I see a 25th Great thanks so how do we get here so I just I don't want to take away from what we've seen in the past year 2 years it's a remarkable progress from where we were just a few years ago the fact that you know 9 Canadian provinces have signed up on this the fact that we that this is looks to be moving forward I think is remarkable progress in just a short amount of time but at the same time and in order to understand this progress we need to understand kind of where how we got here I don't want to spend too much time on this but this comes from. Actually very coauthored chapter Barry Debbie dual who's a former post-doc here and I wrote a few years ago and it looks at kind of the ebbs and flows in terms of federal and provincial leadership on the climate change issue and I'm not going to I won't walk you through everything but just to say that in the you know when climate change 1st appeared on government agendas there was no significant policy right there was a lot of target setting as you saw but no significant policy was made in 1095 to about 2001 this corresponds to the Kyoto negotiations and this was a period of contested federalism so the the back story is apparently the province's had agreed to a 0 percent reduction commitment for Kyoto then Prime Minister Chretien who got wind of the European Union's target of minus 8 percent and Bill Clinton's target of I think it was minus 5 percent correct me if I'm wrong some thereabouts Trudeau not sure shot that CA who was the prime minister at the time actually a lame duck prime minister at the time because he was being pushed literally being pushed out of office because he was being there he was there for so long. He unilaterally instructed Canadian negotiators to set the target at minus 6 percent. The provinces were blindsided very upset that this happened comeback was the only province by the way that wanted a more ambitious target all the other provinces said 0 percent is perfectly fine with us especially on the oil producing promises that set off a period of history and Canadian climate policy that we can characterize as contested federalism because the provinces were so upset that they didn't want to implement that so the implementation became a huge issue we had commitments and Kyoto but all kinds of interprovincial bickering intergovernmental bickering so that's off a really. Kind of a dark era and Canadian climate policy development in 2002 to 2005 new government just got things out of there in about 2003 replaced by Paul Martin in the same political party the liberals Stephane Dion who was then the Environment Minister had proposed a national cap and trade program they were gearing up for its launch but then an election happened and the conservative power came into party which kicked off an era of very low federal and gauge of and climate change politics and set the stage for high provincial leadership in. In climate policy development So what happened was during this period Alberta was one of the 1st provinces to move in terms of developing a specified gasometers regulation so this was an intensity targets which intensity targets are in emissions per unit of production for about $100.00 entities in the province the compliance options were to purchase offsets if you didn't meet that target or you could pay $15.00 to a technology fund which most of them actually did because that technology fund would be recycled back into the pockets of industry or you could use previously generated emissions performance credits that were gained by beating that intensity tard. Right. Back $2071.00 of the 1st jurisdictions I think the 1st jurisdiction in North America to implement a very modest carbon tax $3.00 per ton representing just about one cent per liter at the pump never the less so this was primarily a fiscal measure intended to raise money through the event of also new metal fall vassal it would all of these proceeds would go into a green fund which would then fund kickbacks climate change mitigation and adaptation measures. Now at present but now those policies no longer exist anymore what we have are carbon prices fixed carbon prices in B.C. and Alberta and carbon markets in Quebec and Ontario so these are the 4 jurisdictions with carbon pricing I'll get to this in a 2nd this just concentrate on the lefthand for a 2nd. So in British Columbia the 2nd jurisdiction maybe the 1st or a section of North America to have a comprehensive carbon tax and not just a carbon price not just a tax on fuel and fuel distributors but actually a tax on all a comprehensive tax on most fossil fuels on all fossil fuels in the province that is at $30.00 per tonne since 2012 right it was introduced at $10.00 per tonne in 2008 increased 232012 since then it's been frozen the Alberta carbon Levy just introduced in 2017 it replaced or it will replace the specified gas emitters regulation it starts off with a $20.00 per tonne carbon tax on the consumption of fuels since 2017 this is really Nixon in China this is right Alberta is that red province that produces a lot of fossil fuels a new N.D.P. So a left of center government elected in Implementing this important policy which is highly controversial in that province. To back has a functioning carbon market since $2013.00 and Ontario since 2017 also is now auctioning credits in a carbon market that is expected to link with come back and. And California this panel here I just want to say just how important. Cross national collaboration was in the development especially in the comeback in Ontario carbon market so I'm sure you've heard of you're more familiar with California than you are with the Canadian cases California is an important. Incubator I guess of climate policy ideas and a thing from the emissions standards for