Canada’s six year old carbon pricing system is facing uncertain times. Recently, 14 oil and gas CEOs and opposition leader Pierre Poilievre have called for its repeal. This raises questions about the future of Canada’s climate policy and the Pathways Alliance carbon capture project.
Calls for Repeal
The carbon pricing system came into the picture in 2019. The system aimed to reduce pollution by incentivizing heavy industries to cut carbon emissions.
As per the current law, industries must pay or buy credits to offset emissions that exceed a certain threshold. Moreover, the pricing system is designed so that it gets progressively stricter. This implies that the carbon price increases periodically.
However, Pierre Poilievre, the Conservative leader, has vowed to repeal the federal carbon pricing system if elected. He believes that individual provinces should decide their carbon regulations. He plans to replace the system with tax credits to encourage companies to reduce pollution without imposing a carbon price.
Potential Impact on the Pathways Alliance Project
The Pathways Alliance, which represents Canada’s six largest oil sands producers, has also criticized the federal carbon pricing scheme. The group proposed a C$16 billion carbon capture and storage project to reduce greenhouse gas emissions from the oil sands industry. However, they argue that the current carbon pricing system makes the project less competitive.
If the federal carbon pricing system is repealed, it could cast doubt on the Pathways Alliance project’s future. Industry leaders believe that a more favorable regulatory environment is needed to grow Canada’s oil sands and reduce emissions.
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The Road Ahead for Canada’s Carbon Policy
Canada is a critical juncture where it needs to balance economic growth with climate goals. Some experts argue for the repeal of the carbon pricing system, and others like newly sworn in Prime Minister Mark Carney stand by the importance of the pricing system to maintain Canada’s competitiveness.
Moreover, the policies and actions taken by other countries is adding on to Canada’s dilemma. For instance, countries like UK re introducing carbon levies. Canada must keep pace with international climate policies. The decision to repeal the pricing system or not will have a big impact on the country’s ability to meet climate goals.
