Op-Eds

How do you know when a carbon price works?

For months now, Canadians have been treated to two starkly different carbon tax stories. In one version, it’s a fair, highly effective and essential policy to combat climate change—endorsed by economists and environmentalists alike. In the other, it’s little more than a tax grab that “does nothing” for emissions or the environment.

So, which is it?

In other words, can we track whether a carbon tax is, in fact, working and achieving its desired results? The answer is absolutely (though we could be doing a better job of it).

For starters, we can look to past evidence, like the impact of B.C.’s carbon tax, which has been in place for over a decade. Various studies have evaluated its impact on both the environment and the economy. One study considered whether carbon pollution had gone down under B.C.’s carbon price and found that, thanks to the policy, pollution was 5% to 15% lower than it would be otherwise.

Other studies looked at whether B.C.’s carbon tax changed people’s behaviour and concluded that it had: people drove less, invested in more fuel-efficient cars and used less natural gas at home. Finally, research has also been done on the policy’s impact on the economy. These found that the carbon tax had no significant impact on B.C.’s economic activities and, believe it or not, was even responsible for a net increase in jobs.

But perhaps oddly, none of the studies reviewing the performance of the B.C. carbon tax were actually done, or even commissioned, by the B.C. government. Rather, they were undertaken by independent experts, mostly from Canadian academic institutions, as one-off analyses. This brings up another important question: who can and should be tracking the outcomes of these policies? And how often should tracking take place?

While independent analysis is certainly needed, it’s the government’s job to ensure an evaluation of its policies is undertaken. And this evaluation should happen at regular intervals, be communicated to the public, and ultimately determine whether the government needs to revisit or refine the policies it has in place. The Pan-Canadian Framework on Clean Growth and Climate Change does include some commitments related to monitoring and reporting—and the federal government has committed to reviewing its price on pollution in 2022—but the details of how this would work and who would be responsible have yet to be ironed out.

The U.K.’s approach provides a good model for how to track climate policy outcomes and ensure government accountability. In 2008, the country established a Committee on Climate Change. The committee is an independent, statutory body whose purpose is to help the government set and stay within carbon budgets; monitor progress against targets; conduct research and analysis; and engage with stakeholders to ensure this information is shared widely.

Canada would benefit from a similar approach—and may soon have an opportunity to implement one. In the coming months, the federal government is expected to announce a new arm’s-length body (a climate institute of sorts) to “provide informed advice to governments and Canadians, identify best practices to support ambitious climate action, and develop and provide independent and expert-driven analysis to help Canada move towards clean growth.”

This is an important step. But evaluating the impact of climate policies, tracking outcomes and reporting them to the public should be key priorities for the climate institute’s mandate. While this may appear to overlap with the auditor general’s responsibilities, the role of the institute would be to delve deeper into the data, to better understand—and attribute—the relationship between pollution reductions (or the lack thereof) and specific policies.

If we’re to ensure the success of Canada’s climate plan and the provincial carbon pricing policies being put into place, we cannot be taking shots in the dark. A dedicated body of experts committed to tracking and reporting outcomes at regular intervals will help Canada get its climate policies right—or change course if we’ve veered off track.

In other words, it can help deliver the meaningful climate action that a majority of Canadians are asking for.

This article was co-authored by Dan Woynillowicz and originally appeared in The Hill Times.