vehicles which they fused into Canada adopted 1st by come back then by the federal government this idea of cap and trade the Western climate change initiative not really Western because you have some eastern provinces here that are actually California is trading partner right now for in the carbon market is a Canadian province and it was developed together collaboratively so the United States policy in the United States especially policy in California has had an important impact on the the development of climate policy in Canada at the time and I think British Columbia I don't know what the status are but they were observers they were supposed to implement a carbon market they went with the carbon tax and since then carbon markets are not really on the table in British Columbia but Ontario has now since become a partner with a functioning market and out Manitoba status is still kind of up in the air. So we have very few examples of. We have very few examples of political dynasties in Canada so allow me to indulge a little bit of one of my interpretations of why Trudeau has kind of gone ahead and implemented this carbon price recall that it wasn't talked about during the election right but once he's in power clearly climate change is a top priority issue for the Trudeau government right to me this is an indication that Justin Trudeau is motivated primarily by good policy as opposed to good politics if it was good politics he would have been talking about this during the election during the election campaign but no this is more of an issue this is I think Trudeau believes that this is important this is an important issue and he wants to move forward on this question another interpretation so good policy motives but there's this other interpretation and that's this legacy issue so a little bit of history and this is this is a little bit. I think it's really interesting Trudeau's father implemented the national energy program in one that was in place in Canada between was a very controversial measure it was implemented in the context of. A contraction of global oil supply of rising prices throughout the $1970.00 is right they will pickle a crisis and the United States transitioning from the world's largest oil producer to a net importer of oil. Pierre Elliott Trudeau just I'm sure those father saw this as an opportunity to kind of put Canada on the map and he wanted to nationalize energy per. The oil industry and Canada wanted to take back some of the ownership that was being you know a lot of American companies at the time were involved in oil extraction and development in Alberta so Trudeau Trudeau SR developed this policy that was highly controversial of nationalizing the energy production in Canada and was hated for it in the West absolutely hated for it cause it kind of stoked sentiments of Western alienation gave rise to a movement in Western Canada the West wants out let the eastern bastards freeze in the dark this is our energy so there is this one interpretation that Trudeau he wants this he's really motivated by good policy motives but at the same time he wants to avoid repeating the legacy of his father so what's he to do this is so Trudeau now want. Recently that your own government approved pipelines the Tkinter Morgan pipeline and bridge pipeline to export or to move all from Alberta to the west coast in British Columbia and this is kind of you know Bill McKibben who's going to be here this week has written that trolls are climate policy hypocrite right at least Trump he's he doesn't talk out of both sides of his mouth Trudeau on the other hand wants action on climate change wants to reduce greenhouse gas emissions but all of a sudden he's approving pipelines right there is a bit of a contradiction there. Which leads So my interpretation of this is that you know Trudeau wants a carbon price but he doesn't want to he wants to avoid the feelings of Western alienation and imposing too much costs on Alberta so this is just. So there's this idea that by linking these 2 controversies pipelines are very controversial in Canada carbon pricing is very controversial in Canada but for different reasons pipelines are loved by Western Canadians conservative Canadians who also hate climate policy people green Canadians however it's the opposite they hate pipelines but they love climate policy commitments Trudeau is developing a really risky strategy here race trying to find some kind of a compromise and see if pipelines might be a pathway to consensus so the slide here is showing some some data from Abbott from Abacus data which is a research group in Canada looking at views on so this is kind of a crosstab looking at views of Prime Minister Trudeau's carbon price is that a good idea is that acceptable idea is a bad idea and we see that of those who think that Trudeau's carbon price is a good idea 46 percent approve a pipeline. And of those that think Trudeau's policy is a bad idea Welp support for. Support for a pipeline is that 52 percent so there's this idea that by having a pipeline maybe we can kind of increase support for carbon pricing in Canada I think it's a risky strategy because I think you might end up you risk allien ating both sides of especially your base. So. That's in a nutshell. What Canada's approach to climate policy is and how we got there right it's a story about Canadian federalism It's a story about trying to find strike compromises between the different interests of a regionally. Heterogeneous. Federation now what are the future prospects of this policy I see at least 3 major challenges going forward and the 1st as you might expect begins here. The Trudeau government was was expecting Clinton to win as most people I think were. Now they face the prospect of you know and these policies