Monday, February 12, 2007

Harper plays environment card in Quebec
The prime minister will announce later today that his government is funneling some $1.5 billion toward environmental projects in various Canadian provinces. Reports indicate this will include over $400 million for Quebec. No doubt some of this money will pay for yet more wind power, which provides spectacular visible evidence of a commitment to clean energy (even if its actual power output is small and unreliable).


But will the Quebec package include support for the rehabilitation of Gentilly 2, Quebec’s only nuclear power reactor? And if so, does this mean Harper and company will also help Ontario and New Brunswick with their nuclear reactors?

You never know, they just might. As I said last summer (see “Made in Canada” Kyoto plan takes shape
), federal money for Quebec and Ontario environmental projects would solve two problems for the Harper Conservatives: the fiscal balance and Kyoto. You solve fiscal balance problems with big money. And you get giant-size greenhouse gas (GHG) emission reductions with nuclear power (which costs big money).

Alberta, which probably will not receive much of Harper’s environmental largesse, will foot a big part of the bill by virtue of the giant-size taxes its companies and citizens send to Ottawa every year. The problem is, only those-in-the-know know that it’s Alberta money that will pay for this. Everyone else thinks Alberta oil companies are corporate welfare bums. Some, like the federal NDP, make their living off this misperception.

So Harper has the tricky job of explaining to central Canada that Alberta—Canada’s biggest provincial GHG emitter—is paying its fair share for the environment (see How to fund Kyoto programs without hurting Alberta). How can he do this?

By establishing a carbon market, and tying emission credits with tax remissions. This would jibe perfectly with current political and elite thinking on this issue. And, as I said in Greenhouse gas reductions in the EU: talk meets reality, there are ways to soften the initial impact of carbon caps. This would make a trading scheme palatable to major emitters. I’ll explain in upcoming posts; stay tuned.



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