Who has the best climate action plan?

Third-party modelling estimates NDP, Green plans would reduce GDP growth by 6.5% to 7.5%

Canada’s major political parties have been engaged in climate one-upmanship during this election campaign, setting ever-higher emissions reduction targets | Paul Souders/DigitalVision/Getty Images

Polling suggests the majority of Canadians are concerned about climate change and want effective policies to reduce greenhouse gas emissions.

One in five Canadians say it’s the most important issue in the federal election, according to a recent Angus Reid poll, which may explain why even the Conservative Party of Canada is now promising carbon pricing, a low-carbon fuel standard and other climate policies.

But there is a danger that Canadians concerned about climate change might cast their vote for the party with the most ambitious emission reduction targets without considering whether they are realistic, or how much they would cost, says Mark Jaccard, noted Simon Fraser University sustainable energy economist.

“An ambitious target combined with economically inefficient policies is devastating to the economy,” Jaccard writes in a recent analysis of the climate plans of the Liberal Party of Canada, the Conservatives, the New Democratic Party (NDP) and the Green Party of Canada.

Political parties have been playing a game of one-upmanship by setting ever more ambitious targets for reducing Canada’s greenhouse emissions. But voters should be wary of equating ambition with efficacy, Jaccard writes.

“Political operatives long ago realized that some voters mistakenly equate the GHG target with the level of climate sincerity.”

Based on targets alone, the Green Party wins hands-down, since it has the most aggressive GHG reduction target: 60% by 2030.

But using carbon pricing as a measuring stick, hitting that target would require carbon pricing to rise by $55 per tonne each year to reach $580 per tonne by 2030, according to the modelling done by Jaccard and one of his students, using a tool, gTech, developed by Navius Research that calculates not just emissions reductions, but economic costs as well.

Emission reduction targets have become like a political high-stakes poker game, with the Liberals setting the ante at 30% by 2030, then raising it to 40% to 45%, followed by the NDP calling and raising it to 50%, the Greens raising it to 60% and the Conservatives folding at 30%.

But Jaccard said it would be a mistake to assume the Greens or NDP have the best climate plans simply because they are more ambitious, or that the Conservative plan won’t be effective just because its targets are lower.

“We need to know if the party has policies that will achieve its target, and we need to know if it’s being honest about the cost,” Jaccard writes.

“With the Green plan and the NDP’s plan, what’s disappointing is that there’s not a lot of detail about how we would get there,” said Merran Smith, executive director of Clean Energy Canada, which has also analyzed the main parties’ climate action plans.

And while she said it’s encouraging to see the Conservatives are no longer questioning the need for policies like carbon taxes, she said their emission reductions targets are disappointing.

“The Conservative plan would take Canada backwards,” she said. “Their 30% target is less than what we already have in place right now.”

Jaccard estimates the original Liberal plan (with a 30% reduction target) would reduce Canada’s GDP growth by 2% between now and 2030. So would the Conservative plan. The NDP and Green plans would reduce Canada’s GDP growth by an estimated 6.5% and 7.5%, respectively.

While the Conservative plan is the least ambitious, its policy outcomes are verified by independent third-parties.

When asked to verify their plan, Navius concluded the Conservative plan would achieve reductions equivalent to the Liberal plan, when the Liberal target was still 30%.

“The Conservative Plan achieves comparable greenhouse gas reductions through 2030 relative to announced federal policy to date,” Navius concluded.

However, in April, the Liberals bumped their 2030 reduction target to 45%, and recently announced new policies aimed at achieving them.

Jaccard’s biggest concern with the Conservative plan is a pledge to replace the federal carbon tax with a new carbon pricing scheme – one in which carbon taxes paid by consumers would go into a special credit account for the purchase of low-emission products.

“I am concerned that this policy will not be as effective as a simple $50 carbon tax,” Jaccard writes. “I am also concerned that the Conservatives will not keep their promise to immediately implement their regulations, repeating the delaying tactics of the previous Conservative federal government.”

Jaccard’s modelling found the NDP’s plan particularly wanting. One tool the NDP proposes is carbon budgets, which Jaccard said are “difficult to conceptualize, let alone model.”

“Only in a police state could they enforce a budget for every single person and firm, so these are presumably sectoral budgets, such as limits on emissions from buildings, light duty vehicles, the cement industry and so on. Modellers for 30 years have shown that a budget approach costs the economy dramatically more than an economy-wide carbon tax.”

Jaccard said the NDP’s aggressive reduction targets and “unwillingness to give a break to trade-exposed industries … results in a significant reduction of industrial output and employment, especially among the trade unions that tend to support the NDP.

“It’s hard to imagine that an NDP government would implement such a policy. But if they do, the gTech modelling reveals an implicit carbon price approaching $500 with a major GDP loss of 6.5% in 2030.”

When it comes to striking a balance between reducing emissions and economic performance, the Liberal plan comes out on top. Previously implemented policies include a carbon tax that tops out at $170 per tonne by 2030 and the phase-out of coal power by 2030. Additional policies released recently include:

•a commitment to achieve a 100% zero-emission electrical grid by 2035;

•new federal regulations requiring 50% of all new car sales to be zero emission by 2030 and 100% by 2035; and

•five-year targets, starting in 2025, to reduce emissions from the oil and gas sector to zero by 2050.

“Since oil and gas is 26% of Canada’s emissions – and it has been growing – this is significant,” Smith said.

While the Liberals also propose mandating methane emission reductions in the oil and gas sector by 75% (from 2012 levels) by 2030, the only way to achieve net zero emissions in that sector is through the deployment of carbon capture and storage (CCS) on a large scale.

The Alberta government has asked for $30 billion in federal funding over 10 years to make that happen, but so far the Liberal government has promised only to introduce a new investment tax credit in 2022 to help spur investment in CCS. The Conservatives are committing $5 billion in CCS investment.

Smith said the Liberal reduction targets are achievable through the policies they have announced.

“It’s very realistic,” she said. “What they’ve outlined would in fact get us to 40% reductions.”

Jaccard agrees.

“While I haven’t had time to precisely model these latest policies, my triangulation between our many simulations suggests they’ll likely achieve the 40% target, albeit with a larger GDP impact of about 2.5%,” he writes. “These are effective and economically efficient policies.”•