File: Notleys gamble_v.

3
Folder: NDP
Updated: May 3, 2016
Word Count: 920

Notleys Climate Change Gamble

Rachel Notley may not go to Vegas for her holidays, but that doesnt
mean she is not a gambler. Her Go Big, Go Early climate change
strategy is best understood as making three big bets about what will
happen in the coming years.
Bet number one is that by going big and going early, she can pre-empt
Prime Minister Trudeau from imposing an even more damaging national
cap and trade program. A national cap-and-trade would quickly
become yet another transfer program for moving Western dollars to
Eastern voters. Dirty oil and coal provinces like Alberta and
Saskatchewan would have to purchase credits from clean Quebec
and other hydro-rich provinces.
So far Notley seems to be winning this bet. Thanks largely to
Saskatchewan Premier Brad Walls outspoken opposition, Trudeau
failed to achieve a consensus in support of any new Federal carbon
plan at the First Minsters conference in Vancouver in March.
But its still too early to say for sure that this wont happen. Trudeau is
under pressure from the Green lobby for a federal plan. Equiterre, the
Pembina Institute, and Environmental Defence have warned that the
Albertas new policies are good, but not good enough. They are calling
on the Trudeau government to move quickly [to] establish minimum
standards on carbon pricing [and build] a coherent and ambitious
national plan. Like his fathers National Energy Plan, there would be
plenty of votes in Eastern Canada for a second Trudeau NEPa
national emissions program.
Premier Notleys second bet is that by imposing a $5 billion/year
carbon tax, replacing coal with wind and mandating a hard cap on
oilsands emissions, her new Green Alberta will win social license in
the rest of Canada for the desperately needed new oil export pipelines.
So far, there is little evidence that this is working.
Post the Paris COP 21 international agreement to cap carbon
emissions, Greenpeace Canada, the Council of Canadians and 60 other
environmental groups called on the NEB to suspend the Energy East
application process, calling it a complete fiasco. Two months later, 70
ENGOs announced their opposition to ANY new pipelines. That same
week, Denis Coderre, the mayor of Montreal, and 30 other municipal
officials declared their opposition to the proposed Energy East pipeline.

On the other coast, BC Premier Christy Clark has declared her

continued opposition to the expansion of the Kinder-Morgan pipeline.
This is not surprising. British Columbians opposition to new export
pipelines is driven by fears of disastrous maritime oil-spill. As SFU
professor Mark Jacard has observed, The battle is not a rational battle.
Its a symbolic battle. Its I love my pristine BC coast, and I love my
beaches in Vancouver. How can you do anything for me that gets
Alberta rich and I take the risk?
At the end of the day, approval of new export pipelines is clearly a
federal responsibility. What will count is Mr. Trudeaus position. To date,
that has been decisively ambiguous. He has declared that he will be a
neutral umpire but not a cheer-leader for new pipelines. The only
action he has taken has been to make the moratorium on oil tankers
off the Northern BC Coast permanent and to add new conditions to
the NEB process for pipeline approval. The tanker moratorium appears
to be the final nail in the coffin for the Northern Gateway pipeline. The
new NEB directivesenhanced aboriginal consultation and assessing
the impact of new pipelines on upstream and downstream emissions
both further complicate and slow the approval process.
Trudeaus ambivalence and indecision are not surprising given his
circle of advisers. Minister of Foreign Affairs Stephane Dionne, a
longtime advocate of a national carbon tax, chairs the Liberal Cabinet
committee on climate change and environment. Gerald Butts,
Trudeaus Principal Secretary and close personal friend, was formerly
CEO of World Wildlife Fund Canada and an anti-pipeline activist.
So will Premier Notley win her bet on social license? Will Trudeau have
the stomach to go toe-to-toe against David Suzuki, Green Peace,
provincial politicians in B.C., Ontario and Quebec, and maybe even his
own advisors?
Notleys third and final bet is that in the near future other oil and gas
producing states and provinces will adopt similar carbon reduction
policies. This is critical to prevent carbon leakage. Carbon leakage
occurs when one jurisdiction raises the cost of carbon emissions,
thereby giving a neighboring jurisdiction with lower carbon costs a
competitive advantage in attracting investment. When this happens,
there is no net decrease in emissions, as the reductions in the first
jurisdiction are offset by increases in the second.
Notleys Climate Change Panel Report explicitly warns that, Alberta
cannot act alone. Without comparable actions from peer competitor
jurisdictions, Alberta will be significantly disadvantaged with

production and the prosperity and employment it brings simply shifting

to other jurisdictions without stringent GHG policy.
So who are Albertas peer competitor jurisdictions? At home it is
Saskatchewan, where Premier Wall has been Canadas most vocal
opponent of any unilateral new carbon tax. Across the border, its the
top-ten oil and gas producing U.S. states, of which only one, California,
has anything resembling a carbon tax. Indeed, most of the others have
joined a lawsuit to block President Obamas executive order to
expedite the closing of Americas coal-fired electricity plants. Suffice it
to say that such states as Texas and Wyoming will not be imposing
carbon taxes any time soon.
To conclude, Rachel Notley may not be a gambler, but she is definitely
gambling with Albertas future. At this point, the odds dont look good.