Carbon cap a possibility in Canada's election

Canadians head to the polls today to determine whether Prime Minister Stephen Harper will keep his job or be replaced by a new leader in favor of carbon pricing.

The result of the national election could determine whether Canada dramatically changes its climate policy and moves ahead of the United States in enacting a cap-and-trade system. It also could change how much money the national government invests in energy efficiency, renewable and coal projects.

"There are big differences between the parties when it comes to clean energy," said Clare Demerse, acting director of the climate change program at the Pembina Institute, a Canadian environmental think tank.

Harper's Conservative Party is facing an unexpected surge in the polls by the left-leaning New Democratic Party, or NDP. Prior to the surge, the Liberal Party was considered Harper's main threat.

While many analysts predict that Harper's Conservative Party will win, there is wide speculation in Canada whether the expected strength of the NDP tonight could lead to a quick collapse of Harper's government via a required no-confidence vote after the election. That could lead to a new coalition government of the NDP and the Liberals, with both of those parties favoring a national carbon cap.


Under the Canadian system, the leader of the party with the most seats in Parliament on election night typically becomes prime minister. However, Harper could be vulnerable to the no-confidence vote scenario after the election if his party wins the most seats in parliament, but not an outright majority.

Harper has followed U.S. lead

Harper's Conservative Party vowed in its platform released in April to continue tying Canada's climate policy to the United States'. That stance has angered many environmentalists because it takes emissions caps off the table (ClimateWire, March 29).

Both the United States and Canada have targets of reducing greenhouse gas emissions 17 percent below 2005 levels by 2020, and Harper's conservatives have said the parallel goals make sense because of the intertwined nature of the two economies.

"Unlike the previous Liberal government -- which signed grand international accords but took no action -- our Government has a climate change plan, and it is working," the platform states.

Since then, Harper has been more aggressive in attacking his opponent's climate policies by claiming that the New Democratic Party's cap-and-trade plan would raise gas prices 10 cents a liter, citing statistics from Canadian economist Jack Mintz. (There are 3.79 liters in a gallon.) Officials in Alberta also have criticized the prospect of a cap-and-trade system because of its potential to penalize the province's oil sands region, where production of oil is more carbon-intensive than traditional oil drilling.

The policies of the NDP would "destabilize a lot of the oil and gas industry," said Mike Monea, a vice president at SASKPower. "It's making people nervous."

Parties differ on cap-and-trade plans

The NDP, led by Jack Layton, has fought back against the 10-cents-a-liter claim from Harper about cap and trade. At a campaign stop Friday, Layton said big global corporations "are going to try to scare Canadians -- to say, 'If you try to do anything about pollution, we're going to make you pay.' That's exactly what they said when we dealt with the issue of acid rain and sulfur emissions," according to The Globe and Mail.

The cost of the NDP's climate plan on gas prices would be closer to 4 cents a liter, said Demerse, who does not have a position on the candidates.

There are unanswered questions about the design of a cap-and-trade system if the NDP were to take power. It likely would have to form a coalition government with the Liberals, who support a similar carbon cap but one with a different design. Those differences would have to be worked out in the event of a Harper defeat.

The NDP, for example, wants to enact a cap-and-trade system in Canada quickly, with projected revenues from such a system coming in this year. There are differences between the parties, as well, on how much of industry would be covered under such a plan.

Many analysts say that Layton will be under pressure to follow policies laid out in detail in a campaign platform in case of a victory. The NDP election blueprint, for example, offers a swirl of numbers about its plans, including calls for a carbon price floor of $45 a metric ton.

"If the NDP wins, they likely would have to move forward with a cap, considering what's been said in the campaign," said Andrew Leach, an assistant professor at the University of Alberta.

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