Climate Policy Resilience in the Canadian Provinces

The Canadian provinces have taken critical steps to address climate change in the absence of federal leadership. Since 2006, five provinces have adopted carbon pricing instruments, under the forms of either carbon taxes or emissions trading. In the context of recent policy reversals—including the repeal of the British Columbia cap-and-trade legislation and the shift from a carbon tax to a cap-and-trade system in Quebec—how can we explain that some carbon pricing instruments have been more resilient than others? The paper answers this question by using a combination of process tracing and comparative analyses while investigating four cases of carbon pricing instruments in Quebec and British Columbia. To shed light on these cases, the paper applies the concept of policy resilience, understood as the outcome of both negative and positive policy feedback cycles interacting with the design of policy instruments. It also introduces a distinction between micro-level policy feedback—observed at the level of the policy sub-system—and macro-level policy feedback—observed in public debates, generally involving political parties. Recent developments in British Columbia and Quebec lead us to conclude that the carbon policy instruments that have proven the most resilient so far—the BC carbon tax and the Quebec cap-and-trade system—have relied on sophisticated design and adhesion mechanisms. Such design allows them to foster positive policy feedback, by creating constituencies that support them, and disrupt coalitions that oppose (or could have oppose) carbon pricing instruments. While the distinction between micro and macro-level feedback proves useful to better describe the dynamic at play in each case, the interactions between the different level of policy feedback and their impact on carbon pricing resilience were found to be complex and in some cases, especially the BC cap-an-trade, counter-intuitive. These findings underline the necessity to pay close attention to the evolution of the ideational, institutional, and structural contexts surrounding the policy-making process, which can also have an impact on policy resilience.

