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B.C. must boost carbon tax, axe policies that ‘undermine’ it: economists

SFU economist with Ecofiscal Commission hopes new government will change course on carbon pricing.

Simon Fraser University public policy professor Nancy Olewiler is an economist and member of the Ecofiscal Commission.

Jennifer Gauthier / Metro Order this photo

Simon Fraser University public policy professor Nancy Olewiler is an economist and member of the Ecofiscal Commission.

A Vancouver economist has some carbon-curbing advice for a new provincial government — likely one led by B.C. NDP leader John Horgan backed by the Greens, unless of course a new election is called.

According to Simon Fraser University public policy professor Nancy Olewiler, whoever runs B.C. after the Legislature returns on June 22 would be wise to consider a study released Thursday by the cross-country Ecofiscal Commission, of which she’s a member.

“Because we’re going to have a new government, this is a perfect opportunity to look at these issues again,” said Olewiler told Metro in a phone interview. “Horgan promised in his campaign that he would start the whole carbon greenhouse gas policy again, so we’re hopeful these issues would be addressed going forward.”

Those issues are outlined in a new report, Supporting Carbon Pricing, which crunched some financial numbers of Canada’s promised national carbon reduction framework, announced last December, and identified a number of "gaps" that won't be properly addressed.

The report praised the federal plan, but found that a carbon tax — like the one first introduced in B.C. under ex-premier Gordon Campbell — may not be enough. And contrary to the B.C. Liberals’ vow to freeze it at current levels, the economists urged it continue to rise gradually and “predictably” to help, not hurt, the economy.

But additionally, some greenhouse gas-intensive activities may not be adequately addressed without additional efforts, Olewiler said. That means “non-pricing” policies are still needed.

Previous such policies, from the pre-carbon price era, must be scrutinized for whether they might actually be financially unsound — or even counteract the carbon-curbing benefits B.C. has made through its tax.

“We think a carbon price in B.C. is a core part of any GHG policy, but there are other reasons you might want to consider non-price policies,” Olewiler said. “There are emissions that we just can’t get a price on, an example are fugitive emissions from pipelines or methane leaks (from liquefied natural gas) — they’re not burning carbon, but they’re putting carbon into the atmosphere. Landfill or forest carbon sequestration, you can’t tax those either.”

The Ecofiscal Commission advised governments that the “best additional policies complement carbon pricing,” and are carefully monitored for lowering costs while being effective at cutting emissions.

“But simply adding more climate policies to the mix will not necessarily improve performance,” the report warned. “Smart policy makes both environmental and economic sense.

 “The emergence of pan-Canadian carbon pricing as a policy norm creates an important opportunity to shift toward more cost-effective policy by clearing the books of some older and higher-cost regulations and subsidies.”

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