Speaker 1: Welcome to zero. I'm Akshatrati. This week Carbon costs Canada.
Speaker 1: Last month, nearly fifty heads of state met in Paris
Speaker 1: to talk about how to bring global finance in line
Speaker 1: with climate goals. It's a huge undertaking and the to
Speaker 1: do list is long. A lot of what needs to
Speaker 1: be done on that list could be made easier if
Speaker 1: governments had more money, and right now, after the pandemic
Speaker 1: and the economic consequences that have followed, there is not
Speaker 1: a lot of it. One way to fill government coffers
Speaker 1: is through taxes. Taxes are not popular, but they are
Speaker 1: crucial and perhaps the most interesting thing at the meeting
Speaker 1: was that instead of dividing rich and poor countries, there
Speaker 1: was somewhat of a unity on taxes. French President Emmanuel Macron,
Speaker 1: the host of the meeting, brought up international taxes on
Speaker 1: shipping and even financial transactions multiple times throughout the two
Speaker 1: day event, and at the final press conference, Kennyan President
Speaker 1: William Ruto said.
Speaker 2: The discussion about carbon tax is a discussion that is
Speaker 2: a must have and on this one, we do not
Speaker 2: want the North to pay for the South. We want
Speaker 2: all of us to pay.
Speaker 1: From an economic standpoint, taxes on emissions are an optimal
Speaker 1: way of speeding up the transition to clean energy, but
Speaker 1: the politics of those taxes aren't a winning cars in
Speaker 1: any country, let alone Globally. Among G seven members, only
Speaker 1: three have some form of tax on carbon the UK,
Speaker 1: the EU and Canada. And Canada is the case study
Speaker 1: that I'm going to explore today. It's worth learning a
Speaker 1: country's experience to understand whether carbon taxes could ever work international.
Speaker 1: Last year I interviewed Canada's Prime Minister, Justin Trudeau, and
Speaker 1: he's very proud of introducing the tax.
Speaker 3: No matter how many times I go around saying, look,
Speaker 3: you can do it. I want two reelections on putting
Speaker 3: a broad based price on pollution. People still think that
Speaker 3: it's a real challenge.
Speaker 1: You might notice he does not call it a carbon tax,
Speaker 1: but a price on pollution. This is no accident.
Speaker 4: If you start off looking at the police, terrible, If
Speaker 4: you like, say, do you want a carbon tax? Darable? Terrible? Terrible?
Speaker 4: What about carbon pricing a little bit better? What about
Speaker 4: putting a price on pollution better? No longer free to pollute? Best?
Speaker 1: This is my guest today, Catherine McKenna, former Minister of
Speaker 1: Environment and climate change in Trudeau's cabinet. She was tossed
Speaker 1: by Trudeau with selling the idea and whether you call
Speaker 1: it a carbon tax, a carbon price, an emissions trading system,
Speaker 1: or a price on pollution, all of it is meant
Speaker 1: to economically disincentivize emitting greenhouse gases. Countries that introduce these
Speaker 1: policies inevitably see their emissions decline. But the politics are delicate.
Speaker 1: Conservative politicians are still fighting Trudeau's price and pollution.
Speaker 3: Tends to be conservative politicians that are most resistant to
Speaker 3: this straightforward mechanism, looking instead at bringing in heavy regulations
Speaker 3: or trying to do other ways around it, when a
Speaker 3: price on pollution is the cleanest way to do it.
Speaker 1: I wanted to learn from Kat about how Trudeau has
Speaker 1: managed to counter opposition to climate action and how she
Speaker 1: figured out getting people on board for a price on pollution.
Speaker 1: By the way, Kath is now the chair of a
Speaker 1: UN group that is setting standards about what exactly the
Speaker 1: term that zero means for corporations. She's the best expert
Speaker 1: I know about how to use language in selling complex policies.
Speaker 1: In twenty fifteen, you became a member of Prime Minister
Speaker 1: Justin Trudeau's cabinet and you were the first minister to
Speaker 1: have climate in their portfolio. Could you briefly tell the
Speaker 1: story of how you got to that point.
Speaker 4: So I should serve from the beginning. I got elected,
Speaker 4: so I was I'd worked really hard over a couple
Speaker 4: of years to get elected, so I hadn't really thought
Speaker 4: about you're asked by the Prime minister. You have to
Speaker 4: be elected as part of the team, and then you're
Speaker 4: asked to serve in cabinet. I almost fell off my
Speaker 4: seat when I was asked to be Minister of Environment
Speaker 4: in climate change, because I knew folks that worked on
Speaker 4: climate change, and those were like the climate folks. I'd
Speaker 4: done human rights, I'd also done corporate law, so I thought, oh,
Speaker 4: my gosh, you know, I really don't know anything on climate.