2015

This dissertation studies the emergence of carbon pricing mechanisms at the sub-federal level in Canada in order to answer two questions. First, why have some Canadian provinces adopted carbon pricing instruments, either a cap-and-trade or a carbon tax, while others have not? And, second, of the provinces that have adopted carbon pricing, how can we explain differences in the design of their carbon pricing instruments? In order to answer these questions, the dissertation has investigated the process of adoption of climate change policy in Canada’s ten provinces through four distinct stages: 1) the diffusion of the ideas supporting carbon pricing, 2) climate policy capacity building, 3) the public debate following the proposition of carbon pricing by the governing party, and 4) the design of the carbon pricing instrument. After reviewing the climate change policy-making processes that have taken place in the provinces, the dissertation’s answer to the first question is that carbon pricing instruments to reduce greenhouse gas (GHG) emissions have been adopted in provinces in which the government has shown early on an acceptance of both the scientific paradigm of anthropogenic climate change (ACC) and the policy paradigm of liberal environmentalism (LE)—the latter promoting market-based climate policy. These provinces are also the ones in which the premier has shown a personal commitment to the issue of climate change: a commitment which has contributed to focusing resources on the issue and to building climate policy capacity ahead of other provinces. Among provinces that have adopted carbon-pricing, climate policy is framed as providing important economic benefits through the creation of carbon markets and fostering investments in the renewable energy industry and other green technologies. In order to adopt carbon pricing instruments, both the diffusion of ACC and liberal environmentalism, along with the building early on of climate policy capacity, are necessary conditions. The dissertation’s answer to the second question is that provinces, although to varying degrees, have designed their carbon pricing instruments in order to take into consideration the particularities of their economic context and the policy preferences of their main industrial emitters. While some provinces, such as Quebec in imposing a cap-and-trade system, have been willing to go well beyond what their industries have been ready to accept, at least initially, others have adopted carbon pricing instruments designed to match closely the policy preferences of their most important GHG emitting industry. Tracing provincial climate change policy-making process through the two stages of the public debate of carbon pricing proposal and their adoption shows the political contingency of carbon pricing mechanisms being adopted. Carbon pricing instruments are adopted in different contexts—but in all cases they are adopted when political conditions facilitate their adoption. Facilitating political contexts are 1) majority governments headed by premiers committed to carbon pricing instruments; and 2) governments enjoying an interparty consensus around the desirability of carbon pricing, which led to a low electoral salience of the issue of carbon pricing. As an example of the first, carbon pricing was adopted and maintained in British Columbia’s polarized bipartisan system and despite the electoral controversy surrounding the carbon tax during the 2008 election. As an example of the second, minority governments that enjoy interparty consensus around the desirability of carbon pricing—for example, Quebec—can adopt carbon pricing instruments during minority government periods. The absence of either condition makes carbon pricing instruments unlikely. In the Canadian context, three provinces have multiparty systems prone to minority governments: Quebec, Ontario, and Nova Scotia. Both Quebec and Ontario pledged to implement a WCI-inspired cap-and-trade system and experienced minority governments in recent years. However, carbon pricing was not an electoral issue in Quebec, given the consensus that existed on the implementation of cap-and-trade among the main political parties. In the case of Ontario, such interparty consensus does not exist and carbon pricing became an electoral issue in the 2011 election. Along with other taxation and energy issues, part of the Conservative campaign narrative against the Liberal government. The example of British Columbia shows, however, that provincial governments can persist in the adoption and implementation of carbon pricing despite public controversy, as long as they maintain a majority government, which is the usual outcome of the BC polarized party system. Alberta, before the most recent provincial election, was in a similar situation and the issue of carbon pricing was not salient. However, in Ontario the Liberals only secured a minority government in the 2011 election, a more likely outcome under the Ontario multiparty system, and the decision was taken not to proceed with the implementation of the cap-and-trade system in the aftermath of the 2011 election. The Quebec PQ minority government was in a similar position after the 2012 election. However, thanks to the interparty consensus on carbon pricing and low issue salience, the Quebec government decided to move forward on the cap-and-trade system. A comparison among the cases of Quebec, British Columbia, Alberta and Ontario shows the importance of the political context in the adoption of carbon pricing instruments, insofar as adoption which appears to be much more vulnerable in provinces with a fragmented multiparty system. It allow us to predict that now that the Ontario Liberals have secured a majority, they will be able to proceed with the full adoption of a cap-and-trade system, as per Ontario premier Kathleen Wynne’s stated intentions. Moreover, if the interparty consensus in Quebec is compromised and another minority government elected it could jeopardized current carbon pricing policy. Considering now the final stage of the climate policy-making process—the design of the carbon pricing instrument—the presence of the oil and gas sector emerges as a major factor that shapes the development of carbon pricing in provinces in which this sector plays a significant role in the provincial economy. Oil and gas producing provinces that have adopted carbon pricing instruments have designed their carbon pricing instruments so as not to constrain the profit-making capacity of the oil and gas sector. Alberta’s intensity-based emissions trading and British Columbia’s carbon tax do not restrict the growth of industrial GHG emissions and, to date, have allowed the oil and gas sectors to continue to grow. In British Columbia and Manitoba, the growth of the oil and gas sector appears to have prevented these two provinces from fully adopting the cap-and-trade system designed through the Western Climate Initiative (WCI). By contrast, Quebec has resisted the development of shale gas and proceeded with the adoption and implementation of its cap-and-trade system in the framework of the WCI. This dissertation has also investigated how party ideology and public opinion affect governing parties’ incentives to adopt carbon pricing instruments. It finds that public opinion majority support does not explain the adoption of carbon pricing. Carbon pricing instruments have been implemented in provinces with high (Quebec) but also low (Alberta) levels of support for these policies. Furthermore, carbon pricing instruments have not always been adopted in provinces with relatively high level of public support (such as Ontario). Finally, there is no clear relationship between the governing party’s ideology and carbon pricing. Carbon pricing instruments have been supported by right-wing, centrist and left-wing provincial political parties, while the BC NDP and the Ontario and federal conservative parties have opposed it.