were already being developed before. The election the United States all of a sudden Trump gets power in the White House which raises the question can we really go ahead with these pretty ambitious policies in Canada there's always been a debate in Canada with respect to what is Canada's room for maneuver to what extent can Canada have a policy that is independent of the United States and why is this such an issue it's because of this notion this relationship between Canada and the United States the trade relationship in a very important to highly interwoven economically interdependent economies I have the stats here about 80 percent of Canada's exports in exports go to the United States right converse Lee I think it's about $52.00 U.S. exports to Canada represent only 18 percent of U.S. exports OK So this is a highly asymmetric. Interdependent relationship between Canon the United States and there are voices in Canada that all have always said Canada can't get too much out of this of step with its most important trading partner lest it become lose international competitiveness in its international markets right so we would Pino In other words we're going to penalize Canadian export others to the United States manufacturing energy and energy exporters if we're going to make Canadian products more expensive while the United States doesn't have these sorts of policies so there's this idea that Canada can't go ahead with these policies with given the current climate and context in the United States and if you look at the will so this raises the question of what role U.S. policy should play in Canadian climate policy this is some public opinion data that that asked the following question is asked respondents to choose between 2 options Canada should hold off on carbon pricing to avoid having a competitive disadvantage with the United States that's in blue and or what the U.S. does shouldn't matter Canada should implement carbon pricing now so I've only put the numbers so it's all numbers should equal 100 I only put the numbers here for the blue and what you see is overall 55 or so so the opinions are really divided on this question overall Canadian 55 percent of Canadians think Canada should hold off so there's this idea that Canadians are relatively cool to the idea of being too far out of step with the United States so this is challenge number one for Trudeau and if you look across regions look at look at Albertans this catch on 65 percent of people living in Alberta and surprisingly don't want to get don't want Canada to be too much out of step with its most important trading partner. But I would argue that the main obstacle for the pan Canadian framework on climate change is less international less what's going on in the United States and more a domestic political economy story something that I've alluded to throughout my talk so these are some of the provincial reactions to Trudeau's carbon price British Columbia story back in Ontario were immediately on board saying yes this is a good thing. Of course right they have a carbon price they want other jurisdictions in Canada to have a carbon price their carbon price happens to be lower than other provinces so there's no issue there as well with this important caviar qualification that almost immediately the Premier's of these saying yeah this is good policy but you know what we're not getting rid of our carbon market we're not going to switching to a carbon tax so there is that some qualification there British Columbia supports the federal protests but raise the question of equivalency in terms of stringency as I mentioned this earlier the $30.00 per ton carbon tax in B.C. How do we square that with the $15.00 per tonne credits selling in the Bakken Ontario cap and trade market so there's an issue there which has sparked a whole debate about stringency and equivalency which is ongoing today and is a challenge Alberta. Has required has is on board they have a carbon price and they're going to be replacing the specified gasometers regulation soon with a performance based intensity based system similar to what the pan Canadian framework has but the Alberta is actually requiring approval for a federal development so here's a quote from Premier Rachel not only this has to be concurrent with a pipeline an ambitious public policy move like this even as worthwhile as this needs to be built on top of a fundamentally healthy economic foundation and a new pipeline is what will give that not only to Alberta but to the rest of Canada importantly. This argumentation is how not lead justified or sold her carbon price to. I guess somewhat resistent public in Alberta. Interestingly. I won't get too far into it but interestingly some of the some of the ways that the Alberta has justified their carbon price in terms of market access so I'm sure you're familiar with the bait you know of dirty oil we don't want tar sands oil from Alberta they're not doing anything in terms of climate policy this is you know this is a carbon bomb the idea is that if Alberta has a carbon price then they can buy back a little bit more legitimacy on the international stage and kind of protect their access to markets their export markets by saying yes we are a producer of oil but we also have strict common policy at home take our oil you can use our oil without feeling too bad about it. Other provinces Manitoba are relatively small province neighboring. Ontario has delayed its signature of the pan Canadian framework and asked for more federal funding for public health sector so here we get another kind of a linking across issues but it's always saying you know what we're open to your carbon pricing regime but what about those health care transfers. This is catch on has opposed carbon pricing outright