Carbon Tax / en Without changes, Scheer's climate plan will be expensive or ineffective: ¸ŁŔűĽ§×ÔÎżexpert /news/without-changes-scheer-s-climate-plan-will-be-expensive-or-ineffective-u-t-expert <span class="field field--name-title field--type-string field--label-hidden">Without changes, Scheer's climate plan will be expensive or ineffective: ¸ŁŔűĽ§×ÔÎżexpert</span> <div class="field field--name-field-featured-picture field--type-image field--label-hidden field__item"> <img loading="eager" srcset="/sites/default/files/styles/news_banner_370/public/andrew-scheer--weblead.jpg?h=afdc3185&amp;itok=OmSvdFDm 370w, /sites/default/files/styles/news_banner_740/public/andrew-scheer--weblead.jpg?h=afdc3185&amp;itok=vUFifFuc 740w, /sites/default/files/styles/news_banner_1110/public/andrew-scheer--weblead.jpg?h=afdc3185&amp;itok=qGxmWwY3 1110w" sizes="(min-width:1200px) 1110px, (max-width: 1199px) 80vw, (max-width: 767px) 90vw, (max-width: 575px) 95vw" width="740" height="494" src="/sites/default/files/styles/news_banner_370/public/andrew-scheer--weblead.jpg?h=afdc3185&amp;itok=OmSvdFDm" alt="Photo of Andrew Scheer"> </div> <span class="field field--name-uid field--type-entity-reference field--label-hidden"><span>Christopher.Sorensen</span></span> <span class="field field--name-created field--type-created field--label-hidden"><time datetime="2019-06-26T14:16:44-04:00" title="Wednesday, June 26, 2019 - 14:16" class="datetime">Wed, 06/26/2019 - 14:16</time> </span> <div class="clearfix text-formatted field field--name-field-cutline-long field--type-text-long field--label-above"> <div class="field__label">Cutline</div> <div class="field__item">Conservative Party of Canada leader Andrew Scheer delivers a speech on the environment in Chelsea, Que. on June 19 (photo by Adrian Wyld/Canadian Press)</div> </div> <div class="field field--name-field-author-reporters field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/news/authors-reporters/david-taylor" hreflang="en">David Taylor</a></div> </div> <div class="field field--name-field-topic field--type-entity-reference field--label-above"> <div class="field__label">Topic</div> <div class="field__item"><a href="/news/topics/our-community" hreflang="en">Our Community</a></div> </div> <div class="field field--name-field-story-tags field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/news/tags/carbon-tax" hreflang="en">Carbon Tax</a></div> <div class="field__item"><a href="/news/tags/climate-change" hreflang="en">Climate Change</a></div> <div class="field__item"><a href="/news/tags/faculty-applied-science-engineering" hreflang="en">Faculty of Applied Science &amp; Engineering</a></div> <div class="field__item"><a href="/news/tags/conversation" hreflang="en">The Conversation</a></div> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span></span>When <a href="https://www.cbc.ca/news/politics/scheer-climate-environment-plan-election-von-scheel-1.5177187">Conservative Leader Andrew Scheer unveiled his long-awaited climate plan</a>, he said he could eliminate the federal carbon tax and still meet Canada’s emissions targets by focusing on investments in green technology. Tech, not taxes, he said.</p> <p>Under the plan, major emitters would not pay a carbon tax and would, instead, have to invest in “emissions-reducing technology.” But if you look closer, these investments may not actually reduce emissions.</p> <p>Instead of investing in proven green technology such as wind farms and solar power, Scheer’s plan allows industries to fund things with the potential to reduce emissions, like research or green companies. This flexibility reduces the guaranteed benefits of these green investments.</p> <p>Although the details remain sparse, Scheer’s proposal isn’t entirely off base: My own research shows that investment into green technologies can offset the emissions of an entire industry, but it can only work in certain circumstances. With a couple of modifications, policies like Scheer’s can bring more predictable and affordable emissions reductions.</p> <h4>A disguised carbon tax</h4> <p>Scheer’s plan includes “<a href="https://arealplan.ca">green investment standards</a>” that would force major emitters to invest a set amount, based on their emissions. Investments must go to activities, technologies, companies or research that might eventually reduce emissions.</p> <figure class="align-center "><img alt sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" src="https://images.theconversation.com/files/281226/original/file-20190625-81741-12l88eg.