This dissertation studies the emergence of carbon pricing mechanisms at the sub-federal level in Canada to answer two questions. First, why have some Canadian provinces adopted carbon pricing instruments, either a cap-and-trade or a carbon tax, while others have not? And, second, of the provinces that have adopted carbon pricing, how can we explain differences in the design of their carbon pricing instruments? In order to answer these questions, the dissertation has investigated the process of adoption of climate change policy in Canada’s ten provinces through four distinct stages: 1) the diffusion of the ideas supporting carbon pricing, 2) climate policy capacity building, 3) the public debate following the proposition of carbon pricing by the governing party, and 4) the design of the carbon pricing instrument. After reviewing the climate policy-making processes in the provinces, the dissertation’s answer to the first question is that carbon pricing instruments have been adopted in provinces in which the government has shown early on an acceptance of both the scientific paradigm of anthropogenic climate change and the policy paradigm of liberal environmentalism—the latter promoting market-based climate policy. These provinces are also the ones in which the premier has shown a personal commitment to the issue of climate change, which has contributed to focusing resources on the issue and to building climate policy capacity ahead of other provinces. Among provinces that have adopted carbon-pricing, climate policy is framed as providing important economic benefits through the creation of carbon markets and fostering investments in the renewable energy industry and other green technologies. The answer to the second question is that provinces, although to varying degrees, have designed carbon pricing instruments in order to take into consideration the particularities of their economic context and the policy preferences of their main industrial emitters. While some provinces, such as Quebec in imposing a cap-and-trade system, have been willing to go well beyond what their industries have been ready to accept, at least initially, others have adopted carbon pricing instruments designed to match closely the policy preferences of their most important GHG emitting industry.

There is increasing agreement in Canada that we need carbon pricing policies. Indeed, Quebec and British Columbia have forged ahead with carbon taxes, and the Liberal opposition has included a carbon tax in its most recent platform. One is tempted to simply point to the respective federal and provincial taxation powers for jurisdictional authority.However, and perhaps surprisingly, the taxation powers are not the optimal source of authority. This paper shows that both levels of government have authority to implement carbon taxes under various heads of power, depending on the measure’s design. Federally, carbon taxes could be justified under the national concern branch of the POGG power, and possibly under the criminal law, trade and commerce and taxation powers. While the property and civil rights power, taxation power and authority over natural resources might justify carbon taxes provincially, the licensing power offers the strongest source of authority. Analysis of Quebec and B.C...

2009

Among state and provincial climate-change policies in Canada and the United States, Alberta is a puzzling case. From 1992 to 2002, as it worked within the Canadian federal-provincial climate-change policy system, Alberta consistently advocated a voluntary approach. However, its policy changed in 2002, the same year Canada ratified the Kyoto Protocol over the objections of Alberta and other provinces. In October 2002, Alberta published a climate change plan which announced the intention of the province to regulate greenhouse gas emissions (GHG). In 2003, the Climate Change Emissions Management Act was adopted. Provincial regulations regarding intensity of GHG emissions from large firms became effective July 1, 2007. How can we explain this dramatic change in Alberta policy, in contrast to other Canadian provinces and US states? While a number of US states have enacted climate-change legislation, those actions, unlike Alberta, have generally been consistent with their previous positions on the issue. Within Canada, prior to 2008 when British Columbia announced plans to legislate, Alberta was the only province to introduce climate-change legislation. Why did one of the most carbon-intensive sub-national jurisdictions in North America not remain committed to a purely voluntary approach? The proposed paper studies this contrast between Alberta policy and that in all other sub-national jurisdictions in the two countries. The purpose is to identify the most important factors explaining Alberta’s unique policy, and thereby cast light on the larger subject of climate-change instrument choice.

