Environment Committee on Jan. 28th, 2019

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

You actually fed into exactly the direction I wanted to go next. Given the plan that we have put forward as a federal government, do you feel that we have taken a balanced approach among a price on pollution, the fee dividend, the rebate model, investments in transit, investments in innovation, having a more balanced regulatory regime, and emissions control, with all of those operating in conjunction? I think over 50 measures are being taken to address our GHG emissions.

One, do you feel that is the right approach to take? Two, you mentioned earlier that internationally they are looking to Canada's model and saying, okay, if this is successful, it gives others an incentive to follow the same model; but if we blow this up in the next few years, it's a total disincentive to those. Do you feel that it's the balance we've achieved that makes it such a great and important model to the rest of the world?

[Dale Beugin]

I think it's a solid approach that minimizes costs and relies on carbon pricing. I think it could go further. I think the economists of the Ecofiscal Commission might argue for even more reliance on carbon pricing and even less reliance on other instruments.

That being said, I think it does take a balanced approach to managing the costs, managing the emissions reductions, and taking a leadership role.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Would you agree that it's an evolution, not a revolution? If you tried to do it all in one shot.... As I think I've heard many times from many economists, it is the actual progression of that price that is vitally important over time to reach the point that achieves your targets.

[Dale Beugin]

Yes. I think you want to—

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

I see Mr. Rivers nodding his head.

Would you like to comment, please?

[Dr. Nicholas Rivers]

I think that's bang on: You recognize the fact that it's not any one year's emissions that are causing the problem. It's the cumulative emissions over time that are causing the problem. We want an approach that targets our cumulative emissions over time, which means sending a long-term signal to the economy that we're on a decarbonization pathway.

At the same time, we want to avoid any really adverse shocks to the economy. We want to build up slowly, but build up to a really strong policy over time.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Thank you.

That leads to a further point. We've heard others refer to the concern around the impacts it will have on our economy. Would you agree that because companies have this clear price signal over a long period of time, the investments they make will actually increase their productivity and increase their innovation, therefore leading to stronger companies that will be more competitive in the long run?

[Dale Beugin]

I think expectations of future carbon prices are exactly what businesses want. They want certainty to make those long-lasting investment choices and to know how they will pay off. I think there's also an expectation that carbon constraints elsewhere are only going to increase as other jurisdictions start to get moving, get more aggressive in how they move, and maybe even begin to impose their own border measures.

In short, getting ahead of the curve and reducing emissions more now rather than later can improve Canada's competitiveness in a carbon-constrained world.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Mr. Leach, I see you nodding your head as well. Maybe you or Mr. Rivers would like to add to that.

[Dr. Andrew Leach]

The piece I would add is that it's not just about other countries having carbon constraints but about where your capital is coming from. That's something we've seen in many aspects in Canada—the pressure we're under internationally to lower our emissions, improve our performance, etc., and the tying of that to access to capital. Internationally and domestically, you're seeing major funds develop sustainable investment policies and remove their investments from emissions-intensive sources. The more we're seen as being at the forefront in innovating, the more we're going to have access to capital.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Mr. Rivers, go ahead.

[Dr. Nicholas Rivers]

So your question is about economic growth and carbon pricing.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Yes, and the impacts.... I mean, maybe you say it's going to impact our businesses and they're not going to be able to compete on a level playing field.

[Dr. Nicholas Rivers]

Right. My view is that carbon pricing is pretty much a wash for the economy overall. It's not going to make us a lot bigger and it's not going to make us a lot smaller. I think it will increase the growth in cleaner sectors in the economy and reduce it in less clean sectors of the economy, but for the economy as a whole and for workers as a whole, it will be a wash.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

From an innovation standpoint, does it force an economy to innovate?

[Dr. Nicholas Rivers]

I don't think there's a lot of evidence that it's going to increase the total amount of innovation activity in the economy, but it will redirect it towards clean activities. It won't cause a growth in the number of scientists or a growth in the number of patents, but it will redirect scientists and patenting activities towards lower-carbon ones.

[The Chair]

Thank you.

Mr. Warawa, it's over to you.

[Mark Warawa]

Thank you. It's been a very interesting discussion.

I agree with a number of things that have been said by the panel, but not with the ultimate conclusions. It's interesting that we see the same evidence and we come up with different conclusions .

We do have a changing climate. It's anthropogenic. What's the solution? I think we would all agree that if we do not have buy-in from all the major emitters, it is not possible, globally, to reduce our carbon footprint to have an effect—the effect that we want. Would you all agree that globally we need to reduce our greenhouse emissions as a starting point?

[Dr. Nicholas Rivers]

I'm going to go back to what Dale said a minute ago. I think you have it the wrong way around, personally. To me, you don't get a global agreement and then have each country going to reduce emissions—

[Mark Warawa]

But you're missing the.... I'm not going to get into a debate with you, Mr. Rivers—

[Dr. Nicholas Rivers]

To me, that kind of global consensus around emissions reduction is going to come from the bottom up—

[Mark Warawa]

I'm going to ask you to be quiet now because I have the floor. We're not in a debate.

The question was, do we need to have a global reduction in greenhouse gas emissions to meet our global targets? The answer is yes. How do we get there? Do we get there by Canada doing its fair share? Absolutely.

[Mark Cameron]

Absolutely.

[Mark Warawa]

Is Canada already doing its fair share? Absolutely.

[Mark Cameron]

No.