Bloomberg
(Bloomberg) -- Just a few months ago, the U.S. government wasn’t participating in a global treaty to reduce harmful gas emissions, and legal challenges were threatening to kill a carbon tax imposed by the Canadian government as the centerpiece of its effort to reach net-zero emissions by 2050.Now, everything is different: Joe Biden is in the White House promising to restore America’s global leadership on climate, and the Supreme Court of Canada has blessed the carbon tax championed by Prime Minister Justin Trudeau.To Canada’s environment minister, Jonathan Wilkinson, the path is now clear for North America to take big steps to mitigate climate change. Biden and Trudeau both plan to present new, more aggressive emissions targets at the U.S. Earth Day Summit starting April 22.“The calls are far more aligned,” Wilkinson said in an interview, describing interactions between the two governments. “I don’t want to speak ill of the Trump administration, but certainly there is a common perspective as we look forward.”The breakthrough in Canada was the top court’s 6-3 ruling on March 25 that said Parliament had jurisdiction to impose a tax on emissions in an effort to decarbonize the economy. Under that law, companies must pay a minimum of C$40 ($32) for every metric ton of carbon they emit, with the price moving up gradually to C$170 by 2030. Provinces can decide to charge more. Consumers are also taxed on the purchase of products that generate carbon.Differences over how to lower Canada’s emissions have created discord between the ruling Liberals and regional governments, especially in energy-rich Western provinces. Ontario, Alberta and Saskatchewan filed the lawsuit against Trudeau’s carbon tax.It’s unclear what the holdout provinces will do now that their legal challenge is dead. On the day of the Supreme Court ruling, Alberta Premier Jason Kenney chastised “Ottawa elites” and said they didn’t respect Western Canada. “We will continue to fight for our provincial power,” he said, without explaining further.Wilkinson says the law accounts for long-haul transportation and other carbon-reliant realities of rural life by providing a 10% tax supplement for people in small and rural communities.“It’s not about rural versus urban because there is a top up for rural Canada,” said Wilkinson, a former executive for clean-energy companies. “It’s people who have 5,000-square-foot houses and drive a Hummer. It’s people who actually have those kinds of lifestyles and they are creating more pollution.”Carbon pricing was devised as a way to account for the public cost of emissions from heat waves, droughts and rising sea levels, while also providing a financial incentive for companies to reduce emissions. It’s used in 40 countries, according to the World Bank, including European Union nations, Australia, Japan, South Korea and, notably, Mexico.Mexico is still a work in progress on climate, Wilkinson said. “I think the Mexicans need to enhance their level of ambitions,” he said, noting that he thought the same was true of the U.S. and Canada, despite their pledges to be net-zero by mid-century.On Mexico, Wilkinson said, “I will tell you that it probably has not been as active a conversation until very recently. Under the Trump administration that trilateral discussion was not as dynamic. I think that we are seeing now that there is a lot more interest in engaging in a broader North American conversation on climate.”At the summit, Biden is expected to announce a hastening of U.S. climate goals, including a possible 50% reduction to greenhouse-gas emissions by 2030, nearly double the U.S.’s previous commitment. The U.S. and Canada are also considering new stimulus legislation that would devote tens of billions of dollars to fighting climate change.To Wilkinson, it all shows that the continent is now aligned on environmental policy and ready to act.“There is a sense at times, I think, that where people say ‘Where have you been for the last five years?’” Wilkinson said. “The Americans have not been part of this conversation.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