Speaker 4: And I think I realized that really quick because a
Speaker 4: few days later, I was off to Paris for the
Speaker 4: negotiations around the Paris Agreement at COP twenty one, and
Speaker 4: I'm reading my briefing books and I'm like, what in
Speaker 4: God's name is anyone talking about? First of all, so
Speaker 4: many acronyms like COP. I was like I had to ask.
Speaker 4: I said, Okay, let's just start at the beginning. There
Speaker 4: are no dumb questions. What's a cop They were like
Speaker 4: confidence of the parties, and I was like, okay, could
Speaker 4: we stop with all the acronyms. But I mean, my
Speaker 4: job was pretty clear from the Prime Minister that one
Speaker 4: we had to go to Paris and fight for an
Speaker 4: ambitious global agreement, which was great. The question was would
Speaker 4: it be ambitious enough. So in fact getting for the
Speaker 4: first time ever, world's coming together degree that everyone needed
Speaker 4: to do their part on climate change, and that there
Speaker 4: was a clear target staying well below two degrees driving
Speaker 4: for one point five That was all really important. But
Speaker 4: then I had to come home and we had to
Speaker 4: get a climate plan for Canada. And that's hard because
Speaker 4: I think everyone knows we produce a lot of oil
Speaker 4: and gas in Canada. What they may not know is
Speaker 4: Canada's eighty percent clean electricity. So that's a very good story.
Speaker 4: We have a lot of hydro, and we have significant
Speaker 4: nuclear in Ontario, and then we have some wind and solar.
Speaker 4: But the real thing in the climate plan was going
Speaker 4: to be to get a price on pollution.
Speaker 1: And that brings us to one of the things you
Speaker 1: were most famous for which is starting Canada's carbon pricing
Speaker 1: scheme officially known as the Greenhouse Gas Pollution Pricing Act. Now,
Speaker 1: in the simplest possible terms, how does Canada's carbon pricing
Speaker 1: system work?
Speaker 4: Oh, in the simplest possible terms, Well, first of all,
Speaker 4: I learned one you don't call something a carbon tax.
Speaker 4: That's extremely unpopular. But by the way, the Supreme Court
Speaker 4: found it wasn't a tax because we give all the
Speaker 4: money back to people. So essentially, what our system is
Speaker 4: that there's a price on pollution across the country. Now,
Speaker 4: certain province has already had a price on pollution, some
Speaker 4: had it and then got rid of it. But we
Speaker 4: needed to have from a competitiveness perspective and a uniformity perspective,
Speaker 4: but also a performance perspective, we needed to have a
Speaker 4: price across the country. So essentially, we just said there's
Speaker 4: going to be a price. It's going to be starting
Speaker 4: at ten dollars. It's going to go up at that
Speaker 4: time to fifty dollars. It's now it will go up
Speaker 4: to hundred and seventy dollars by twenty thirty, and that's
Speaker 4: across the board. Now, there are always nuances. So you
Speaker 4: said you wanted. It's simple, but I think it is
Speaker 4: important beyond the fact that all the money goes back
Speaker 4: to people. We also have what's called an output based
Speaker 4: pricing system, so that's a very un sexy name, but
Speaker 4: competitiveness is an issue. So for heavy emitters, we figured
Speaker 4: out a system to look at competitiveness, but to of
Speaker 4: course put a price on pollution. So I mean, essentially,
Speaker 4: at its basics, there's a price on pollution. It started
Speaker 4: a ten bucks a it's across the board, and the
Speaker 4: money goes back to people in a transparent way through
Speaker 4: the tax system.
Speaker 1: And the history of when you came to this point
Speaker 1: was that there were a few provinces within Canada that
Speaker 1: already had some form of a system, and so you
Speaker 1: had to design something that would work at a federal level,
Speaker 1: but also take into consideration all these different systems that
Speaker 1: existed in different provinces. So what was the solution that
Speaker 1: you came up with to make it all work?
Speaker 4: Well, I mean, so we could have just done something easy.
Speaker 4: We could have just said we're just doing a direct price,
Speaker 4: but we said we're actually just focused on outcomes, which
Speaker 4: I think in climate policy you should always just do
Speaker 4: that focus on outcomes. We needed to reduce a mission
Speaker 4: with a price, but we allowed provinces to decide how
Speaker 4: they were going to do the price. But if they
Speaker 4: didn't want to do the price, then the federal government
Speaker 4: was coming in and that's where the problem started.
Speaker 1: So how hard was it to get this act introduced
Speaker 1: and then passed in Canada?
Speaker 4: It was super hard. Hard things are hard. I mean, look,
Speaker 4: we started with a discussion and we were coming up,
Speaker 4: by the way, with a comprehensive climate plan, so I
Speaker 4: knew this was going to be the hardest element, and
Speaker 4: it was clear that there were some provinces that were
Speaker 4: never going to agree. So in quite a dramatic moment,
Speaker 4: I said to the Prime Minister, so I can't land this.
