Canada’s Carbon Emissions Costing Five Times More Than Previously Thought: Environment Minister

Environment and Climate Change Minister Steven Guilbeault rises during question period in the House of Commons on Parliament Hill in Ottawa on June 17, 2022. (The Canadian Press/Patrick Doyle)

Environment Minister Steven Guilbeault says that the cost of Canada’s carbon emissions could be nearly five times higher than previously thought, and that the federal government will use a “new tool” to fight climate change called the “social cost of carbon.”

“The updates to the social cost of carbon simply show that every tonne of greenhouse gas is costing the economy more,” Guilbeault told attendees at the Net-Zero Leadership Summit in Ottawa on April 19.

Guilbeault said the federal government used updated scientific and economic models to evaluate how much climate change costs Canadians.

The social cost of carbon—also referred to as the social cost of greenhouse gas (GHG) emissions, estimates the social cost of carbon as well as methane and nitrous oxide. It’s a measure of the financial impact every tonne of GHG emissions has on things like food production, human health, energy systems, disaster repair bills, and even property values.

While a previous analysis estimated that by 2020, the cost of carbon would be about $54 a tonne, an updated model suggests the figure is actually closer to $247. That number is now at $261 in 2023, and the model predicts that by 2030, the figure will have risen to $294.

“Pause for a moment to understand what this signifies,” Guilbeault said.

“Every tonne of carbon we reduce this year saves society as a whole $261, and we are talking in terms of cutting megatonnes: millions of tonnes.”

In a video he posted on social media outside of the summit meeting that day, he said: “So you can imagine the cost to Canadians. That enables us to put forward measures to fight climate change that are more cost-effective and that are helping Canadians all across this beautiful country in the fight against climate change.”

At the summit, Guilbeault said the updated numbers have been in development for months and are being released following a recent report by the parliamentary budget officer (PBO) on the financial and economic costs of the federal carbon fuel charge on households.

The minister criticized the PBO report for not specifically accounting for the economic and environmental costs of climate change itself.

On Twitter, Saskatchewan Premier Scott Moe asked what Guilbeault meant by the “social cost on carbon,” and questioned whether the “new tool” he referenced was “just a 5X [five times] higher carbon tax.”

Guilbeault responded that the social cost of carbon is not a new term but comes from the U.S. Environmental Protection Agency and the U.S. National Academies of Sciences, Engineering, and Medicine.

“It’s simple: pollution costs us all & we should understand those costs to help us make smart policy choices. The price on pollution & the direct rebates to Canadians remain the same!” he wrote.

Not Know if ‘Using the Right Tools’

Guilbeault’s comments came the day before a report titled “Emission Reductions Through Greenhouse Gas Regulations” was released by the Commissioner of the Environment and Sustainable Development.

It was tabled by the Office of the Auditor General of Canada on April 20 as the fifth report of a series of five reports by the commissioner.

The new report found that “Environment and Climate Change Canada did not know the extent to which selected greenhouse gas regulations contributed to Canada’s overall emission reduction target.”

“This was because the department’s approach to measuring emissions did not attribute emission results to specific regulations,” says the April 20 news release.

“Regulations are an important element of achieving Canada’s emission reduction target,” said DeMarco in the release. “However, without comprehensive impact information, the federal government does not know whether it is using the right tools to sufficiently reduce emissions to meet its target.”

The report also found the department “took too long” to develop the Clean Fuel Regulations, taking over five years rather than the originally planned 2.5 years, which jeopardized the pace of Canada’s emission reductions.

Additionally, the report said the department “did not know whether regulations to limit methane emissions were achieving their objective.”