Report prepared for Sustainable Prosperity, 2014

Key messages: • Market-based instruments (MBIs), either under the form of emissions trading or carbon taxation, have been increasingly popular in OECD countries and, in Canada, at the sub-national level. • Québec, Alberta, British Columbia and, to a lesser extent Manitoba, have all successfully adopted and implemented carbon pricing policies, while Ontario and Saskatchewan have proposed to adopt MBIs though implementation has not yet proceeded. • The implementation of MBIs began in 2007, after the Harper government decided not to implement any such instrument at the federal level, allowing provinces to experiment without creating redundant carbon pricing schemes. • Three important types of obstacles to the adoption and implementation of MBIs are identified amongst Canadian provinces: administrative obstacles associated with a lack of environmental and climate change policy capacity, political obstacles associated with the provincial party system and salience of MBIs during elections, and finally economic obstacles, especially the policy preferences of main provincial industries. • MBIs remain popular amongst Canadians and different strategies can be adopted to overcome obstacles to their implementation. Policy capacity can be secured rapidly through inter-jurisdictional cooperation and/or by using central agencies such as the ministry of finance or specialized regulatory bodies rather than environment ministries. In provinces where resistance to market-based approaches is more significant, a narrow-based carbon tax or limited form of emissions trading (such as credit-based emissions trading) can be implemented as a first step toward a more comprehensive and effective market instruments. These instruments can also be used to augment financial resources to increase climate change policy capacity or funding for new technologies that might, in the long run, help reduce compliance costs associated with more stringent MBIs.

Energy & Environment, 2001

A tracing and analysis of Canadian climate change policies and international negotiation positions over the past two decades reveals more than the complexity involved in the subject itself. Indeed, analysis suggests that “national circumstances” have consistently been the primary driver of Canada's climate change policy. These circumstances include a decentralized national policy system that necessitates broad governmental and stakeholder participation; a strong economic reliance on natural and energy-intensive resources and exports; a national sense of belonging to the land; and a tradition of leadership and brokering in international affairs. Canada's policies have been, and will continue to be, primarily driven by these national circumstances as negotiations and implementation issues around the Kyoto Protocol further evolve.

Global Environmental Politics, 2015

Why have only two of the eleven original members of the Western Climate Initiative implemented a cap-and-trade system? This article compares the implementation of cap-and-trade in California and Quebec versus in New Mexico and British Columbia. Ideas around the reality of anthropogenic global warming and the legitimacy of cap-and-trade created favorable context in three jurisdictions, although institutions condition the expression of these ideas in the policy-making process. Since parliamentary institutions concentrate power, elite consensus is more important in Canada, while in the United States public opinion plays a more significant role. However, ideational factors shaped by political institutions do not explain differences in cap-and-trade implementation. Growth in shale gas production, welcomed in British Columbia and New Mexico but resisted by Quebec and marginal in California, further explain different outcomes. Ideas, mediated by institutions, are the necessary prerequisite...

2014

Canada is a country often painted as a unifying power and an honest broker in world affairs. She has a respected history within the United Nations and a tradition of championing international norms, especially to curtail dangerous actions amongst the community of nations. From NAFTA to peacekeeping missions, she has carved a respected niche in global politics, perhaps fairer than her domestic situation warrants. Recent economic and environmental problems challenge this legacy of international cooperation and the rule of law with poor implementation of key international treaties. Environmental problems, in particular, have not translated into robust environmental policies even though Canadian identity is intrinsically woven with the concepts of nature and stewardship. The issue of climate change is a case in point: Canada was one of the earliest and most vocal supporters of the international climate change regime, and simultaneously, one of the world's largest greenhouse gas emitters per capita. The government signed the Kyoto Protocol to the UN Framework Convention on Climate Change (UNFCCC) with a commitment to lower emissions by 6% of 1990 levels; yet emissions rose by 19% by the end of the commitment period. The country appears to suffer from a Jekyll and Hyde syndrome: defending international norms and the rule of law whilst at the same time ignoring the very treaties she fought to create. This thesis explores how the federal Canadian government shifted from being an international leader to a laggard in the Kyoto Protocol; and in doing so it will explain the socioeconomic and political forces that shaped Canada's Kyoto strategy. A grounded theory research design was used, combining key informant interviews, policy document analysis, and participant observation. The case study raises important questions for a country such as Canada with lessons for climate politics both within the country and other federalist countries.