Speaker 4: I need you to just go out and say we're
Speaker 4: doing it. So we time did. There was a what
Speaker 4: we call these federal provincial meetings, which generally are the
Speaker 4: provinces ganging up on the federal government. So we're at
Speaker 4: this meeting. I think we're in Halifax. We're having this
Speaker 4: discussion once again about pricing, and then of course there
Speaker 4: were people saying, well, we can't do it all these reasons.
Speaker 4: I said, okay, you may want to just have your
Speaker 4: officials follow what's going on in the House of Comments,
Speaker 4: because I said, the Prime ministers announcing that he's putting
Speaker 4: a price pollution across the country.
Speaker 3: Provinces and territories will have a choice in how they
Speaker 3: implement this pricing. They can put a direct price on
Speaker 3: carbon pollution or they can adopt a cap and trade system.
Speaker 4: So that was very dramatic. Bunch of ministers just pushed
Speaker 4: their chairs out of the table and then immediately ran
Speaker 4: to the microphones to say how terrible we were. But
Speaker 4: we had set it up because the major provinces Ontario, BC,
Speaker 4: Alberta and Quebec, which represent a huge amount of the population,
Speaker 4: had already agreed. A number of provinces did not support it.
Speaker 4: They were led by conservative politicians. In fact, they created
Speaker 4: the resistance. One of our national magazines had a picture
Speaker 4: of the resistance. It was six guys, the leader of
Speaker 4: the opposition, a conservative, and then five provincial politicians. As
Speaker 4: like the resistance to climate change. But I'm not bananas, right,
Speaker 4: So we had thought about this and determined, like, first
Speaker 4: of all, we're federations, so I actually believe that provinces
Speaker 4: should design the system that makes sense for them. Every
Speaker 4: economy is different. We're a very big country, and you
Speaker 4: know we have provinces that have a lot of oil
Speaker 4: and gas. We have provinces that have none. But I
Speaker 4: did learn, and I think this is a good lesson
Speaker 4: for folks that are trying to figure out climate policy.
Speaker 4: And it's hard, but policy matters. You have to think
Speaker 4: about people. In fact, like I had to fight quite
Speaker 4: hard internally to get it so all the money went
Speaker 4: back in a transparent way, I said to the Prime
Speaker 4: Minister eventually, because there was just a lot of discussion,
Speaker 4: and you can imagine finance, everyone has ideas. They had ideas,
Speaker 4: and I said, no, I have to have a clear message.
Speaker 4: I have to say how much everyone's getting back. And
Speaker 4: then there was even a discussion on well should lower
Speaker 4: income people get more back? And I said, it's progressive
Speaker 4: by definition because they emit less, so they're going to
Speaker 4: pay less. And that's what the economists showed. So these
Speaker 4: are all very norty things, but policy matters, both in
Speaker 4: terms of the very nuts and bolts of the policy,
Speaker 4: but also how you can sell it.
Speaker 1: Let me capture that moment that you brought up. Prime
Speaker 1: Minister Trudeau could pull off that dramatic moment because he
Speaker 1: had a majority in the House of Commons and he
Speaker 1: could get the Aact through just because of that majority.
Speaker 1: Isn't that right?
Speaker 4: I mean yes in a sense, although the majority of
Speaker 4: Canadians supported parties, so not just us that had a
Speaker 4: price on pollution, But yes, I mean I think that
Speaker 4: you know, if you're going to have a majority, like
Speaker 4: do things with it. I mean, I think it was
Speaker 4: seen as so important because we could not meet our
Speaker 4: target without it, so it was a critical element of
Speaker 4: our climate plan. I like to think that everything isn't
Speaker 4: in life just about politics and saying well do we
Speaker 4: think we can land things like? Because I needed to
Speaker 4: sell this right and to regular people, and so I
Speaker 4: went and I was like, Okay, who can I talk
Speaker 4: to you? So first of all I talked to George Schultz,
Speaker 4: so unfortunately he's.
Speaker 1: Passed away, and he's the Republican advisor.
Speaker 4: To Rey Agan and also Bush Senior, and he had
Speaker 4: been a real proponent of putting a price on pollution.
Speaker 4: But he said to me, I remember looking at me,
Speaker 4: I like, give the money back, give it back. Because
Speaker 4: he's a Republican, right, he just believes in that so
Speaker 4: that was one person that was helpful. But the other
Speaker 4: person was really helpful was Arnold Schwarzenegger.
Speaker 3: I'm so happy that Canada is putting a price on pollution.