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" srcset="https://images.theconversation.com/files/281226/original/file-20190625-81741-12l88eg.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=401&amp;fit=crop&amp;dpr=1 600w, https://images.theconversation.com/files/281226/original/file-20190625-81741-12l88eg.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=401&amp;fit=crop&amp;dpr=2 1200w, https://images.theconversation.com/files/281226/original/file-20190625-81741-12l88eg.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=401&amp;fit=crop&amp;dpr=3 1800w, https://images.theconversation.com/files/281226/original/file-20190625-81741-12l88eg.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=504&amp;fit=crop&amp;dpr=1 754w, https://images.theconversation.com/files/281226/original/file-20190625-81741-12l88eg.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=504&amp;fit=crop&amp;dpr=2 1508w, https://images.theconversation.com/files/281226/original/file-20190625-81741-12l88eg.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=504&amp;fit=crop&amp;dpr=3 2262w"> <figcaption><span class="caption">Unless large emitters invest in proven technologies, emissions may continue to rise (photo by</span>&nbsp;<span class="attribution"><span class="source">Shutterstock)</span></span></figcaption> </figure> <p>These mandatory investments would create financial pressure to lower emissions, much like a carbon tax. But, unlike many carbon taxes, these investments aim to reduce emissions in the “medium term,” according to Scheer.</p> <p>It’s not clear how long that might be or what the investment amounts will be. Surprisingly, the standards let emitters invest in indirect emissions reductions, including funding research or purchasing a clean-tech start-up company.</p> <p>Allowing investments that do not create substantial short-term emissions reductions creates a major loophole. For example, a $1-million factory expansion that also reduced factory emissions by 0.01 per cent might be considered an eligible investment under Scheer’s plan, but that $1 million would have little effect on emissions.</p> <p>Scheer could improve his plan with this change: Make explicit emissions-reduction targets for investments, and let the private sector innovate and find cheaper paths to those targets.</p> <h4>Affordable or effective?</h4> <p><a href="https://repository.law.umich.edu/articles/52/">Typical climate policies fall into two categories</a>. Defined costs, like a carbon tax, where fixed financial penalties encourage greener choices, but the benefits can vary. Or, defined benefits, like cap-and-trade, where regulations require emissions to change, but the costs can vary.</p> <p>While <a href="https://doi.org/10.3386/w19338">research suggests that the details of a climate policy matter more than its structure</a>, Scheer is proposing a new policy structure without providing details. Without details, Scheer’s plan may seem like the best of both a carbon tax and a cap-and-trade system. But without firm emissions-reduction targets, Scheer’s policy relies on its financial incentives for emissions reductions and will behave like a carbon tax.</p> <p>To be effective, therefore, the required investments per tonne of emissions in Scheer’s plan would need to be similar to the per tonne costs of the carbon tax. Yet Scheer decries projections that an effective federal carbon tax would need to climb north of $100 per tonne. Both Scheer’s plan and the federal carbon tax rely on financial incentives to reduce emissions. Either policy will force Canadians to choose between an affordable climate policy and an effective one.</p> <p>My research team has found a way to ease this dilemma. With a couple of modifications, the efficiency of policies like Scheer’s can be improved by as much as five times.</p> <h4>A savings opportunity</h4> <p>We looked at what would happen to emissions if fossil fuel producers were forced to invest in green technologies that were known to be profitable or save costs, and were further required to reinvest a portion of those profits or cost savings. We created a simulation where oil and gas producers in North Dakota were forced to invest in wind turbines – and reinvest a fraction of the wind turbines’ revenue into more wind turbines.</p> <figure class="align-center "><img alt sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" src="https://images.theconversation.com/files/281225/original/file-20190625-81766-y94swh.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" srcset="https://images.theconversation.com/files/281225/original/file-20190625-81766-y94swh.