VANCOUVER (Reuters) - Canada should push ahead on its own with climate-change policies that would a price on carbon emissions, and not wait for the United States to act, a federal panel urged the government on Tuesday.
Harmonizing the two closely tied countries’ rules for cutting greenhouse gas emissions is a reasonable idea, but Ottawa should develop its own rules first because U.S. climate-change policies are currently caught up in political uncertainty, the panel said.
The National Round Table on the Environment and the Economy recommends Canada take a gradual approach to harmonization with the United States so it can meet its targets for cutting emissions and address future economic concerns.
“This phased in approach would ensure we are ready and prepared to harmonize effectively and advantageously if the U.S. is ready to move,” the government-appointed advisory panel wrote in a report.
The agency’s recommendation contrasts with the Conservative government’s arguments that Canada’s efforts to curb greenhouse gas emissions must be done in tandem with the United States, by far the country’s largest trading partner.
The Conservative government, with roots in energy-rich Alberta, has complained the economy would be damaged if it does not work with Washington on curbing industrial emissions just as it does now on auto emissions.
The report cautioned that attempting to just harmonize the two counties’ targets for greenhouse gases would result in significantly higher carbon prices in Canada than in the United States.
It also warned that policies that just try to harmonize the two countries’ carbon prices would results in Canada missing its goal of cutting greenhouse gas emissions to 17 percent below 2005 levels by 2020.
“Our proposed approach would walk a middle line between harmonizing with the U.S. on carbon price and on emission-reduction targets, balancing competitiveness and environmental concerns,” the panel wrote.
The panel recommends Ottawa develop a national cap and trade system even if the United States is not ready, and establish a “price collar” on carbon to ensure it does not get too far above the price in the United States.
The Conservative government has been cool to the idea of a cap and trade system, but Ontario, Quebec, British Columbia and Manitoba are planning to join in a regional plan with several western U.S. states.
If the United States eventually establishes its own national system, Canada’s earlier start would mean it is ready and its industries able to compete at a common carbon price, the report said.
“While no approach is risk free for Canada, smart policy choices represent an opportunity for Canada to manage this risk,” the panel said.
Reporting Allan Dowd; editing by Rob Wilson