Speaker 4: I was trying to get anyone who I thought could
Speaker 4: get some attention that didn't look like an environmentalist, because
Speaker 4: my problem wasn't with people who believed in environmentalists, as
Speaker 4: my problem was people didn't believe in environmentalist didn't want
Speaker 4: them telling them what they needed to do. So I
Speaker 4: got Ernie Arnold Schwartzenegger, who put a price on pollution
Speaker 4: in California, brought in the cap and trade system and
Speaker 4: it was bipartisan and we have done this year in
Speaker 4: California in a bipartisan way of it. As a Republican
Speaker 4: governor and with the Democratic legislators, we brooked together and
Speaker 4: got it done. But it was very serious. It wasn't
Speaker 4: a jokey video. But I was trying to reach folks
Speaker 4: who liked the terminator and I think I use it
Speaker 4: as quite cheesy, but I was like, we need to
Speaker 4: terminate climate change.
Speaker 1: So you make this point, which is giving the money
Speaker 1: back was crucial. How did you make it work because
Speaker 1: all these provinces are doing different things and putting prices
Speaker 1: in a different way. Right.
Speaker 4: Well, I mean the money back's crucial because it's your message. Right.
Speaker 4: You can say we're making it no longer free to pollute,
Speaker 4: but most families are getting more money back. It's a
Speaker 4: very simple message right now. We also made sure that
Speaker 4: people knew how much they were getting back because we
Speaker 4: were in a fight. So the conservative politicians and the
Speaker 4: provinces that didn't have a price on pollution would put
Speaker 4: up the price that people were going to pay and
Speaker 4: forget how much they were getting back because there was
Speaker 4: a delta, and you would make it, you would get
Speaker 4: more money back. So it was very important to do that,
Speaker 4: but it was extremely ideological. I think that there was
Speaker 4: a view that they could win an election. The conservative
Speaker 4: politicians could win an election, and while we have multi
Speaker 4: parties in Canada, it's basically a liberal conservative fight. So
Speaker 4: the Conservatives were really all in, really focusing on this message.
Speaker 4: And it's hard because you know you are fighting an
Speaker 4: uphill battle on messaging. I really became obsessed with comms.
Speaker 4: And it's funny because I'm a lawyer, so I was
Speaker 4: terrible on comms. But I realized that environmentalists were worse.
Speaker 4: So that was my advantage because I say, I don't
Speaker 4: know what anyone's talking about here, and neither do people
Speaker 4: in Hamilton. I'm from a steel town, kind of like Detroit,
Speaker 4: and being able to say something very simple, and I realized,
Speaker 4: like I could go into a class of grade four
Speaker 4: students and say do you think it should be free
Speaker 4: to pollute? And they'll all tell it back no. And
Speaker 4: so that was the message and Canadians they understood that.
Speaker 1: But then you still had to counter the opposition from
Speaker 1: conservative leaders to the act. And that's where the revenue
Speaker 1: neutral pop came in, right focus through the numbers, you
Speaker 1: know what exactly happens when this revenue is collected, and
Speaker 1: you know how did that help you fight these politicians.
Speaker 4: The thing that was a little bit tricky is it
Speaker 4: depended what province you were in, because you're putting a
Speaker 4: price on pollution that includes heavy emitters and businesses, so
Speaker 4: it'll be a different emissions profile depending on the province.
Speaker 4: So in a way, in Alberta and Saskatchewan, two provinces
Speaker 4: where the premiers refuse put a price on pollution, the
Speaker 4: amount that you would pay was going to be significantly
Speaker 4: higher than you might pay in another province, but the
Speaker 4: amount you would get back would also be significantly higher.
Speaker 4: So if you take it to what I did, you know,
Speaker 4: I would have a card and we actually I think
Speaker 4: we mailed it out to them, and I said, like,
Speaker 4: this isn't advertising, this is just letting people know what
Speaker 4: the policy is. So it would say, you know, we're
Speaker 4: putting a price on pollution, and the average family will
Speaker 4: get three hundred and forty three dollars back. I don't know.
Speaker 4: For some reason that sticks in my head for Ontario
Speaker 4: and buy average family. It just depended on your family,
Speaker 4: if you have three kids or two kids, how old
Speaker 4: they were. By average family, we got three hundred and
Speaker 4: forty three dollars back, which is more than they will pay.
Speaker 4: But the most help we got was from an unusual source.
Speaker 4: So I suddenly noticed these signs from H and R Block.
Speaker 4: H and R Block is like they're just you know,
Speaker 4: one of these accounting groups that'll do your taxes. So
Speaker 4: a lot of people they just got to HNR Block
Speaker 4: and you know, drop all their tax documents. So they're
Speaker 4: big signs. They were like get your taxes done, to
Speaker 4: get your climate action incentive, and so I was like,
Speaker 4: this is amazing because it's actually a third party that's
Speaker 4: just being practical.