saying that carbon pricing is not in the interest of the people of this catch on not in the interest of its economy and will disproportionately hurt its energy sector which is already reeling from oil proly prices this is probably the reaction you'd expect from Alberta as well but not with someone like Rachel not who was in power who's a left of center government that's open to this idea of having a carbon price using that money to modernize the economy. Build a new green economy and also protect access to markets have the social license I guess you could call it. Now the Atlantic provinces Nova Scotia New Brunswick New Finland and P.D.I. are all developing carbon pricing policies and I don't want to get into the nitty gritty because this gets technical really quick but there are some issues here right so Nova Scotia just last week I think released its plans for its carbon markets wants to go cap in the cap of the route of cap and trade but there are huge issues here in terms of equivalency this is actually what's really holding up the implementation of legislation or the the introduction of legislation in the House of Commons this fall it might still be introduced but there's a lot more negotiations happening as we speak so this to me is the real challenge right it's less Trump and what's happening in the United States because let's be honest there are things happening in the United States despite from California just recently. Extended its its cap and trade legislation there's a lot of things going on in the United States that bode well for climate policy in North America I guess one could say the real challenge is I think these domestic political economy issues across provinces. What about. Public opinion so there are 3 options for governments and I'll try to wrap up quick because I want to keep times for questions but there are 3 basic options for for governments write one you can come up with your own or continue to implement your own plan to put a price on carbon or you could do nothing and let the federal plan take effect that's the federal backstop right the federal government will impose a carbon price for you or you can fight the implementation of a federal carbon tax this sounds familiar by the way. C.P.P. right clean power plan different options for it but I just wanted to highlight where the different carbon price jurisdictions the public of these different carbon price jurisdictions stand so if you look in British Columbia the moral category says let's continue with our tax cut back and trade market so far so good but if you look at Alberta let's fight the implementation of a carbon tax and similarly in Ontario the model category here so that's a majority but close to a majority here is even in Ontario there is actually quite quite a bit of support for fighting implementation of the federal P.C.F.. Another key challenge will the province's with carbon prices actually survive upcoming elections we have elections coming up provincial elections coming up in. Ontario come back and Alberta we just had elections in British Columbia Christie Clark lost power but was replaced by an N.D.P. Green coalition Don't worry the carbon compact isn't going anywhere OK in British Columbia so that but these 3 other provinces where elections are relatively imminent. Right are all very vulnerable so Kathleen wins approval ratings are a dismal polls as I was preparing for this talk she has the lowest approval ratings in I forget how many years now and I think in the last 14 years for an Ontario premier 76 percent of people in Ontario say it's time for a change and that sentiment it's time for a new government she's not doing too well the good news is her main opposition the conservative party actually supports carbon pricing but not a carbon market they support a revenue neutral carbon tax so while the end Terrio policy is up in the air carbon pricing I don't think is particularly vulnerable let's move on to Alberta this is well let's move to cut back because cutbacks a little bit easier so quickly office is actually not doing too well either 32 percent approval rating. Recently just those in the cab on the way here. While on my way to the airport to come here. The results of a byelection in Quebec City were happened and the liberals who also Party lost power in a riding that they've held for the last 14 or 20 years something like that too they see a Q party which is the only party that kind of. If anybody is going to oppose carbon pricing it's that party so while you know byelection aren't excellent predictors of electoral support they do provide some indication of the way the winds are blowing and it's not looking too good for the come back liberal liberal government at the time we speak but I still think that the back policy about carbon price is pretty is pretty solid because there tend there's actually more or less a consensus and to back that carbon pricing and action on climate change is good so so the real question is in Alberta right the heavy fossil fuel producing province Rachel not Leigh is not doing too well in the polls 28 percent approval rating it's fallen ever since I have the graphs in my extra slides it's been on a downward decline ever since the carbon price was announced. So she's not doing too well but fundamentally what's really going to matter I think for Rachel not Lee's electoral fortunes any the the longevity of the carbon price in Alberta is her ability to get a pipeline through her the ability to get a point if Rachel not only gets the pipeline then her argumentation that we can have a pipeline and we can have carbon pricing and everybody can be happy. Whoa kind of bear fruit. The last thing I'd say though and this is pretty important the federal government modeled their policy their