Oct 8, 2013

Time to redesign BC’s GHG policy


No matter where you stand on GHGs and climate change, one thing is very clear. British Columbia GHG policy is a mess. It is not just that GHG reduction targets were legislated without any credible plan to achieve them and, given our current industrial strategy, little prospect of doing so. It is the complete lack of consistency and limited effectiveness of the GHG reduction measures we now have in place that needs to be addressed.

Where it was convenient to impose tough GHG restrictions, the government did so without regard to fairness or cost. So, GHG offset requirements were imposed on relatively low GHG-emitting schools, hospitals and other government entities, not only squeezing already constrained budgets but in many cases causing the government agencies to pay twice for their GHG emissions — first through the carbon tax in their purchases of fuel and then again through the mandatory offset fee. In the meantime no GHG cap or offset requirements were imposed on large industrial emitters.

As for BC Hydro, another relatively low emitter of GHGs but nonetheless an easy target, the government imposed GHG offset requirements plus strict limits on the amount of its gas-fired thermal generation. It specifically ruled out any use of the Burrard thermal plant to back up the hydro system despite the severe economic consequences that has had. The estimated cost of avoiding the relatively small amount of GHG emissions at Burrard is in the hundreds of dollars per tonne of CO2 — 7 or more times greater than the $30/tonne carbon tax.

Despite the costs it felt justified to impose on BC Hydro, the government has exempted the LNG industry from any restrictions on gas-fired thermal generation. Nor are there any offset requirements.

We do have the much touted carbon tax. But as well as exempting a significant amount of industrial emissions, what sold that tax was its revenue neutrality. Instead of the carbon tax revenues being invested in additional reforestation, transit, energy conservation or other offset measures, they were used to reduce income taxes. It has had some positive effect, but not nearly what it could have if it was aimed at carbon neutrality in the direct and indirect energy choices we make.

In sum, what we have are targets with no credible implementation plan, no consistency and limited effectiveness in the suite of ‘clean’ measures that have been imposed.

Clearly a new strategy is required.

My own view is that instead of holding up targets that will not be achieved, with measures that are neither fair nor effective, we should redesign GHG policy to impose clear and consistent GHG obligations and costs across industries and sectors. For large industry this could include emission caps based on best available technology, with opportunities to invest in offset measures to be able to meet the GHG caps in the most cost-effective way. For households and small emitters this would include continuation and possible increase in the carbon tax, with revenues increasingly being used to invest in cost-effective offset measures available throughout the province.

The amount of reductions we achieve would depend on the severity of the obligations and costs B.C. would willingly, consistently and transparently impose. Some might say that would be a plan without specific targets. Perhaps, though in my view that is far better than what we have now– GHG targets without a plan.

Topics: ,