Supporting greener vehicles: Canada’s best climate play

There is a common misperception in much of Canada that our greenhouse gas (GHG) emissions are negligible – at least in absolute terms – and consequently that taking meaningful action to reduce emissions is both costly and foolish. As pointed out by Brendan Frank at the Ecofiscal Commission, however, at 1.6 per cent of global emissions, Canada is actually among the top ten global emitters in absolute terms and has the additional dubious distinction of being the highest per-capita emitter. In other words, “we make an outsized contribution to the problem.”

Fortunately, and as further set out below, Canada’s ongoing review of its Passenger Automobile and Light Truck Greenhouse Gas Emissions Regulations presents an opportunity to make an outsized contribution to the solution – and one that is unencumbered by the constitutional uncertainty associated with carbon pricing or opposing interprovincial pipelines.

For my purposes here, the story begins in December of 2016. The Alliance of Automobile Manufacturers and the Association of Global Automakers sent a letter to Scott Pruitt, then-newly appointed head of the United States’ Environmental Protection Agency (EPA), requesting that he reconsider what it described as the “strict” fuel efficiency standards for cars and light trucks established by the previous Obama administration. This reconsideration was formally launched in the spring of 2018, and it immediately became clear that the Trump administration had a fight on its hands.

As noted by Annie Bérubé and Isabelle Turcotte, California and 15 other states, as well as Washington, D.C., have the right to set their own emissions standards pursuant to a waiver issued under section 177 of the U.S.’ Clean Air Act – and these jurisdictions all affirmed their intention to retain the current Obama standards. They also sued the Trump administration for even trying to relax those standards. Collectively, those states and territories account for approximately 48 per cent of U.S. auto sales. That compelled the Trump administration, with urging from the automobile sector, to try to negotiate a compromise, although those talks appear to have stalled last month.

Back in Canada, in August 2018 the federal government released a discussion paper to launch its own mid-term evaluation of Canada’s car and light truck standards (the regulations referred to above), which were finalized in 2010 and are currently aligned with those of the Obama administration. Among the questions posed by Environment and Climate Change Canada (ECCC) was the extent to which EPA’s current reconsideration should affect Canada’s own midterm evaluation, bearing in mind “the integrated nature of vehicle manufacturing and trade in the North American market?”

Last week, ECCC published a summary of the comments that it received in response to its discussion paper. The automotive industry generally urged Canada to adopt a wait and see approach: “All but one regulated company advocated for the department to avoid making any determination on Canada’s mid-term evaluation until the conclusion of the on-going U.S. rulemaking process.” The thinking is that if EPA finalizes a lower standard, then Canada is too small a market to insist on more stringent standards. This, however, is premised on the critical assumption that California and its allies will be brought to heel.

The vast majority of public submissions, on the other hand, supported maintaining or increasing the stringency of Canada’s standards, a result that is consistent with recent polling commissioned by Clean Energy Canada showing that 64 per cent of Canadians would “prefer to see electric vehicles overtake gasoline-powered vehicles in the future.”

In my view, all of this places Canada in a relatively unique position to tip the scales in the fight over vehicle emissions standards for all of North America. At just over 2 million vehicle sales in 2017, Canada’s automobile market is roughly the same size as California’s. If Canada were to align itself with the Golden State and its allies now, it might just be enough to force automakers and the current EPA to abandon their proposed rollback and the uncertainty that would inevitably accompany it for the foreseeable future.

The stakes are significant. With respect to Canada alone, ECCC estimates that under the current standards annual GHG emissions in 2030 are expected to be about 7 million tonnes (7 Mt) lower. But the potential impact of maintaining these standards really becomes outsized when one considers the effect on the U.S. According to several analyses, under EPA’s proposed weaker standard, “America’s cars and trucks would emit an extra 321 million [321 Mt] to 931 million metric tons [931 Mt] of carbon dioxide into the atmosphere between now and 2035,” and possibly as high as 1.25 billion metric tons (1.25 billion Mt).

To put this into perspective, Alberta’s oil sands currently emit roughly 70 million metric tonnes (70 Mt) per year, with a proposed annual emissions cap under Alberta’s Climate Leadership Plan of 100 million metric tonnes (100 Mt). The difference between the current and proposed vehicle standards, therefore, could be equivalent to a decade of emissions from the oil sands.

With the release of Budget 2019, the federal government has already demonstrated some willingness to support greener vehicles. Canadians concerned about climate change, and perhaps those in British Columbia and Quebec in particular, should take note and make their views known.