What Trudeau needs to do to woo the West

In the polarized swamp of Canada’s energy and climate debate, finding common ground is neither easy nor particularly satisfying for the partisans on either side of the political battle.

With the Liberal party being shut out in Alberta and Saskatchewan in last week's election, combined with the deep sense of anger and alienation felt by a large number of people in those two provinces, it's clear Prime Minister Justin Trudeau must find ways to work with their premiers and their leading companies.

The onus is not on the prime minister alone, contrary to some of the post-election rhetoric from the Prairies. Alberta Premier Jason Kenney and Saskatchewan Premier Scott Moe need to recognize that 63 per cent of Canadian voters cast ballots for parties that promised even tougher action on climate change than we’ve seen to date. Modest, grudging action on emissions is not an option.

Trudeau promised during the election campaign that Canada would increase its climate action. The goal is to exceed the country's target of reducing emissions by 30 per cent from 2005 levels by 2030, and be on a clear track to achieve net-zero emissions by 2050 at the absolute latest.

Those targets will be impossible to achieve if there’s failure to take serious climate action in the most greenhouse-gas-intensive provinces, or if there is unbridled emissions growth in the oil and gas sector. But there are ways to reduce the political heat temper and focus on the areas where agreement is possible if there is some goodwill from all sides.

Trudeau will have to pursue a multi-pronged approach to address the seemingly contradictory realities: the urgent need to reduce emissions, and the uneven cost that effort imposes across the country.

After the election, he reiterated his promise to complete the Trans Mountain pipeline expansion. His government also must work with both its provincial counterparts and industry on technological innovation that reduces GHGs across the fossil-fuel supply chain — from extraction to processing to combustion.

At the same time, the Liberal government will have to focus on reducing emissions in the buildings, transportation and industrial sectors, and demonstrate to Prairie residents that climate action is a countrywide undertaking. (Which is not the same as saying the industry should be let off the hook.)

A recent report for the Council for Clean Capitalism urged the federal government to undertake a massive investment program that would help all sectors of the Canadian economy adopt technology that can dramatically reduce carbon emissions — whether through energy efficiency or transitioning as quickly as possible away from hydrocarbons to heat homes and transport people and goods.

While there would be real challenges in implementing such a plan, it speaks to an urgency and level of commitment that this country has not yet seen.

We tend to focus on — and argue over — the supply side of the energy equation, especially oil and gas versus renewables. The demand side requires far more attention. There is a vast amount of progress that can be made in improving our national efficiency and reducing energy consumption, thereby saving businesses and consumers money over the medium term.

The council — whose co-ordinator, Toby Heaps, runs Corporate Knights magazine — concluded that technological investment in the oil and gas sector would yield some of the biggest reductions in GHGs per dollar spent. The oilsands sector is already allocating more than $1 billion a year to reduce its energy costs and, as a result, its GHG emissions.

The result to date has been incremental “intensity” improvements for existing production and more significant progress on new projects. Some companies even suggest they could produce crude with net-zero emissions in the future. These are “aspirational goals.” Skepticism is in order until there is more evidence they can be realized.

Still, the Liberal government has promised to recycle revenues from the large-industry part of its carbon tax back to companies to help them make such investments. It pledged tax breaks for companies that can achieve net-zero energy production. The combination of a rising carbon tax — buttressed by some regulations — and revenue recycling could prove to be a powerful incentive for companies to speed up their efforts to dramatically reduce emissions from their operations.

That includes support for carbon capture and storage. CCS is a much-scorned technology among climate-change activists, but the United Nations Intergovernmental Panel on Climate Change (IPCC) has concluded it is an important tool for achieving the goal of limiting the increase in average temperatures to 1.5 C or even below 2 C.

Canada already hosts several CCS projects and can create conditions for even more progress in that technology.

Among those conditions would be a steadily rising price on carbon and/or a declining regulatory cap on emissions. Unlike conservative premiers, the country’s largest companies have all endorsed the use of an economy-wide carbon tax.

Efforts to reduce emissions from the oil and gas sector would complement, not compete with, the broad goal of transitioning the electricity sector, the country’s building stock and its transportation sector off fossil fuels as quickly as possible.

With its widely dispersed rural and Indigenous population, Canada could be a world leader in efforts to eliminate energy poverty through an approach that combines energy efficiency and renewable sources. Such efforts, which are being pursued by groups like the Indigenous Clean Energy Network, are needed across the country, including in the northern parts of Alberta and Saskatchewan.

Any discussion of areas for potential co-operation cannot dispel the reality that clash is inevitable, even beyond the well-worn battle over the carbon tax.

With regards to the carbon tax, Alberta has proposed to keep a levy on large emitters but will not match the federal government’s increase to $50 a tonne by 2022. And so the Liberal government promises to impose its own version, starting with consumers on Jan. 1.

The federal government has passed regulations to reduce methane emissions in the oil and gas sector. Alberta passed its own regulations and wants Ottawa to back off, though environmental groups insist the provincial rules won’t achieve the reductions Ottawa demands.

The Liberals are vowing to enforce a 100-megatonne cap on emissions from the oilsands if Alberta won’t do so. The limit was set in legislation by the former NDP government in Alberta, but no regulations were put in place to enforce it. While the industry does not expect to hit the cap for a decade, there are enough projects that have regulatory approval to blow through it, should they all proceed.

The Liberal government must also decide whether to approve Teck Resources Ltd.’s $20-billion Frontier oilsands mine. A joint Alberta-federal review panel concluded in July that the open-pit mine would be in the national interest despite significant adverse environmental impacts, including GHG emissions. Rejection from the federal government would provoke further anger in the province.

Construction of the Trans Mountain expansion will not be enough to satisfy the market’s demand for new pipelines. If either of the U.S.-based projects — Keystone XL or Enbridge’s Line3 expansion — are completed, that should take some heat out of the pipeline debate for a few years at least.

Trudeau is now working on how to ensure Alberta and Saskatchewan are represented in his government. He is also considering the makeup of his cabinet. Catherine McKenna personified Liberal climate policy that was widely reviled on the Prairies; she’ll likely be given a new post. The prime minister would be pouring oil on the fire if he appointed in her stead the newly elected star candidate from Quebec, Steven Guilbeault, who was formerly of Greenpeace and a founding member of Montreal’s Equiterre.

After winning only a third of the popular vote, Trudeau cannot claim that he won a strong mandate. However, another 30 per cent of voters opted for parties that pledged more ambitious climate policies.

Despite anger in the West, Trudeau can’t shrink from urgent action. He needs to find common cause on the Prairies with industry, with municipalities, with Indigenous communities and, where possible, with conservative premiers.