Trudeau takes carbon pricing debate to the global stage at COP26

GLASGOW, United Kingdom -

Prime Minister Justin Trudeau is pushing the world to impose a global price on carbon by 2030 that would cover 60 per cent of the planet's greenhouse gas emissions.

"We recognize right now that only about 20 per cent of global emissions are covered by a price on pollution," he said during a speech Tuesday at the COP26 climate talks in Glasgow.

"We should be ambitious and say as of right here today that we want to triple that to 60 per cent of global emissions should be covered by a price on pollution in 2030."

Trudeau started his second and final day at the annual climate negotiations by co-hosting a carbon-pricing event, showcasing Canada's carbon price as one of the most ambitious and, in his words, stringent in the world.

"What a strong carbon price does, when it's properly designed, is actually drive those price signals to the private sector, transform the economy and support citizens in encouraging them to make better choices," he said.

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Carbon pricing is not part of U.S. President Joe Biden's current plan to combat climate change but Trudeau expressed confidence that other countries will come to realize that other ways to reduce emissions are more expensive and less effective.

"We know there are many different approaches that every country is going to have to take to reduce emissions, to decarbonize their economy, to get to net zero (emissions by 2050)," Trudeau told a news conference later.

"And carbon pricing is one of the most effective and cheapest ways to get there, It's an extremely powerful tool that incentivizes businesses and consumers to make smarter choices."

Trudeau said he's "very optimistic" that as other countries look at the hard work of reducing emissions, "they'll realize that not putting a price on pollution in their jurisdictions is going to mean having to do more, more expensively, in more complex ways in other parts of their economy. And that's what's so appealing about carbon pricing."

At the same time, Trudeau said there must be measures to ensure countries that do the right thing to reduce emissions don't lose out on trade to countries that don't put a price on a carbon and are, consequently, able to produce cheaper goods.

His government has begun consultations exploring the idea of imposing "border carbon adjustments" to ensure a level playing field, where imported goods are subject to the same carbon costs as domestically produced goods.

Trudeau pointed to aluminum as an example of the problem, arguing that Canada has invested heavily in producing "some of the cleanest aluminum in the world" but is competing with cheaper aluminum produced elsewhere "in dirtier ways with significantly lower labour standards."

"I don't think that's the kind of world we want, where people who do the right things the right way get penalized and people who do the wrong things the wrong way get advantages," he said.

Trudeau started the first day Monday with a speech calling on the rest of the world to follow Canada's lead and negotiate a global minimum carbon price.

Trudeau compared the idea to the 15 per cent minimum corporate tax more than 130 countries have now signed on to implement in a bid to stop big multinational corporations from avoiding taxes by funnelling their profits through low-tax countries.

"It ensures those who are leading on pricing pollution are not unfairly penalized," he said.

Carbon pricing has been a political minefield in Canada, with opposing conservative provincial premiers taking the fight against one all the way to the Supreme Court, which upheld the program.

The federal Conservative party, long an opponent of the policy as a "tax on everything," is now itself engaged in an internal debate about the merits.

Leader Erin O'Toole promised to implement a version of a carbon price in the recent election with a rewards card-like system.

Environment Minister Steven Guilbeault said Monday that he thinks this COP meeting could be the one which sparks the start of a real negotiation toward a global price on carbon.

He said there is a level of interest in the idea that he has never seen before.

"So is it a done deal?" he asked. "Absolutely not. Could Glasgow be the moment that we actually start working on developing something like that? I think it has the potential to do that."

Canada's carbon price started in 2019 at $20 a tonne and is set to rise to $170 a tonne by 2030. The current price of $40 a tonne adds about 8.8 cents a litre to gasoline, or about $3.50 more every time you fill you car with 40 litres of gasoline.

But rebate cheques are included with tax returns to make the program revenue neutral. The idea is that a carbon price shouldn't leave families with less money, but provide an incentive to find ways to cut down on fossil fuel use by making it cost more.

It also applies to natural gas, propane, jet fuel and any other liquid fuel, based on the weight of greenhouse gas emissions produced when that fuel is burned.

Canada's national price only applies in provinces which don't have an equivalent provincial policy in place -- Alberta, Saskatchewan, Ontario and New Brunswick.

A separate policy for big industrial emitters uses the same price but is only charged on a portion of total emissions produced, rather than on the fuels those emitters buy to operate their machinery.

The Citizens Climate Lobby says there 64 carbon-pricing policies in place around the world, including a direct price on carbon emissions, and cap-and-trade type systems.

More than two dozen are national policies, and the rest are subnational including state or provincial governments in the U.S. and Canada, and cities like Tokyo.

The United States and Australia are the only two fully developed economies without some form of carbon pricing.

This report by The Canadian Press was first published Nov. 2, 2021.