The Alberta carbon tax has been here for two weeks and indeed the sky has not fallen. But for those sky watchers, don’t expect to see much of an improvement in the economic climate any time soon.
Alberta, in the global marketplace, will have a hard time being competitive when south of the border they have elected a leader who plans to relax regulations and increase oil production.
Oilsands crude has always been at a disadvantage compared to other sources of oil because it’s more expensive to mine and more expensive to process. It will be a tough sell on the international market and capital investment flows to where the returns are greatest. The beneficiaries will be American shale oil producers who are already ramping up to take advantage of new rules allowing oil exports. We’ve already seen what more production means for the price of oil, and in turn, for the Alberta economy.
That’s not to say that climate change is not an issue – because it is. It is one that affects the whole world. But most of the world’s top polluters show little sign they’re serious about taking action any time soon. Albertans do care about climate change, but truthfully, short of shutting down our energy industry, there’s not much our province can do to make any material difference. Even then, another oil producer would happily assume our place. Oilsands emissions make up just 0.15 per cent of global emissions. If the big polluting countries won’t hurt their economies to tackle emissions, should Alberta?
Our government does not have a strategy to measure the success of the carbon levy. There is no particular goal other than hoping consumer habits change from the increased cost. There is no particular benchmark that needs to be met, and no accountability if the tax makes no difference on emissions. With the government providing rebates to 60 per cent of Albertans, only 40 per cent will actually have a financial reason to lower their emissions. It’s not really a collective effort to reduce emissions if not everyone has a financial incentive.
Rachel Notley is quick to give credit to her government’s Climate Leadership Plan when pipelines are approved, but will she take blame if oil production slows and provincial finances continue to crater? Even if action on climate change helps get these new routes approved, it’s the global marketplace that will determine how much oil will flow. You don’t produce oil if you can’t make a profit from it.
We don’t live in a bubble in Alberta. With our relatively small population, the effects of the carbon levy are unlikely to have any real impact on global emissions. Phasing out coal power in this province is likely to have a bigger impact on our wallets than our climate.
Measures like the carbon levy hurt our competitiveness in a highly competitive global marketplace. And if our economy doesn’t turn around, that is more likely to have a lasting impact on future generations in this province than any small reduction in greenhouse gas emissions. We need government to tackle the economic climate, before it can tackle the global one.
