The proposed US climate deal should persuade Ottawa to step up its game, experts say

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The massive climate and tax deal announced by US Senate Democrats this week should inspire Ottawa to take a bolder approach to tackling climate change, some experts say.

The $369 billion deal unveiled Wednesday came as a surprise after previous versions of President Joe Biden’s proposal failed to get the approval of reticent Democratic Senator Joe Manchin of West Virginia.

Manchin now says he could support a scaled-down version of the plan — which would still be by far the most ambitious set of climate change programs in US history, if adopted.

The package includes massive investments to help create new clean energy sources, increase production and sales of electric vehicles, and compensate low-income communities hardest hit by the impacts of a warming planet.

“It raises the stakes for Canada,” said Lisa Gue, national policy manager for the David Suzuki Foundation.

“I hope this will inspire the Canadian government to review our climate policies and perhaps look at ways to increase investment.”

How Canada could build on a ‘shy’ approach

Both the US and Canada aim to reduce greenhouse gas emissions by 40 percent below 2005 levels by 2030. But the two nations are taking different paths towards that goal.

The cornerstone of Ottawa’s approach is a federal carbon pricing system that will skyrocket from the current $50 per tonne of emissions to $170 by 2030 to push consumers toward cleaner energy sources.

In the US — where a federal carbon tax was never considered feasible for political reasons — the Biden administration is instead trying to eliminate emissions, investing its way into the transition through huge investments in green technologies.

The government’s plan provides new tax credits for zero-emission power plants and for companies that produce green technologies such as solar panels, wind turbines and batteries.

It’s an aggressive tactic that should play a bigger role in Ottawa’s strategy, said Eddy Pérez, manager of international climate and diplomacy at Climate Action Network Canada.

“When it comes to large investments in decarbonization, we are very cautious,” said Pérez.

Democratic US Senators Chuck Schumer (left) and Joe Manchin on Wednesday announced their plans to approve a $369 billion climate and tax deal. (J Scott Applewhite/The Associated Press)

By increasing direct investment in emissions-reduction technologies, Pérez said, the US government could present the fight against climate change as a “public service” — which could also raise the expectation of public accountability when initiatives are introduced.

“Here the United States … is saying to Congress and the public, we have a role to play in unlocking the array of climate investments that will take us to the 40 percent target,” he said.

Per capita climate-related investment in the proposed U.S. plan is about three times higher than climate investment in Canada’s 2022 federal budget, Gue said.

EV rebates, helping marginalized communities

The US approach also offers new tax credits designed to accelerate the adoption of North American-made electric vehicles.

US customers earning less than $150,000 annually would be eligible for $7,500 per new vehicle.

In Canada, customers can receive purchase incentives of up to US$5,000 when purchasing a new electric vehicle.

Washington’s plan also provides tax incentives for a wide range of vehicle prices. Electric passenger cars priced under $55,000 and pickups, SUVs and vans priced up to $80,000 would all qualify.

In Canada, passenger vehicles are subject to the same $55,000 limit, but larger vehicles must have a base model price below $60,000 to qualify.

However, the US stimulus only applies to vehicles produced in North America, while the Canadian program does not take into account a vehicle’s place of manufacture.

A close-up of a hand holding a charger plugged into the charge port of an electric vehicle.
US customers will have access to more generous EV rebates than Canadians if the Biden administration’s plan is approved. (Gavin Simms/CBC)

Ottawa should look to the more generous US incentives as the start of healthy competition to see which country can get more electric vehicles onto North American roads, the experts said.

“I think this is a race up, not a race down,” Guo said.

The US climate deal also earmarks about $60 billion for environmental justice programs designed to support low-income and communities of color.

Researchers have said that these communities are being disproportionately affected by climate change for a variety of reasons, including Pollution near ports (which tend to be closer to these communities) and lack of access to safe shelter and food.

“This was a blind spot for Canada and something we can definitely look to the US and build on,” Guo said.

The US action is a “welcome development,” says the minister

In a statement to CBC News, Environment Secretary Steven Guilbeault welcomed news of the US deal but did not outline any additional measures Ottawa would consider once the plan is finalized.

“The news of the … historic US climate and energy bill is a very welcome development for Canada,” Guilbeault said in the statement.

“This agreement shows that both our climate and our economies can only benefit if Canada and the United States work together,” said Environment Secretary Steven Guilbeault. (Adrian Wyld/The Canadian Press)

“It strengthens our government’s approach to the transition to cleaner forms of energy, which is already creating new economic opportunities.”

Critics say that neither Canada nor the US should be satisfied with their current approaches, arguing that both nations’ climate plans are too lenient with the pollution-intensive fossil fuel industry.

The Intergovernmental Panel on Climate Change has also urged nations to “At least halve emissions by 2030“to avoid the catastrophic effects of a warming climate — a goal that surpasses official plans in Ottawa and Washington.

“On both sides, the United States and Canada, this is the bare minimum,” Pérez said.

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