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Should Canada be purist or practical when it comes to climate change?

Over the next few weeks, there will be some key indications about which path the federal Liberals will choose, and the smart money is on the practical despite pressure from some environmentalists.

Of course, the energy security problems raised by the Russian invasion of Ukraine and attempts to embargo Russian energy heavily favour the practical approach.

The world is looking to Canadian oil and gas producers to increase their production right now in the hopes of offsetting some of the strain of high prices and cutting off Russian supplies, even if it means emissions wont go down as much as hoped.

But theres more to the practical approach than geopolitics.

In a paper to be published this week after two years of looking for a consensus among industry, government, environmentalists and Indigenous communities, the Public Policy Forum argues that a purist approach would just hurt too much.

Two overarching visions of the energy transition are competing for the hearts and minds of Canadians, say lead authors Ed Greenspon, who heads the PPF, and Wayne Wouters, the former clerk of the Privy Council and now a strategic policy adviser at McCarthy Tetrault LLP.

The purist approach an accelerated phaseout of oil and gas, replacing it quickly with renewables and clean electricity risks disrupting the way we live, our jobs and our international relations, they say.

On the other hand, a practical approach an aggressive decarbonization that promotes renewables and clean energy while cutting emissions from oil and gas would be more conducive to a smooth transition for workers and investors, and open the door to a boom in private-sector activity supported by public-sector measures.

But in order to make it work, says Wouters, we have to be all in large emitters, policy-makers, taxpayers, consumers, investors and Indigenous communities. And we have to be organized, setting out strategies that will carry us through the next decades despite election cycles and the Conservative leadership race that is throwing climate policy into question, he added in an interview.

The paper goes on to outline the many steps that need to be taken in order to wrestle our emissions to the ground, from mass electrification to mass marketing in order to sell consumers and the world on the benefits. A transparent price on carbon is only the beginning.

The ideas are frequent refrains in the speeches we hear from government and business leaders. To make them real, though, the decisions in the next few weeks are central.

By law, the government needs to produce the first instalment of its plan to meet Canadas 2030 emissions targets by the end of March. And in the first half of April, Finance Minister Chrystia Freeland will table the federal budget, which will include substantive new measures to fight climate change.

The telling move will come in what those documents say about carbon capture and storage (CCS). By capturing the carbon dioxide that comes from producing things like oil, gas, cement or steel, and then storing it underground, the technology could allow the continued use of fossil fuels with a much lower emissions profile.

Last years budget promised to create an investment tax credit to encourage companies to build CCS facilities, and this years budget is widely expected to set out the parameters of that measure.

The thing is, purists dont like CCS. A group of 400 academics wrote recently to Freeland saying tax credits are akin to subsidies for oil and gas, breaking our international commitments and prolonging our dependence on fossil fuels.

The federal government looks like it will go ahead with the measure anyway. It has consulted widely and is clearly in the midst of crafting policy. On Monday, Environment Minister Steven Guilbeault and Natural Resources Minister Jonathan Wilkinson co-wrote an opinion column for the National Observer, touting the benefits of carbon capture and storage.

But whether the government decides to go big or go small will be a clear indication of whether it is bending towards the practical or the purist route to climate change.

Alberta wants the tax credit to cover up to 75 per cent of eligible investments, but the current system of tax credits for research and development applies to just 35 per cent. The new credit will probably fall somewhere in between, in true Canadian style not quite going all in, but signalling support for ongoing long-term oil and gas production all the same.

That would make sense in todays environment.

Oil prices are sky high, and so are profits. With Canadas carbon price set to climb steeply and capital markets around the world rewarding companies that transition to low carbon, there are already incentives in place to push companies towards cutting emissions. A tax credit will help too, but it doesnt need to carry the entire burden.

Regardless, its only a start on the many things business and government will have to do together if they want a practical approach to climate change to succeed. Electrification alone will cost many, many billions in private and public money, and the plan to find that money is scattered and nebulous.

A signal on carbon capture and storage is one thing, and a full-blown vision to steer the economy, the public, and politics towards a net-zero world is another.

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When it comes to emissions, Liberals will choose the practical not the purist route - Toronto Star