Reading Toronto's sister site http://www.corporateknightsforum.com ran a story yesterday on the Liberal's carbon-cutting scheme. Here it is in its entirety:

Toby Heaps weighs in:

Stephane Dion’s plan announced today ups the ante from what the Conservatives have on the table about five-fold in terms of impact. By relying on market instruments it will be much cheaper for the government than the current subsidy-intensive path taken by the Conservatives, but, without some lucky breaks, it is still only about a quarter of the scale that would deliver Kyoto.

It’s hard to make a fair comparison, though, until the Conservatives announce their intensity caps and the Liberals announce the building and transport elements of their plan.

Nice to see the carbon budget and deficit analogy, but it is missing the tough love message ‘sacrifice now to dig our way out’ that Paul Martin delivered back in ‘95. That may still be to come on the transport and building parts of their plan.

The Green Investment Account to provide double dividend for GHG reduction action and keeping the money out of general revenues and in the provinces is tailored to the Canadian context and will make the Liberal proposal much more difficult to attack from a number of perspectives.

The potential holes:

• Companies will have a big incentive to overstate their 1990 emissions. With all the mergers et al it will be hard to call them on it.
• There appears to be no domestic limit on offsets, so it is possible that the actual price of carbon will be far lower than $20 or $30 dollars. This will limit the power of the incentive for LFEs to make real on-site reductions.
• The additionality requirement for offsets sounds good in theory, but I am not sure how it works in practice.

Still lots of room for improvement, and I think most Canadians would agree. I am not sure that either of the two main political parties fully appreciate the extent to which the public cares about climate change. In my private conversations with business lobbyists working for heavy emitters who have done their polling, there is a lot of angst as they are finding the public is ready for far more radical proposals than we are seeing right now.

Heavy emitting business may complain, but they should thank their lucky stars if this is the most severe plan they will face.

I guess the bottom line is the Liberal plan puts about half the effective price of $30 on less than half of all industrial emissions. So it’s about a quarter of what needs to be done at the LFE level, but compared to the Conservative plan so far, it looks pretty good.

Dion’s Plan can be downloaded here:
http://www.liberal.ca/pdf/docs/whitepaper_EN.pdf