Speaker 1: Maybe you're wondering how exactly you would get money back
Speaker 1: from the government if you lived in Canada. The exact
Speaker 1: calculation will depend on where you live, because, as Kat explained,
Speaker 1: there isn't one corbon pricing system across the country. However,
Speaker 1: in most provinces, the federal government applies some form of
Speaker 1: carbon pricing, which means goods or fuel that are carbon
Speaker 1: intensive are a little bit more expensive based on the
Speaker 1: emissions that are attached to them. The government calculates roughly
Speaker 1: how much extra you, the consumer, are paying for those
Speaker 1: and then sends that money back to you. We check
Speaker 1: the numbers for twenty twenty two, and an individual in
Speaker 1: Ontario would get four hundred and eighty eight dollars. In
Speaker 1: the jargon of policymakers, this is revenue neutral. The government
Speaker 1: sends back almost all of the money it collects. It
Speaker 1: does keep a small amount for very clear purposes.
Speaker 4: Ninety percent of the money went back to people in
Speaker 4: the provinces. It did not go to the provinces. That
Speaker 4: was a very important distinction. This other ten percent was
Speaker 4: for small, medium sized businesses, indigenous people's public institutions. So
Speaker 4: it wasn't all the money going back to people. It was,
Speaker 4: but it was done in a thoughtful way, thinking about
Speaker 4: who's going to be impacted. And then you get into nuances, right,
Speaker 4: you bring in policy and you have to iterate. So
Speaker 4: I mean at the beginning it was already complicated enough.
Speaker 4: I said, we're probably going to screw up in some areas,
Speaker 4: doesn't matter, just do it. We will adjust and I
Speaker 4: have to hand it to the public servants because it
Speaker 4: was extremely complicated from an administrative perspective. Now, I was
Speaker 4: kind of hoping like someone showed up your door with
Speaker 4: a really big check, but obviously that doesn't happen. It's
Speaker 4: automatic deposit for most people, so that's harder because you
Speaker 4: want people to see it.
Speaker 1: And you are not a minister now, but you tweeted
Speaker 1: your most recent climate action incentive payment.
Speaker 3: Right.
Speaker 4: I was excited. I just I got home. I was
Speaker 4: traveling in Europe and I was like, wait, what's this
Speaker 4: from the government and it's like, hey, guess what, you
Speaker 4: got a deposit? And I was like, oh, my climate
Speaker 4: action incentive good policy. So I was really excited to
Speaker 4: open up the envelope. It said that my annual entitlement
Speaker 4: was seven hundred and forty five dollars and we're getting
Speaker 4: this in two installments, so I got three hundred and
Speaker 4: seventy two dollars and fifty cents.
Speaker 1: After the break, I asked Kat about the pushback and
Speaker 1: got her advice for anyone wanting to implement a corbon tax.
Speaker 1: By the way, if you want to hear my interview
Speaker 1: with Justin Trudeau from October, and you should because it's
Speaker 1: one of the most popular episodes, you can find a
Speaker 1: link in the show notes. And if you're enjoying this conversation,
Speaker 1: consider leaving a review. It really makes a difference. A
Speaker 1: recent one from Artichoke eighty two said, every time I
Speaker 1: started to give the guests the side I the host
Speaker 1: would ask the right question, give the right context, and
Speaker 1: leave it up to the listener to pay attention. Thanks
Speaker 1: Artichoke eighty two. If you do leave a review, we
Speaker 1: might read it on a future episode of the show. Now,
Speaker 1: what are the main reasons that people continue to oppose
Speaker 1: it even today?
Speaker 4: Their ideologues? I mean, okay, I will that's a flip
Speaker 4: at answer. It deserves a more serious answer. There are
Speaker 4: conservative politicians who think this is a winning issue. I
Speaker 4: don't know why in Canada they still think it's a
Speaker 4: winning issue because we've now fought two elections on it.
Speaker 4: And it goes back to every policy that any policy
Speaker 4: you design in climate you need to think about regular people.
Speaker 4: And as I say, I think it's very helpful that
Speaker 4: I came from Hamilton, a steel town, and people care
Speaker 4: about like they generally, I think they care about climate
Speaker 4: change and they believe in climate change. But I think
Speaker 4: that some people may not understand how the system works.
Speaker 4: So when you have politicians who actually mislead or lie,
Speaker 4: we sometimes call it like disinformation. I'm like, yeah, sometimes
Speaker 4: it's actually just lies. You know, it can be very
Speaker 4: confusing for your average person. And so you will see
Speaker 4: a difference in the perspective on pricing by provinces in particular,
Speaker 4: like in Alberta, Saskatchewan, where you've had humongous opposition from
Speaker 4: the highest levels and so you know, just saying things
Speaker 4: that are patently untrue. Now I had to be very
Speaker 4: loud on this, like I had every question in the
Speaker 4: question period in our House of Commons from the opposition
Speaker 4: some days on pricing and so it was a real
Speaker 4: fight and it really wasn't that pretty. But the good
Speaker 4: news is you have a lot of allies on pricing pollution.
