Carbon price in 2030 | Quebec sets the bar much lower than Ottawa

(Quebec) The price of carbon in Quebec should reach $97 in 2030 according to forecasts by the Ministry of the Environment, a price too low to allow it to reach its climate target, and much lower than the $170 make Ottawa pay at the same time.

Charles Lecavalier
The Press

In the update of his Plan for a green economy presented Thursday, Minister Benoit Charette estimates that he manages to achieve 51% of the objective of reducing 37.5% of GHG emissions by 2030 compared to 1990.

“This estimate is based on a set of assumptions, including a price of the emission rights of the SPEDE [le marché du carbone] reaching $97 per ton in 2030, which is consistent with private sector forecasts,” said a document provided to the media.

This is much less than in the federal system, where a tonne of carbon will cost $170 in the provinces where it will apply in 2030. According to Pierre-Olivier Pineau, professor at HEC Montréal and specialist in the energy sector, c is the demonstration that the carbon market “does not work as it should”.

“This market should be a constraint, and it is not a constraint. The price should be much higher than that. There will have to be negotiations to come between Quebec and Ottawa because it will not be able to work with such a difference in price, ”believes Mr. Pineau.

22.5 cents per liter

The carbon market is a rather complex system that imposes a cap on greenhouse gas (GHG) emissions for the industrial sector and the distributors of fuels – natural gas, propane and gasoline, for example. The basic principle: tax the polluters. At $97, the price per tonne of carbon is equivalent to a tax of 22.5 cents per liter of gasoline for motorists. At the last auction, the selling price was $37.14 per ton.

But there are several mechanisms, such as free allocations, to reduce the industrial bill. In Mr. Pineau’s opinion, the price of $97 is too low to achieve the Quebec target, and the “emissions cap” is greatly reduced by the large quantity of emission rights available.

On the side of Mr. Charette’s cabinet, we reply that we cannot compare the federal system and the provincial system: “$97 in a carbon market cannot be compared to $170 in a carbon tax system”, explains communications director Émilie Toussaint. The amounts earned by the Quebec carbon market are reinvested in the fight against climate change; this is how Mr. Charette largely finances his $7.6 billion plan over five years, or $1 billion more than his previous plan.

Despite this, Quebec only reaches 51% of its target of -37.5%.

In the transportation sector, the government is raising its target for electric vehicles on the road in 2030. Quebec will tighten its zero-emissions standard and will force car dealerships to offer slightly more electric vehicles in Quebec by 2030. The government’s target Legault was 1.5 million electric vehicles, it will now be 1.6 million, out of 5.6 million light vehicles.

“I confirm that we will come with a reinforced version […] there will be reinforcement of the zero-emission vehicle standard,” said the Minister of the Environment at a press conference.

The Press revealed in February that the draft regulation submitted by Mr. Charette would have no significant effect for eight years. The minister is therefore slightly improving his balance sheet.

It also announces additional investments of $115 million to “support the electrification of urban buses”, and $46.4 million in the Écocamionnage program, to support electrification, efficiency and the conversion to fuels that emit less GHGs in the trucking industry.

But on the merits, Mr. Charette’s plan only identifies 48% of the reductions estimated for 2030 in the transport sector. “Taking into account all the actions planned in Quebec to fight against climate change, emissions from the transportation sector should be 29.6 [mégatonnes] in 2030,” the document reads.

However, the transport electrification budget has been cut by the Legault government. This is explained by a cut in the subsidy program for the purchase of electric vehicles, which was announced in the last Girard budget. Instead, the amounts will be used to help major polluters in the industrial sector reduce their GHG emissions.

Energy Minister Jonatan Julien explained that the government chooses to invest where GHG reductions are least costly per tonne. Quebec therefore plans an additional investment of $298.6 million in the EcoPerformance – Large Emitters program, “which supports the implementation of energy efficiency and conversion projects”. It also makes 100 million available to businesses that want to convert to electricity or “other low-carbon energy sources”.

They said