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Federal emissions-reduction plan would lock in carbon pricing, boost ZEV incentives

The federal Liberals released their plan to cut greenhouse-gas emissions Tuesday morning. Much of it is a restatement of programs already in place, with pledges of progress reports next year, but it includes new promises, too.

News

Federal emissions-reduction plan would lock in carbon pricing, boost ZEV incentives

By David Reevely
Prime Minister Justin Trudeau is joined by Minister of Natural Resources Jonathan Wilkinson, left, and Minister of the Environment Steven Guilbeault during a press conference outside the GLOBE Forum at the Convention Centre in Vancouver, B.C., in March 2022. Photo: Chad Hipolito/The Canadian Press
Mar 29, 2022
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The federal Liberals released their plan to cut greenhouse-gas emissions Tuesday morning. Much of it is a restatement of programs already in place, with pledges of progress reports next year, but it includes new promises, too.

Here’s what you need to know.

Back-loaded schedule: The government promises to cut emissions 40 per cent from 2005 levels by 2030, the low end of a previous commitment to make cuts of 40 to 45 per cent. The new plan sets an interim objective of a 20 per cent cut by 2026. In other words, the country is to do in the final four years as much as it’s done in the first 21.

Locking in carbon prices: As Conservative leadership candidates like Pierre Poilievre campaign against the federal backstop levy on emissions, the government will seek to “enshrine future price levels in contracts between the government and low-carbon project investors, thereby derisking private-sector low-carbon investments,” the plan says, and consider a law to “support a durable price on pollution.”

That means taking steps to protect investments that depend on carbon pricing from future governments with different policy ideas.

Industries facing the biggest changes: Electricity generators across the country are expected to cut their emissions by 88 per cent, but a big part of that reduction (from 118 megatonnes to 61 as of the last reckoning in 2019, with a further 47 to come) is already done.

The oil and gas sector, whose emissions have increased since 2005, is expected to cut them from 191 megatonnes to 110. Some of that is to be done with the help of a long-promised tax credit for capturing and storing emissions, with details to be “provided soon.” The plan promises to work with industry, provinces, Indigenous partners and civil society on how to apply a steadily lowering emissions cap, but has no specific new measures for the sector.

More money for ZEVs: The plan pledges $1.7 billion in further incentives for purchasers of light-duty zero-emissions vehicles (passenger cars and trucks), $400 million for more charging stations and $500 million through the Canada Infrastructure Bank for larger-scale charging and zero-emissions refuelling locations. It also promises mandates to require 60 per cent of new light-duty vehicles to be ZEVs in 2030, and programs to support ZEVs for medium- and heavy-duty uses.

Other new promises:

  • A green-buildings strategy, incentives to get off fossil-fuel heating and programs for retrofits.
  • Support for interprovincial electricity links to take advantage of surplus clean power, including the Atlantic Loop.
  • Energy-efficiency retrofit subsidies for smaller projects, “filling a gap in the federal suite of industrial programming.”
  • Funds to help farmers use less energy and fertilizer, and to prepare the industry for a changing climate.

Instant reaction:

Global Automakers of Canada, the Canadian Vehicle Manufacturers’ Association and Canadian Automobile Dealers Association said the plan “lacks clarity around already announced commitments for ZEV purchase incentives and charging infrastructure, and what is actually necessary new funding to encourage Canadians to make the switch.”

Environmental Defence’s quick take: “Unfortunately, the level of ambition reflected in this plan continues to fall short,” especially in that it “lets the oil and gas sector off from doing its fair share.”

#Canada Infrastructure Bank #climate change #electric vehicles #Justin Trudeau #Oil and gas

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Photo: Chad Hipolito/The Canadian Press

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