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=338&amp;fit=crop&amp;dpr=1 600w, https://images.theconversation.com/files/281225/original/file-20190625-81766-y94swh.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=338&amp;fit=crop&amp;dpr=2 1200w, https://images.theconversation.com/files/281225/original/file-20190625-81766-y94swh.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=338&amp;fit=crop&amp;dpr=3 1800w, https://images.theconversation.com/files/281225/original/file-20190625-81766-y94swh.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=424&amp;fit=crop&amp;dpr=1 754w, https://images.theconversation.com/files/281225/original/file-20190625-81766-y94swh.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=424&amp;fit=crop&amp;dpr=2 1508w, https://images.theconversation.com/files/281225/original/file-20190625-81766-y94swh.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=424&amp;fit=crop&amp;dpr=3 2262w"> <figcaption><span class="caption">In a simulation, researchers found that when oil and gas producers in North Dakota invested and reinvested in wind turbines, emissions and costs decreased (photo by</span>&nbsp;<span class="attribution"><span class="source">Shutterstock)</span></span></figcaption> </figure> <p>The initial investments in wind turbines turned a profit and some of that profit went towards growing the wind farm. This feedback loop allowed the wind farm and its emissions offsets to grow exponentially and reduced the necessary initial investments. In North Dakota, <a href="https://doi.org/10.1016/j.apenergy.2019.03.158">the investments needed to offset all of the emissions from producing and consuming oil and gas dropped from about 50 per cent of the value of the hydrocarbons to 10 per cent because of reinvestments</a>.</p> <p>Combining investment and reinvestment into proven and successful green technologies allows green technologies to expand more quickly. Policies with reinvestment are like a savings account with a high interest rate – over time, the balance is funded by more than the initial investment.</p> <p>Reinvestment makes green technologies and their emissions reductions available at a lower cost to consumers and businesses. Owning profitable and growing green technologies gives businesses, consumers and heavy emitters a transition plan, which my colleagues and I call “black-into-green,” or the BIG transition.</p> <h4>Mandate reinvestments</h4> <p>While our case study is not directly applicable everywhere (and <a href="https://doi.org/10.1016/j.seta.2017.01.003">is not as favourable in the Athabasca oil sands</a> due to lower wind speeds and greener Canadian electricity), it demonstrates the benefits of pairing investments and reinvestments into profitable or cost-saving green technologies.</p> <p>Our work suggests Scheer should make another modification to his plan: The green investment standards should mandate that heavy emitters make profitable or cost-saving green investments and reinvest a portion of those profits or savings.</p> <p>Scheer’s green investment plan is missing key details and needs two major improvements. The Conservatives should mandate the efficacy of investments and require reinvestments. Without these modifications, the proposed green investment standards, like a carbon tax, are another climate policy that can be either affordable or effective – but not both.</p> <p>Given this trade-off, Canadians should fear promises of affordability and advocate more efficient climate policies.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img alt="The Conversation" height="1" src="https://counter.theconversation.com/content/119266/count.gif?distributor=republish-lightbox-basic" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important" width="1" loading="lazy"><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: http://theconversation.com/republishing-guidelines --></p> <p><em><span><a href="https://theconversation.com/profiles/david-taylor-761955">David Taylor</a>&nbsp;is an assistant professor in the department of civil and mineral engineering at the&nbsp;<a href="http://theconversation.com/institutions/university-of-toronto-1281">University of Toronto</a>.</span></em></p> <p><em>This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/without-changes-scheers-climate-plan-will-be-expensive-or-useless-119266">original article</a>.</em></p> </div> <div class="field field--name-field-news-home-page-banner field--type-boolean field--label-above"> <div class="field__label">News home page banner</div> <div class="field__item">Off</div> </div> Wed, 26 Jun 2019 18:16:44 +0000 Christopher.Sorensen 157118 at