Speaker 4: So to anyone who's thinking about this beyond, I think,
Speaker 4: give the money back so you have a good message.
Speaker 4: I think, like, go get people outside the box. I
Speaker 4: had religious leaders and religious groups supporting it. We had
Speaker 4: health professionals, we had young people who were very vocal
Speaker 4: about their future. We had economists, we had environmentalists, we
Speaker 4: had indigenous leaders. So I think you also need to
Speaker 4: get as many people as you can, like I found
Speaker 4: a bunch of reasonable conservatives who also supported it.
Speaker 1: And so talking about this at a personal level, this
Speaker 1: is your first job as a minister. You're taking through
Speaker 1: what is probably one of the hardest policies that had
Speaker 1: to go through the government at that time. Give us
Speaker 1: a few examples of how bad it got and how
Speaker 1: you found a way to deal with it.
Speaker 4: It started off really early. I was given the Moniker
Speaker 4: climate barbie. That was like, uh, probably week one or two.
Speaker 4: I did nothing with it. I ignored it, and in fact,
Speaker 4: my advisors like, you know, I have my team and
Speaker 4: they're like, don't do anything. It was irritating because obviously
Speaker 4: it was trying to belittle me because of the color
Speaker 4: of my hair or something, and also just personally, I
Speaker 4: never played with barbies, so I was like, this is
Speaker 4: really weird. But it got a lot worse. There was
Speaker 4: a lot of I got threads, death threats, like a
Speaker 4: lot of things sent to my office, like all of
Speaker 4: those things. I ended up having security, And you know what,
Speaker 4: I'm just gonna say it, like there are some right
Speaker 4: wing politicians that are completely responsible for adding fuel to
Speaker 4: the fire because they would just say things that were
Speaker 4: patently untrue and that people would get riled up because
Speaker 4: they were worried about being able to pay their bills
Speaker 4: or their jobs. And so I suddenly became like I
Speaker 4: was like trying to be the most like the smartest
Speaker 4: policy more people get money back, like trying to talk
Speaker 4: to conservative like and it was. It was bad, And
Speaker 4: I was also worried We're gonna lose an election on it.
Speaker 4: So I felt a ton of personal pressure. So I'd
Speaker 4: wake up in the middle of the night and I'd
Speaker 4: be like, Okay, who else can support it? Like what
Speaker 4: can I do? What massage can I have? And then
Speaker 4: I always had to fight now I'm Irish. My dad
Speaker 4: is from Dublin, as ours five brothers. I'm from Hamilton.
Speaker 4: It's a hard scrabble steel town and I'm a competitive swimmer,
Speaker 4: so you put your head down, your drive for the walls.
Speaker 4: So I'm tough, but it was a lot like I
Speaker 4: did feel a heavy weight because I thought, gosh, if
Speaker 4: we don't land this, we're not going to be able
Speaker 4: to have a credible climate plan. But worse, we're going
Speaker 4: to lose the belief in people who want serious, credible
Speaker 4: action and climate change. In particular, the ones that impacted
Speaker 4: me most were young people, and by the way, my
Speaker 4: three kids were on me every day.
Speaker 1: One of the things that is part of the Pricing Act,
Speaker 1: which is that it's going to increase the amount to
Speaker 1: pay for pollution. So now it's at fifty dollars a ton,
Speaker 1: it's going to go all the way up to one
Speaker 1: hundred and seventy dollars a ton. Is it sustainable?
Speaker 4: Well, once again, I mean nothing changes in the sense
Speaker 4: that you're going to pay more, but you get more
Speaker 4: money back, and in fact, hopefully you continue to proportionally
Speaker 4: pay less because you have options that will enable you
Speaker 4: to reduce your emissions. But it's hard, right, Like obviously
Speaker 4: you know, people like it's going up, and then people
Speaker 4: there's always you know, people who want to fight it
Speaker 4: are opportunists, so they'll say, well, the gas prices are
Speaker 4: so high, it's all the price and pollution, which is
Speaker 4: obviously not at all true. Like the we've seen humongous
Speaker 4: fluctuations in gas prices as a results of the rest
Speaker 4: is the legal war in Ukraine, and because people are
Speaker 4: very price sensitive to gas. It is hard. And when
Speaker 4: politicians kind of say, well we've landed that, I say,
Speaker 4: you've never landed it. You always have to fight it.
Speaker 4: You always have to be like good in your comps,
Speaker 4: making sure you're explaining to people they're getting more money back, right,
Speaker 4: And also what's going on. Our emissions are going down,
Speaker 4: like we're tackling we're doing our part to help tackle
Speaker 4: climate change.
