Nova Scotians will pay more for electricity, gasoline, and home-heating over the next four years as part of the province’s plan to reduce its carbon footprint and avoid a carbon tax Ottawa announced it will impose on four other provinces beginning this January. But Premier Stephen McNeil insists Nova Scotia consumers will pay much less under a homegrown cap-and-trade program which Ottawa has approved in lieu of collecting a carbon tax.
“Today you see the federal government has accepted a plan which would see a one-cent-a-litre increase on gasoline in Nova Scotia compared to what would be an 11-cents-a-litre rise in neighbouring provinces which will get the federal backstop [carbon tax],” boasted McNeil at a news conference yesterday. “We have a position put forward that will see a one per cent increase in electricity rates; if the federal backstop was here that would be an eight per cent increase [over four years].”
The province expects to collect $25 to $30 million annually in revenue from 20 companies that produce more than 50,000 tonnes a year of greenhouse gas emissions (GHG). Those companies include Nova Scotia Power, Northern Pulp, Irving Oil, Heritage Gas, and Lafarge Canada.
Jason Hollett, the executive director of climate change with the provincial Department of Environment, says the new revenue will be held in a Green Fund. Discussions are continuing about whether to use the money to help businesses become more energy efficient and/or help low-income people who will be most affected by higher prices for fossil fuels.
Hollett says at this stage it’s impossible to tell how the federal plan to send rebate cheques directly to people in New Brunswick, Ontario, Manitoba, and Saskatchewan stacks up against the Nova Scotia plan. The federal plan prices carbon at between $20 and $50 a tonne, while Nova Scotia is pegging the price at $25/tonne.
To keep costs low for both consumers and polluters, the Nova Scotia government will distribute free allowances. Nova Scotia Power will pay just 10 per cent of the total cost of reducing its emissions while companies that distribute fuel (such as Irving Oil and Heritage Gas) will pay only 20 per cent of their costs. Figures produced by the provincial Department of Environment show that under cap-and-trade the price of home heating oil is projected to bump up 1.4 cents a litre over four years compared to a leap of 13.6 cents a litre under the federal carbon tax.
Hollett noted that in Quebec — the other Canadian province which implemented cap-and-trade year several years ago — companies in the fuel distribution business pay 100 per cent of their emission costs. The government’s break for fuel distributors here explains why it is predicting a more modest price increase for Nova Scotia consumers.
Moreover, the McNeil government is allowing multinational companies such as Northern Pulp and Lafarge Canada to pay zero per cent of their cost of reducing emissions for fear the companies will pack up and relocate if their carbon bill becomes higher than in other countries where they also do business. (Interestingly, Northern Pulp’s Asian parent company recently purchased three new plants in British Columbia, which has had a carbon tax for many years.)
The total amount of carbon the province has chosen to cut over the next four years to comply with the federal reductions is 650,000 tonnes. That’s on top of 1.4 million tonnes the province is already cutting as a result of provincial legislation that established hard caps on carbon emissions from Nova Scotia Power and renewable energy targets out to 2030 and 2040. The 650,000-tonne cap is a policy decision of the McNeil government that represents “a 30-40 per cent reduction” in carbon emissions below 1990, says Jason Hollett, what he calls “one of the most ambitious targets in the country.”
The cap looks more impressive when the province uses the federal benchmark of 2005 instead of 1990 as its starting point. Using 2005 as the benchmark, our carbon emissions will drop 45 to 50 per cent by 2030. Then again, after tar sands Alberta, Nova Scotia’s dependence on coal makes our province the highest per capita emitter of carbon in the country.
Meghan McMorris is the community energy coordinator with the Ecology Action Center. McMorris says that while 650,000 tonnes is “a good start” and the province deserves credit for developing its own plan to reflect the Nova Scotian context of a few big industries and an aging demographic, the cap doesn’t go nearly far enough to “stay within a 1.5 degree rise in global warming.”
“We believe that in line with the Paris agreement and the International Panel on Climate Change’s most recent warning, the target should be a 50 per cent reduction below 1990 levels,” said McMorris. “Climate change affects everybody and we need to move faster.”
Nova Scotia Power is responsible for over 40 per cent of carbon emissions and is counting on imports from Muskrat Falls by 2020 to lower that. It can also burn natural gas instead of coal. The winding down of offshore natural gas production at the end of this year eliminates another potential large emitter.
What happens to cap-and-trade if Nova Scotia becomes home to a massive liquefied natural gas plant proposed for Goldboro or the Strait of Canso is something neither the premier nor Jason Hollett wanted to talk much about yesterday, probably because the “free” allowances the government is handing other polluters wouldn’t stretch very far with the addition of a carbon-emitting gorilla of an LNG plant.
McNeil heads to Calgary today to meet with executives at Pieridae Energy, which is expected to make its investment decision about the proposed LNG plant by the end of this year. The shelf life of Nova Scotia’s cap-and-trade deal is four years. It will expire before any LNG plant would be in operation, a fact Hollett says will allow whatever government is elected the “flexibility” to revise the scheme or come up with a whole new model if a large fossil fuel industry happens to set up shop in a job-starved part of the province eager to welcome a major employer.