Clean Energy Canada | How do you know when a carbon price works?
March 12, 2019

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

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

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.