Speaker 1: What has been the effect of the legislation so far
Speaker 1: on emissions?
Speaker 4: Well, I mean initially with a price of ten dollars
Speaker 4: or twenty or thirty forty, it's having you know, not
Speaker 4: the it has to continuously go up to have the
Speaker 4: bigger impact. But when you look at our twenty thirty target,
Speaker 4: it's a significant part of the plan, and it also
Speaker 4: has other impacts on innovation that is in price competitive
Speaker 4: right now, it suddenly becomes a very realistic option. Yeah,
Speaker 4: and that's everything from carbon capture storage to electric vehicles.
Speaker 4: So you're seeing it having a behavioral change on folks
Speaker 4: and that's of course the intent.
Speaker 1: The way you've designed the Pricing Act, it's supposed to
Speaker 1: try and make sure that the large emitters pay more,
Speaker 1: but also that they are competitive with industries globally. How
Speaker 1: do you stop those companies from moving abroad where there's
Speaker 1: no carbon tax.
Speaker 4: Well, that's why we brought an output based pricing system.
Speaker 4: So you said, don't make it complicated. That is the
Speaker 4: compleated part. I mean, competitiveness is an issue, right The
Speaker 4: last thing we want to do or send Canadian jobs
Speaker 4: to a country that's polluting. That's not the intent at all.
Speaker 4: We want companies to have the incentive to reduce their emissions,
Speaker 4: to invest in technologies that'll mean that they are polluting less.
Speaker 4: That's the whole point of an output based pricing system.
Speaker 1: A complex system that is too involved to describe right now,
Speaker 1: but it works for Canadian industries. There is something else
Speaker 1: that could work globally a carbon border tariff or carbon
Speaker 1: border adjustment.
Speaker 4: So for border carbon adjustments, an example often talked about
Speaker 4: is like steel. So you're importing steel, you're using it
Speaker 4: in Canada, but you've decided you're going to go and
Speaker 4: get steal from a heavy polluting country because the steel's cheaper,
Speaker 4: but the carbon footprint is cheaper. So the government just says, Okay,
Speaker 4: at the border, we're going to adjust for the fact
Speaker 4: that your emissions or your profile are much higher, so
Speaker 4: we're going to put a tariff on that. And that
Speaker 4: will mean that there isn't this competitiveness issue, that there
Speaker 4: isn't a drive to like the bottom where we're going
Speaker 4: to go buy aluminum for steel from wherever where it's
Speaker 4: got a huge carbon footprint and it's really cheap because
Speaker 4: they haven't put a price on pollution. My background is
Speaker 4: in trade lass, so I certainly believe that we need
Speaker 4: to bring climate in trade together. I think that's very important.
Speaker 4: Climate is not just an environmental issue, it's an economic
Speaker 4: issue quite frankly, because I mean we're talking about transforming
Speaker 4: the economy now.
Speaker 1: Canada has the third largest stone supply of oil and
Speaker 1: that's a vast fortune to be made. Do you think
Speaker 1: the Cambon pricing plan will be enough to stop Canada
Speaker 1: from exploiting all that resource or not?
Speaker 4: That's kind of a weird question. We can't all continue
Speaker 4: exploiting all of the fossil fuels anywhere. That's actually just
Speaker 4: a science thing. Do I think that putting a price
Speaker 4: on pollution will help create the right incentives for Canada's
Speaker 4: oil and gas to be cleaner? I certainly hope so.
Speaker 4: I think the proofs in the pudding. But the reality
Speaker 4: is we've known about climate change, and oil and gas
Speaker 4: companies have known about climate change, and you know, they
Speaker 4: need to diversify their portfolios and they need to drastically
Speaker 4: reduce their emissions. We need to see outcomes, and that
Speaker 4: includes in Canada. Because often we hear from the oil
Speaker 4: and gas sector we're the cleanest in the world. That
Speaker 4: is not true. The oil stands are far from the
Speaker 4: cleanest in the world. Sure, maybe you've reduced your emissions intensity.
Speaker 4: One emissions intensity is in emission reductions. The planet doesn't
Speaker 4: really care. But emission's intensity. It's not irrelevant to you know,
Speaker 4: a climate plan. But you need to see emission reductions,
Speaker 4: and we're just we're not really seeing that. So anyway,
Speaker 4: it's a complicated space, like this is the biggest challenge
Speaker 4: for Canada. But the reality is largest source of emissions.
Speaker 4: Twenty five percent of Canada's emissions are from the oil
Speaker 4: and gas sector. It's been increasing in Alberta and Saskatchewan
Speaker 4: are the two provinces that have increased. So everyone else
Speaker 4: is doing hard work, but there's no point. You could
Speaker 4: plant every tree, you could retrofit every building, You're not
Speaker 4: going to be able to get Canada's emissions to go down.