Ottawa Law Review, 2019

Jurisdictional tensions are nothing new in the Canadian federation, but recent provincial challenges to the constitutionality of Parliament’s carbon pricing policy come with very large stakes for Canadians. With renewed commitments to meaningfully reduce its greenhouse gas (GHG) emissions under the Paris Agreement, and details for how to do so set out in the 2016 Pan Canadian Framework on Clean Growth and Climate Change, Canada seemed poised to start taking the steps needed to address what can fairly be described as a very serious threat to Canada and the world. But effective climate policy requires action at multiple levels of government, and Parliament’s choice to require a base level of carbon price applicable in all jurisdictions has raised the ire of some provinces who believe this is outside Parliament’s jurisdiction. In this paper, I have examined three central issues that Saskatchewan and Ontario’s constitutional references will require the Courts to examine. First, I analyse the main basis of jurisdiction argued by Canada to justify the Greenhouse Gas Pollution Pricing Act (GGPPA), Parliament’s authority to legislate for Peace, Order and Good Government (POGG) under the National Concern branch. In particular, I address the argument made by the challenging provinces that conferring jurisdiction to Parliament over GHG emissions as a matter of national concern would displace provincial GHG emissions. I conclude that this argument is unfounded in light of recent jurisprudential approaches to the division of powers, proper characterization of the subject matter, applications of the double aspect doctrine, and the interpretative principle of cooperative federalism. While provincial concerns about federalism should not be minimized, there is ample constitutional space for provincial and federal legislation on GHG emissions to peacefully co-exist, especially when they are both aimed at the same broad goal of reducing GHG emissions. Second, I examine the prospects for justifying the GGPPA under the Emergency branch of POGG. In light of recent scientific evidence, there is a legitimate basis for qualifying the GGPPA as legislation addressing the global and national climate emergency. I examine the contours of the temporal limitation on the emergency branch, since it is through the temporary limit that courts justify this branch’s intrusion on provincial powers, and suggest that the window of time between now and 2030 may be the most appropriate timeframe for this power, given the Intergovernmental Panel on Climate Climate (IPCC)’s findings in its 1.5 degree report identifying this as the crucial timeframe within which to make the rapid, unprecedented changes needed to avert dangerous levels of climate change. Third, I consider a tension that arises when jurisprudential tests accustomed to dealing with regulatory charges that are aimed at offsetting regulatory costs are applied to a behaviour-modifying economic instrument, such as carbon pricing. While the courts have already recognized that behaviour-modifying measures can themselves constitute regulatory charges, thereby satisfying the jurisprudential test for finding a connection between a regulatory scheme and a charge, they have an opportunity in these cases to fill in the contours of this branch of the test. While the provincial challenges raise important questions about the balance of power in our federation, their arguments – if successful – would leave a gaping hole in Canada’s ability to enact a country-wide policy to reduce GHG emissions. While they may not like the policy choice Parliament made in using carbon pricing, the choice of policy itself is not under scrutiny. The heart of the matter is whether Parliament has the jurisdiction to enact the GGPPA. My article concludes that the legislation is intra vires. The fact is that meaningfully reducing GHG emissions is going to require some difficult choices. But the difficulty is already here, being felt in floods, fires, droughts, extreme storms, and melting permafrost. Our future depends on the Courts recognizing that the Constitution is equipped with the flexibility and adaptability needed to enable the country to legislate an effective, full response to an issue with such grave repercussions as climate change, without leaving any cracks through which Canadians’ futures could fall.