Environmental and banking system protestor wears a mask of then-Governor of the Bank of England, Mark Carney, at a demonstration in the U.K. on July 11, 2019.PETER NICHOLLS/Reuters
Sarah Lawrynuik is a freelance Canadian journalist reporting most frequently on climate change and conflict from more than a dozen countries around the world.
There is something deeply demoralizing about seeing one of the world’s most reputable climate finance wonks become Prime Minister of Canada, to then immediately strike down the country’s biggest piece of climate legislation, the national carbon tax.
Prime Minister Mark Carney is well known for having been the governor of the central banks of Canada and England, but a line on his CV also reads: United Nations Special Envoy on Climate Action and Finance. His tossing of the national minimum standard of carbon pricing for consumers – particularly as his first symbolic act – is a true betrayal of the policies he’s long stood for, and of Canadians who stand firm behind good, efficient climate policy.
“The consumer carbon tax is not working,” Mr. Carney said on social media. This claim is false. Canada’s latest reported emissions, for 2023, fell for the first time when not being pushed down by a great economic catastrophe, such as the pandemic. Because of the time delay in reporting emissions figures, that decline has likely continued to the present.
Mr. Carney’s next line read, “It’s become too divisive.” Which is the truth of why the carbon tax has been canned. Despite its effectiveness. Despite the fact that the average Canadian household under the federal policy was better off financially after receiving the carbon rebate.
“I’m going to be sad to see it go,” Chris Ragan, director of McGill University’s Max Bell School of Public Policy, said in an interview. This leaves a gaping hole in Canada’s climate plan, he added, with downsides to any alternatives.
Mr. Carney suggests future green incentives paid for by industry will come – a less-than-ideal replacement. “It’s not that subsidies don’t work to reduce emissions,” Mr. Ragan said. “They just tend to be very expensive.”
Additionally, cancelling the carbon tax has also disrupted what consumers, industry and markets had come to expect would happen. And “credible and predictable climate policies from governments, like carbon pricing,” are what allow for the slow but long-term decarbonization of an economy – as Mr. Carney wrote in 2021 for the International Monetary Fund’s Finance and Development Magazine.
Take the half million Canadians who took part in the Greener Homes Grant program, myself included. In 2023, I replaced my natural gas furnace with a cold-weather heat pump, allowing me to disconnect from natural gas entirely. It slashed my home’s emissions by more than 11 tons annually – the equivalent of driving about 45,000 kilometres. Some $15-billion of federal funding was invested in green home retrofits funded by the carbon tax, including programs targeting low-income households. To say nothing of nearly quadrupling the number of new vehicles registered that are electric in just five years.
Individuals and businesses making forward-thinking climate choices like this did also expect the financial reward that was associated with the policies the federal government had laid out. But those incentives have now evaporated and so, too, has faith in a consistent policy line from the government.
“I think this policy decision contributes to a myth that the heavy emitters are the bad guys,” Mr. Ragan said. “And I think the truth is exactly the opposite. About 60 per cent of Canada’s emissions come from us – from families, households and small businesses.”
In his time as climate envoy, Mr. Carney pushed for greater transparency of climate risk in international financial markets. He advocated for carbon-border adjustment mechanisms, so countries that lagged behind wouldn’t unjustly benefit from failing to tax pollution. He helped establish standards for the creation of high-integrity carbon-credit markets, to do away with greenwashing. His climate bona fides are stellar. And yet, this is his first move as leader of Canada.
It’s completely puzzling. A clear and decisive majority of Canadians across the political spectrum favour action on climate change. Right-wing politicians are trying to say Mr. Carney is being caught in a “gotcha” moment, but it isn’t that. It’s something far more disappointing.
Canadians have failed to accept that climate action costs money somewhere. They don’t like seeing it at the gas tank, so they’ve yielded to the rhetoric of Conservative Leader Pierre Poilievre that the carbon tax was bad – instead of believing experts that this is the most effective way of dealing with the climate catastrophe.
Witnessing Mr. Carney’s first action as Prime Minister is disappointing. But what’s more disappointing is that Canadians let good, effective policy divide the country.
Mr. Carney knows what’s at stake here. At the 2022 COP 27 climate conference he summed it up well in an interview with Bloomberg: “Climate physics doesn’t respect why emissions are happening. Just the amount of emissions.”