While a recent editorial in the Globe and Mail called for Canadian governments to “stop” at the introduction of a national carbon price, facts and arguments coming from the Ottawa-based Broadbent Institute and U.S. Energy Information Administration point to a more vigorous policy approach to climate change.
The Globe’s editorial argued that the Ontario government, which recently announced an ambitious climate plan for the province, “could have simply brought in a carbon price and stopped there.” Echoing market fundamentalism, it argued that the province should “have left it up to millions of people and businesses to figure out, through billions of little and big choices, how to most efficiently reduce their individual fossil fuel costs and consumption.”
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“This is a policy [recommendation] based on a narrow and ultra-orthodox reading of neoclassical economics,” shot back Broadbent’s Brendan Haley in a blog posting, “and it is good that Ontario did not limit itself to carbon pricing.”
Carbon pricing is a highly visible measure, Haley explained, but it’s “politically constrained”, with potentially effective price points often unpalatable to influential economic actors. Chasing the lowest-cost carbon reductions first, moreover, could lock society into technologies such as natural gas that are incompatible with long-term decarbonization goals.
The ideological belief that less government will produce more consumer choice is false, Haley adds. Incumbent monopolies like energy utilities, and existing regulations like building codes, can actively hinder the adoption of new, disruptive technologies. Targeted subsidies and other measures beyond carbon pricing are more effective at providing consumers with an early choice of new energy sources.
Meanwhile, a separate report from the U.S. Energy Information Administration supports the case for broader public investment in the clean energy transition. It finds that maintaining a variety of existing U.S. tax credit subsidies for solar and wind generation, beyond their legislated expiry dates over the next five years, would lead to that country generating 1.2 trillion kilowatt-hours of renewable energy in 2040. That’s nearly one-third more than the 950 billion kWh that would be produced by then without tax credits. (h/t to Vox for pointing us to the Broadbent Institute blog)