Here it is launched! We only have a few months left to tackle our foundation before it crumbles under our feet. Do we continue to patch up only the facade—ensuring a collapse—or do we dig in order to re-cement?
Posted yesterday at 9:00 a.m.
The dilemma is the same for the climate. We know that the most effective policies are green taxation and regulation, but these are not popular — especially since our society is heavily dependent on oil.
Although we need to strengthen these mechanisms, they are knocking against the walls of social acceptability.
In order to create a climate conducive to the implementation of ambitious climate policies consistent with the recommendations of the Intergovernmental Panel on Climate Change (IPCC), it is possible to turn to complementary methods, such as subsidies.
Inflation Reduction Act
The new budget law passed last week in the US Congress — Inflation Reduction Act (IRA) — is a perfect example. It’s the most significant US investment ever to tackle climate change, and its title doesn’t even mention the environment.
It’s not just a detail. In fact, this is the essence of the project; the act transforms environmental policies into industrial policies.
More specifically, the IRA is offering the colossal sum of US$369 billion to invest in various clean energy projects and reduce the country’s emissions by 42% by 2030.
The bulk of the strategy relies on targeted subsidies to the wind, solar and geothermal industries, as well as batteries to accelerate the transition to renewable energy and electric cars.
The IRA has succeeded where Clinton’s carbon tax and Obama’s carbon exchange failed: it balances the interests of corporate giants while offering a more ambitious climate plan than Canada1.
To do this, it broke free from the ideological shackles of economic efficiency and reimagined climate policy. A similar approach would be beneficial for Canada.
The Canadian case
Alberta and Manitoba are the Canadian provinces where citizens have the most doubts about the effect of human activities on climate change. So they vote against federal climate policies.
However, this vision is more linked to the lack of economic alternatives than to their real (in)understanding of climate science; their economy is based on the oil industry, they cannot see prosperity without exploitation, which leads them to deny the existence of the climate crisis.
It’s easier to believe his lies than to accept that our actions cause problems.
It is therefore essential to support the oil-producing provinces in their energy and economic transition; it is this support that will allow the advent of a pan-Canadian movement for the climate.
To do this, remember that the electrification of our economy will probably double our electricity consumption in the coming years. Indeed, 50% of Quebec’s energy — not to be confused with electricity, which is a type of energy — is from fossil sources. This ratio reaches 80% at the Canadian level.
There is a crying need: we need an industrial policy to accelerate the energy transition. We should not only subsidize the industry, but also regulate it — while ensuring the sustainability of ecofiscal mechanisms.
Moreover, the politico-economic benefits of the subsidy are most attractive; it doesn’t increase the cost of living, it decreases it — a nice feature in these inflationary eras.
Although the focus is on energy, there are other applications for the grant. For example, California is putting forward a bill that offers US$5,000 to individuals who do not own a car.
It’s the kind of proposal that drives the movement forward instead of dividing it. Once united, maybe we will be able to accelerate our race towards carbon neutrality.
A distinction must be applied for Quebec. Quebec’s support for climate action is impressive, as is the consensus on the Carbon Exchange.
Subsidizing renewable energy is desirable, but does not solve our main challenges, which reside in our planning policies of the last century.
Our goal is to achieve carbon neutrality before the foundation collapses. To do this, ecotaxation and regulation are effective methods, but they require a highly favorable social climate. This is where the subsidy comes into play; it secures popular support for climate policies and brings us closer to our intermediate objective — strengthening environmental taxation and regulation — which will ultimately allow us to achieve carbon neutrality.
It is necessary to start by digging before pouring the foundation.