Surprise! The world is still a carbon based economy and the Trudeau Liberal’s approach to climate change will probably only make it worse.

Canadians are rightly concerned about climate change and want to do something about it. But the Liberal's carbon taxes and emissions caps have done little to change carbon emissions in Canada. Today’s announcement by the Liberals to cap oil sands emissions only provides more of the same, except with the potential to violate provincial jurisdiction on the right to develop natural resources. 

This is because of one simple fact that much of the Liberal’s climate policy likes to ignore; the lack of low cost, readily available alternatives to high carbon consumer products and practices.

Many people who are in charge of climate change policy believe that Canadians will buy less carbon energy when the price for it is higher; or, in economic terms, they believe that carbon energy is price elastic. This assumption is greatly dependent on what time horizon is used for analysis, as well as on the availability and affordability of substitute goods for carbon energy over that period of time.

Unfortunately, this means that many carbon pricing models assume in some way that the cost of carbon energy will automatically lead to new technologies being developed, existing in adequate quantity, and be priced affordably enough to be widely adopted in time to meet emissions reductions targets.

However, any Canadian who has filled a tank of gas over the last several months knows these people have it backward. Even with record breaking prices for gas, Canadians aren’t buying less of it, they’re just paying more for it. 

While things like wind and solar energy exist and prices are coming down, they are not doing so at a rate that is affordable or readily available to the general public, particularly on a global scale. In the short term, current inflationary pressures and global supply chain issues will rightly push politicians to address cost of living issues. This cannot be done while pretending that cheap and accessible low carbon alternatives are available to the masses right now. This is why provincial governments have been eliminating fuel taxes over the last several months.

Outside of the pain Canadians are currently feeling at the pumps, there have been several other proof points of this fact that have been ignored by the Trudeau Liberal government.

Last October the US Energy Information Administration, or the EIA, released a report with modeling that proved this to be true. Their report outlined that “global energy consumption and energy-related carbon dioxide emissions will increase through 2050 as a result of population and economic growth”. The report also predicts that global demand for energy will rise by 50% between 2020 and 2050, and carry with it 24.7% higher annual carbon dioxide emissions. If this agency had data that low cost, readily available alternatives to carbon energy would be available to the global masses over this time period, their report would look different.

Then, at the end of June at the G7 summit, French President Emmanuel Macron was overheard telling American President Joe Biden that he had spoken to UAE leader Sheikh Mohammed bin Zayed al-Nahyan about oil production. "He told me two things. I'm at a maximum, maximum (production capacity). This is what he claims. And then he said (the) Saudis can increase by 150 (thousands barrels per day). Maybe a little bit more, but they don't have huge capacities before six months' time," said Macron to Biden. 

The upshot of this exchange is the Saudis posturing with the French on the fact that they literally have them over a barrel on oil prices because they control the big levers of global supply. Western countries like Canada that have curtailed domestic production have only offshored supply and wealth to countries like Saudi Arabia who have little incentive to use wealth created by the production of carbon energy to develop low carbon alternatives. 

And this week, Justin Trudeau took major political heat for providing an exemption to sanctions against Russia over its invasion of Ukraine by sending parts of a Russian natural gas pipeline back to Germany. The National Post reported that “a two-year waiver would allow six Siemens Energy turbines, which were in Montreal for repairs, to be returned to Germany for use in the Russian state-owned Nord Stream 1 pipeline”. If the curtailment of Western carbon energy production and carbon pricing in Western nations had actually reduced demand for Russian carbon energy, this would never have happened. 

Again, this is because the world does not have the low cost, readily available substitutes for carbon energy it needs to meet its emissions reduction targets. Curtailment of Canadian carbon energy supply and taxation of carbon energy used in Western countries is not developing these alternatives at a pace needed to address climate change, global supply chain issues, or inflationary pressures caused by high carbon energy prices. 

That's why if the Trudeau Liberals were serious about addressing climate change, they would be doing things like rapidly building public transit in areas that don’t have enough access to it. They would be beefing up Canada’s electric grid to allow for the electrification of vehicles while preventing that infrastructure from vulnerabilities. They would be securing access to the rare earth minerals needed to make things like batteries to store energy produced by wind and solar, and electric vehicles. Also, this storage would be more available and affordable to consumers. Canada would have more ability to produce its own consumer goods, instead of being reliant on purchasing goods manufactured from high carbon emitting nations. And, the Liberals would be doing all this while preventing the scandal and inefficiency seen in previous Liberal green energy schemes.

And in the meantime, Canada would be fully self-sufficient on carbon energy produced in our country under its strict environmental regulations. The taxation and royalties that governments receive from these efforts would in part be used to develop alternative goods, with the understanding these goods and intellectual property would remain and be produced in Canada for the creation of Canadian jobs and wealth in the long term. Neither of these things happen when Canada imports oil.

Unless the Liberals pull their heads out of the sand and address these facts, more Russian turbines will be used, more Saudi oil will be produced, and more goods produced with energy from coal plants in China will be shipped around the world. There will be increased carbon emissions, and more civil unrest from the effects of climate change and from the high cost of carbon energy perpetuated by Western governments who have been blinded by a narrow band of public policy informants who are rarely effectively challenged by the media, politicians or academics.

Given the pressure the world is under to address inequality and climate change, none of these issues should come as a surprise to anyone, especially the Liberals.