Liberal Party leader Mark Carney speaks during the Canada 2020 Net-Zero Leadership Summit in Ottawa, on April 19, 2023.Sean Kilpatrick/The Associated Press
Managing crisis has marked Mark Carney’s career, from the global financial meltdown to Brexit and now the Trump tariffs. In each of those perils, the economist and former central banker has leaned on a four-word aphorism: Plan beats no plan.
Mr. Carney attributes the phrase to former U.S. treasury secretary Timothy Geithner, a compatriot in the 2008-09 battle to rescue crumbling financial markets. The concept: There’s no way to predict every possible scenario, but it is critical to lay the groundwork for responding to a range of them. Mr. Carney says he took that to heart in 2016 when, as governor of the Bank of England, he and his team developed monetary-policy options on the off chance voters supported leaving the European Union.
Of course, they did just that. With markets tumbling in response, he sent a simple message: “We are well prepared for this,” he wrote in his 2021 book Value(s). “Once we backed that up with £250-billion, the market knew it was true and stabilized.”
But what’s the plan now for dealing with climate change, the slow-moving crisis that dominated Mr. Carney’s labours since his central bank years?
That imperative remains. But other problems have intervened for the new Liberal Party Leader as he seeks to be chosen as prime minister in an April 28 election. Canada’s immediate plight is on the trade front. His plan is focused on retaliating against U.S. President Donald Trump’s tariffs and suggestions of annexation, and restructuring the economy to make it less reliant on the United States.
It’s unclear whether his years-long push to accelerate the transition to a low-carbon economy is on hold for now, or falling on his list of priorities.
Carbon tax
Mr. Carney’s position on carbon taxes is tough to pin down – certainly when it comes to consumer levies. In his book, he held up Canada’s carbon pricing regime – a pillar of then-prime minister Justin Trudeau’s climate agenda – as a model for other countries.
“Meaningful carbon prices are a cornerstone of any effective policy framework,” Mr. Carney wrote. He included a caveat: To be credible, climate policies require broad public support. But that waned in Canada as the country lurched from COVID-19 pandemic restrictions to inflation.
As household costs surged, the Conservatives, led by Pierre Poilievre, made scrapping the levy a central plank of their platform.
In May, 2024, Mr. Carney appeared at a Senate committee hearing, where Conservatives badgered him on whether he supported “Justin Trudeau’s carbon tax.” He responded: “I think it served a purpose up until now. I think one can always look for better solutions, and as a country, we should always be open to better solutions for that.” He has yet to articulate what those solutions might be.
Mr. Carney has now abandoned the tax, saying it had become too divisive. “It’s been fed by misinformation and lies, quite frankly, by the Leader of the Opposition,” he said about Mr. Poilievre in late January. “But we are in this situation and it’s important that climate policy has broad buy-in.”
Jim Leech, who was a top executive with Ontario Teachers’ Pension Plan Board at the time of the financial crisis, saw Mr. Carney’s management skills close up. He sees the Liberal Leader not just as a theoretical economist, but one who is particularly attuned to financial markets, including on the topic of climate.
Mr. Carney is realistic and knows that shifting away from fossil fuels too quickly would cause grievous economic harm, Mr. Leech said.
“By the same token, we have to understand the risk of climate, that 25 years from now, if something isn’t done, if we don’t make progress here, we’re in real trouble,” he said.
“Obviously, in his view, we were hampering the whole movement toward less carbon because it became a political issue. We politicized it, then, all of a sudden, everybody had to take sides.” Sometimes movements must take one step back to move two steps forward, Mr. Leech said.
Oil sands
Mr. Carney has lauded the oil industry’s plans to reduce carbon emissions. This includes the oil sands, where major producers, under the banner of the Pathways Alliance, have proposed a $16.5-billion carbon-capture project.
“Canada is a beacon of reliability. Thanks to the dedication of our workers and the ingenuity of our engineers, our costs of production have become very competitive, and we can eliminate the net emissions from the production of our energy,” he wrote in a submission to The Globe and Mail’s Report on Business magazine in 2023. “That will take enormous investment and focus. But it will be worth it to create a new clean system that works for all.”
This bedevilled his Liberal predecessor. Oil and gas emissions account for almost a third of Canada’s emissions and have steadily risen, according to the Canadian Climate Institute think tank. As a result of the trend in oil and gas, Canada is not on track meet its 2030 target of a 40-per-cent to 45-per-cent reduction from 2005 levels, the institute said.
Now, the energy sector – which has blamed the Liberals for policies that have hindered its growth – is worried about Mr. Trump’s comments about restricting access to its main export market, and polls have shown more Canadians support building energy infrastructure to connect more of the country.
