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Les Leyne: Clark gets way out of cap-and-trade plan

The professor who supplied a lot of the intellectual horsepower behind the Liberals' war on climate change changed gears this week. Simon Fraser University carbonpricing expert Mark Jaccard is now advocating that B.C.

The professor who supplied a lot of the intellectual horsepower behind the Liberals' war on climate change changed gears this week.

Simon Fraser University carbonpricing expert Mark Jaccard is now advocating that B.C. hold off on joining California's cap-and-trade program next year.

Jaccard and colleague Hadi Dowlatabadi outlined their reasons in a 91原创 Sun op-ed piece. It could be the excuse the Liberals need to take the time out that B.C. businesses are seeking.

The B.C. Business Council filed a brief with the government last winter claiming the cap-and-trade plan would damage the economy.

The commitment to join was made as part of former premier Gordon Campbell's determined attack on climate change. His carbon tax was always the headliner, but the cap-andtrade program - which would set limits on industrial emissions and provide a mechanism for companies to buy, sell and trade allowances under or over that limit - was a close second.

The B.C. Business Council plea to hold off came in the middle of the Liberal leadership race, when big policy decisions were put on hold.

Since then, Premier Christy Clark has made as many policy changes as she can. But there hasn't been a definitive announcement on the cap-andtrade program, which is now just six months from taking effect under the original plan.

Environment Minister Terry Lake has made some vague references to staying the course and carrying on with the idea of joining the California market.

Jaccard now recommends against that. He views the B.C. government from the outside now, as he is more focused on U.S. energy issues.

But he still carries a lot of clout. He chaired the B.C. Utilities Commission in the 1990s and has vivid memories of B.C. Hydro's involvement in the California electricity market. The state launched a disastrous pricing experiment that turned into a fiasco that's still tied up in the courts. His point is that new markets have "teething troubles" and B.C. should wait two years to see if the cap-andtrade market works.

Jaccard says the carbon tax already puts a price on emissions.

He argues the carbon tax moves taxes away from families and on to consumers of fossil fuel. A cap-andtrade market would move tax revenue away from B.C. and make for budget challenges.

"It makes little sense to absorb the extra costs of cap-and-trade today, in order to tag on to the California initiative, when we already have a more cost-effective mechanism in place," Jaccard wrote.

Of the 25 states and provinces that signed up with the Western Climate Initiative, B.C. is one of the few still nominally committed to the original cap-and-trade deadline.

Even California may have trouble meeting the date. The ever-litigious Americans have a few court challenges ahead of them before the new market is a go.

When Clark's cabinet gets around to making the call, it will look at Jaccard's ideas and the business council request for a "pause and reset."

But it will also look at the benefits of signing up early (you get to write the rules). And there is huge potential for jobs once the market for carbon offsets is set. Replanting the entire beetle-killed forest would become a net benefit, rather than a cost.

Behind the questions about cap and trade is a bigger question about the target that program was designed to meet.

B.C. is obligated by law to cut greenhouse gas emissions by onethird by 2020. The business group warned the government it can't do that without dramatic reductions in production and employment in several big export industries.

Clark has made it clear she wants as many jobs as can be wrung out of those industries. And she's already slapped a tax hike on them as part of the harmonized sales tax rescue mission.

Signing up for cap and trade would penalize some sectors, but possibly create another.

It's a matter of doing the right thing for posterity - once they figure out what that is.

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