Speaker 4: I was just watching Borgan. I bet you've got Borgan watchers.
Speaker 4: Do you watch Borgan?
Speaker 1: Acshat haven't?
Speaker 4: It's a Danish political show. You have to watch it anyway. Borgan,
Speaker 4: who's awesome. She was like my inspiration for being able
Speaker 4: to take questions. But it's actually good because in this
Speaker 4: season of Borgan, it's like whether they should go exploit
Speaker 4: more fossil fuels in Greenland. And it's a big question, right,
Speaker 4: like is it ethical if it comes from Canada? Is
Speaker 4: it ethical? Look? Does Canda have good better regulations?
Speaker 2: Yes?
Speaker 4: Is it like we care about humor rates?
Speaker 3: Yes?
Speaker 4: But the problem is like in a way, actually like
Speaker 4: working on climate because it's just up and down. Missions
Speaker 4: either go up or they go down. The realities the
Speaker 4: missions have to go down. They have to go down
Speaker 4: in Canada, they have to go down everywhere. So now
Speaker 4: is it complicated. We're not off fossil fuels now, so
Speaker 4: do we need to figure that out? Yes, but we
Speaker 4: need to figure it out fast and everyone needs to
Speaker 4: do their part.
Speaker 1: Right now, I'm going to ask thank you some questions
Speaker 1: that we've kind of touched on in our conversation so firm,
Speaker 1: So I'm going to ask you to keep the answers
Speaker 1: to maybe a sentence, if it's possible.
Speaker 4: Do you think I can do one sentence acshot?
Speaker 3: I don't know.
Speaker 1: What do you think other countries can learn from Canada's
Speaker 1: carbon pricing system?
Speaker 4: Make it no longer free to plute? Give all the
Speaker 4: money back?
Speaker 1: What advice do you have for people who are charged
Speaker 1: with getting a buy in on this kind of carbon
Speaker 1: pricing system?
Speaker 4: Care about real people?
Speaker 1: How do you think the current system can be improved?
Speaker 4: It's got to ratchet up.
Speaker 1: Price has to go up, but there's already ratcheting up
Speaker 1: included in it.
Speaker 4: Right, you have to stick to it, right, We can't
Speaker 4: have a different political party that comes in and dismantles it.
Speaker 1: Do you think the carbon pricing system is going to
Speaker 1: be up for grabs in the next elections?
Speaker 3: Oh?
Speaker 4: I think hope. Spring's eternal for conservative politicians. I think
Speaker 4: regular people understand it can't be free to pollute.
Speaker 1: Okay. One of the big ideas being discussed by Justin
Speaker 1: Trudeau is creating a minimum price on carbon. Is that
Speaker 1: how he's hoping that he can export what Canada has
Speaker 1: learned from the pricing scheme across the globe. Oh?
Speaker 4: Right, So he said that there should be a minimum
Speaker 4: price on carbon globally. Yeah. I mean, I think it's
Speaker 4: just good policy. But it's not just Justin Trudeau. It's
Speaker 4: like economists, it's there's a wide range of people who
Speaker 4: believe in the evidence shows that it works. So I
Speaker 4: think it's really important. I think that. I mean, if
Speaker 4: we had a price on pollution, it can continue to
Speaker 4: go up. You would see a lot of innovation that
Speaker 4: we need and a lot of innovation that's now there
Speaker 4: that we need to scale but it's too expensive. You'd
Speaker 4: see actions by companies that pollute a lot that they
Speaker 4: would make serious investments to stopping to pollute. So but
Speaker 4: having said that, you know you have to be able
Speaker 4: to land it politically and you do need to think
Speaker 4: about the impacts on real people.
Speaker 1: Well, this has been a wonderful conversation. Thanks for taking
Speaker 1: all those questions.
Speaker 4: Thank you, it was great. If anyone needs any help
Speaker 4: wants to put a price in pollution, I have a
Speaker 4: lot to say on this.
Speaker 1: Carbon pricing is complicated, both in how it is implemented
Speaker 1: and how it's politically perceived. But that's no reason not
Speaker 1: to try, because done right, it does work to reduce emissions.
Speaker 1: Thanks for listening to Zero. If you like the show,
Speaker 1: please rate and review on Apple Podcasts or Spotify. Shared
Speaker 1: with a friend or someone who likes Danish political thrillers.
Speaker 1: Zero's producer is Oscar Boyd and senior producer is Christine
Speaker 1: driskell Ar. Theme music is composed by Wondering. Special thanks
Speaker 1: this week to Kira Bindram, Dave Sawyer, Colonel Wagner, Niallie
Speaker 1: Haramo Plata and Abreyer Ruffin. I am Akshatrati Back next week.