Last month, a group of 14 energy-industry chief executive officers, including Pathways members, called for a host of policies to be scrapped to allow for expansion of fossil-fuel projects. The policies include environmental legislation the CEOs say restricts pipeline construction, a cap on oil and gas emissions, and the federal carbon levy on large emitters. They also urged party leaders to limit the approval period for major projects such as pipelines to six months.
Mr. Poilievre has pledged to do all these things. Mr. Carney has said the Liberals wouldn’t repeal the Impact Assessment Act, known as Bill C-69, which opponents have dubbed the No More Pipelines Bill, or remove the federal large-emitter carbon levy.
However, he has offered a one-window approach to project approvals with a mandate to issue decisions within two years instead of five.
“Clean energy is going to be increasingly important to competitiveness,” Mr. Carney said on April 9. But increasing production of oil and gas – albeit while reducing emissions – will also be necessary to allow Canada to “dominate” the market in the long term, he said.
Adam Waterous is a signatory to the CEO letter. His company, Strathcona Resources Ltd., last year signed a $2-billion agreement with Ottawa’s Canada Growth Fund to build carbon capture and sequestration facilities at the company’s oil sands operations.
Mr. Waterous said Mr. Carney’s refusal to implement the CEOs’ measures, should his Liberals win the election, would mean the end of private investment in major energy infrastructure. Instead, Mr. Waterous predicted, Canada may return to state-owned enterprises to develop such projects, as it did with the Trans Mountain Pipeline expansion.
“It would be reasonable to assume that under a Mark Carney government that we are going to have a Trans Mountain 2.0, a Petro-Canada 2.0, to advance projects, and not just pipelines and LNG facilities, because actually you then need to fill those pipelines, you’ve got to drill a lot of wells,” he said.
Financial industry
Mr. Carney spread the gospel of greening the world’s financial system while he was still a central banker. As Bank of England governor in 2015, he gave a speech to Lloyd’s of London on the long-term effects of climate change on global economies. He described a tragedy of the horizon – a problem so long-lasting and complex that it could not be solved within one monetary policy, political or business cycle, so solving it was put off.
“There have already been a few high-profile examples of jump-to-distress pricing because of shifts in environmental policy or performance,” he said. “Risks to financial stability will be minimized if the transition begins early and follows a predictable path, thereby helping the market anticipate the transition to a two-degree world.”
After central banking, as UN special envoy for climate action and finance, he became the go-to guy in the field. His big splash was the 2021 COP26 summit in Glasgow, where he announced his coalition, the Glasgow Financial Alliance for Net Zero, or GFANZ, had attracted banks, insurers and fund managers that control tens of trillions of dollars in assets. They had agreed to pool their financial might in efforts to speed up the transition to a net-zero economy.
However, the re-election of Mr. Trump, a noted climate-change denier, to the White House raised risks among the North American financial institutions that their membership in GFANZ, and its subgroup, the Net Zero Banking Alliance, could expose them to antitrust action and costly penalties.
At the end of last year, the group loosened its criteria so financial institutions no longer had to adopt strict emission targets, as long as they were “working to mobilize capital and lower the barriers to financing energy transition.”
Still, the largest U.S. and Canadian banks have all left the NZBA, raising questions about the effectiveness of what had been a global alliance in an era of splintering trade relationships.
Green finance
Mr. Carney has often spoke of the “plumbing” that must be in place before the world’s financial systems can be directed to supporting to push to net zero – corporate disclosure, target-setting, standardization of reporting, planning for stranded assets and a host of other things.
He was involved in the development of the International Sustainability Standards Board, whose reporting rules are now being adopted in countries that represent more than half of global gross domestic product, including Canada.
“As opposed to saying you can’t invest in fossil fuels, he was saying, basically, if you’re invested in fossil fuels, then disclose the risk as well as understand the risk,” Mr. Leech said.
At the Senate committee hearing last year, Mr. Carney lamented Canada’s slow pace implementing climate-related financial rules, calling the efforts “patchwork, delivered late and falling short of international standards.”
But making climate-related financial standards mandatory and formalizing a taxonomy certifying investments as green or transitionary have not figured prominently in Mr. Carney’s election campaign.
They should be – especially after he lamented Canada’s foot-dragging on the file, said Julie Segal, senior program manager of climate finance at Environmental Defence.
“All of Canada’s closest non-U.S. trade partners are far more advanced on sustainable finance policies – some with taxonomies, almost all with disclosures, almost all with 1.5-degree-aligned transition plans,” Ms. Segal said. “If we want to strengthen trade relationships with the European Union, U.K., Australia and countries across Asia, all of those jurisdictions have stronger sustainable finance policies.”