backstop. With the Alberta model it's a price on fossil fuels with an intensity based. Performance based story with a performance based system for large final emitters that's exactly what Rachel not Lee has. Developed the out the Alberta government has developed if she loses power and the conservatives remove the policy or are. Trash the policy the federal government under the P.C.F. can go then go and impose a sensible more or less the same policy and all is not lost so there's this idea of which I think is a very forward looking. Was pretty smart by the federal government so I'm going to I'm going to conclude with this with this slide this is some of our polling that we've done. And we looked at support for Trudeau's carbon price with no costs pacified at the $0.02 per liter which corresponds to a $10.00 per tonne and the. $0.11 per liter which corresponds to a $50.00 per tonne and what we see is you know as you increase the price per tonne the opposition increases this is that's generally So there's actually quite a bit of support for a carbon price in the abstract but once you talk about the impact even a $2.00 cent per liter impact at the pump you're decreasing support by about 10 percent and by about another 15 percent at 11 cents amongst Liberal Party of Canada supporters even higher carbon tax support but once you you know at a $50.00 per tonne which is the government's policy in 2022 you're out about 505050 percent support 40 that is that 40 percent 40 percent opposition and then the rest are undecided so it's pretty the visit of even within the Liberal Party of Canada supporters so that's something to keep in mind that to look at over the monitor over time OK So just to conclude. What I want to say what kind of lessons can we draw but what kind of things emerge out of this. Out of this story of carbon pricing in Canada Well the 1st thing I want to point out is the role of horizontal and vertical diffusion. From bottom up to top down federalism so there's you know the provinces during that period of of innovation that I had talked about during that period of federal disengagement and provincial engagement actually created their own carbon pricing and that actually really influenced. The federal government's approach to carbon pricing that we have today. Other influences on provincial carbon pricing actually came from here the united states especially California but in other places as well and there is the like there is the possibility of a trump effect but it but Trudeau looks like he's dug in his heels and he's going to resist any potential Trump effect the one of the paths to coordinated carbon pricing in federal systems this is a key is probably one of the fundamental questions and the Canadian case identifies 2 potential pathways there may be more in determining the minimum standards as we've seen with the P.C.F. a 2nd potential pathway is the scope for provinces to lead is there scope for provinces to lead a coordinated response. W C I Alex A back on Terrio collaboration on cap and trade now potentially moving to the Atlantic provinces where they seem to be wanting to integrate a regional cap and trade market for the Atlantic provinces so there's never so despite the fact that the federal government seems to be. Determining the minimum standards nevertheless seems to be some capacity for provinces to Nevertheless contribute to a core native carbon pricing system in a federal system. Last 2 points I couldn't help while preparing this talk about parallels with the clean power plant which I'm sure you're probably even more familiar with than I am I haven't followed it too much but you know this idea of the federal government setting minimum requirements with which states must. Comply otherwise the federal government will step in the E.P.A. In this case would step in to regulate for the states just it strikes me as a really interesting parallel and a really interesting comparison so for your term papers you might want to maybe think about looking at Canada and I'd be interested in feeling any questions you might have or helping you out in that regard but one of the key differences is also. They limited flexibility of the price floor so whereas the the clean power plan was very kind of agnostic on the means of how to meet the requirement of the emissions reduction the federal government the P.C.F. framework actually is a little bit more stringent in saying they they want to fix the price at $10.00 per tonne let's say and that's what you and that actually makes equivalency more of a challenge so that that I think is an important piece. Of the equation finally the political economy of implementation fascinating questions that arise when looking at the Canadian case I think the same issues arise when looking at the American case. Can consensus through compromise and compensation be achieved right so Waksman Mark is a good case of this right that the $300.00 extra pages that nobody read before it went to Congress this idea that we can kind of broker our way find compromises cut back room deals is that a way to consensus and if so do the distributional politics approach which which that kind of compromise and compensation embodies that lead us directly to a lowest common denominator approach watering things down through these compromises in order to get the minimum. Coalition the minimum coalition to kind of get these things through I think is an important question so this is a very legitimate question terms of looking at does the distributional politics approach get us to where we need to be what are the potential implications of that approach so that concludes my talk I think we have 4 and 10 minutes for for a question the Nats are and I'll be happy to take your your comments and questions thanks.