2019 is an election year in Canada and campaigning is already underway. Taking early center stage is climate change. Whether it’s a policy to eliminate it, reduce it or price it, carbon is the new currency and political parties are battling over who will pay.

First, we have the Liberal Party seeking re-election. Under the leadership of Prime Minister Justin Trudeau, the Liberals ran and won on an environmental agenda in 2015. At the top of their list was putting a price on carbon pollution. Three years into their four-year term, the government delivered a national carbon price and is developing a Clean Fuel Standard. Both policies are ambitious and (either via tax or life cycle carbon analysis) are designed to curtail emissions. They also prove politically contentious when it comes time to explain to the public and industry what the price will be and who will bear the cost. With almost 10 months before Canadians go to the polls, the Liberals are facing projections from their own environment department showing Canada will fall far short of its greenhouse gas (GHG) commitments, as well as allegations from political opponents of a skyrocketing carbon price. This time around, Trudeau’s climate action is coming with a price tag.  

Second are the Conservatives, who so far have not released their environmental plan. They are, however, very clear in their opposition to pricing as a way to reduce GHG emissions. While we don’t yet know what climate policies the federal Conservatives would implement, it most certainly will not be a price on carbon. And for some voters, just knowing that could be enough. Consider the new Conservative government in Ontario as a good and recent example. Ontario Premier Doug Ford promised to repeal Ontario’s carbon pricing Cap and Trade Program if elected; he won, and he did.
Different parties bring different principles and values to public policy including carbon pricing; that’s no surprise. But even the broadest spectrum has some potential for common ground. Politics aside and a carbon price notwithstanding, every candidate wants to find solutions that will help the environment without hurting the economy. And that’s where ethanol comes in, strong.

Want a carbon price? Choose ethanol. Transportation continues to be one of the heaviest emitters of GHGs, and it is near impossible to meet any reduction target without addressing fossil fuel use. An effective carbon pricing system puts a visible price on the life cycle carbon emissions of all fuels. Simply put, the higher the carbon intensity of a fuel, the higher the price will be. Consumers and businesses will choose to use cleaner fuels to avoid paying a higher carbon price. Ethanol reduces GHG emissions by as much as 60 percent compared to gasoline, so the potential for increased biofuels use, including ethanol, can be especially large in jurisdictions that have a carbon price.

Oppose a carbon price? Choose ethanol. Carbon pricing might be in the spotlight, but regulations still do most of work (i.e., phasing out coal and biofuels mandates). Every year, Canada’s federal mandate reduces GHG emissions by 4.2 megatonnes, the equivalent of taking 1 million cars off the road. And now, Canada’s new CFS will use life cycle carbon analysis to incentivize the use of low-carbon fuels and technologies. Properly designed, the CFS will recognize the value of low-carbon fuels like ethanol, and establish market conditions to capture and return that value to producers, blenders and consumers. As for GHGs, analysis by Renewable Industries Canada shows that upwards of 20 megatonnes of annual GHG reductions could come from biofuels under the CFS, due mainly to higher ethanol blends (e.g., E15 to E25).

And, for economic growth, choose ethanol. It’s rare for an industry to increase production while at the same time reducing emissions, but that’s precisely what ethanol producers do. Ethanol facilities support agriculture and are anchor tenants in rural communities. Canadian renewable fuel producers create $3.7 billion in economic activity every year. In Ontario, local biofuels producers employ 733 people, buy approximately 145 million bushels of corn, and deliver $1.75 billion in economic activity. It is no coincidence the province recently announced its intention to expand ethanol blending to 15 percent by 2025.

Come October, Canadians will return to the polls and face a range of climate policies. Some will think politicians are going too far while others not far enough. But if anything is sure, it’s that political indifference on climate isn’t a viable option for winning elections anymore. And while carbon has become highly political, any environmental policy wins with ethanol, whether you price carbon or not.
 

Author: Andrea Kent
Vice President of Government and Public Relations, Greenfield Global
Board Member, Renewable Industries Canada
1.833.476.3835
andrea.kent@greenfield.com