The $369 billion deal, unveiled Wednesday, came as a surprise after earlier versions of President Joe Biden’s proposal failed to win the approval of jailed Democratic Sen. Joe Manchin of West Virginia. Manchin now says he may support a scaled-down version of the plan — which, if passed, would still be by far the most ambitious set of programs to tackle climate change in US history. The package includes huge investments to help create new sources of clean energy, increase production and sales of electric vehicles and compensate low-income communities that bear the brunt of the effects of a warming planet. “The forecast for Canada is rising,” said Lisa Gue, national policy officer for the David Suzuki Foundation. “I hope this will inspire the Canadian government to review our climate policies and perhaps look for opportunities to increase investment.”
How Canada could rely on a “timid” approach
Both the U.S. and Canada seek to cut greenhouse gas emissions 40 percent below 2005 levels by 2030. But the two nations are taking different paths toward that goal. The cornerstone of Ottawa’s approach is a federal carbon pricing system that would rise sharply from the current level of $50 per tonne of emissions to $170 by 2030 in order to nudge consumers toward cleaner energy sources. In the US – where a federal carbon tax has never been seen as viable, for political reasons – the Biden administration is instead trying to clean up emissions by spending its way through massive investments in green technologies. The administration’s plan includes new tax credits for zero-emission power plants and for companies that produce green technology such as solar panels, wind turbines and batteries. That’s an aggressive tactic that should play a bigger role in Ottawa’s strategy, said Eddie Perez, director of international climate and diplomacy at Climate Action Network Canada. “When it comes to major investments to decongest coal, we have a very timid approach,” Pérez said. Democratic U.S. Sens. Chuck Schumer, left, and Joe Manchin announced Wednesday their plans to pass a $369 billion tax and climate deal. (J. Scott Applewhite/The Associated Press) By boosting direct investment in emissions-reducing technologies, Pérez said, the U.S. government could present the fight against climate change as a “public service” — which could also create an expectation of public accountability as initiatives roll out. “Here what the United States is saying is … Congress and the public, we have a role to play in unlocking the full range of climate investments that will get us to the 40 percent goal,” he said. Climate-related investments in the proposed U.S. plan are about three times higher per capita than climate investments in Canada’s 2022 federal budget, Gee said.
EV rebates, help for marginalized communities
The US approach also offers new tax credits earmarked for the adoption of electric vehicles manufactured in North America. US customers earning under $150,000 per year will be eligible for $7,500 per new vehicle. In Canada, customers can receive up to $5,000 in purchase incentives toward the purchase of a new electric vehicle. Washington’s plan also provides tax incentives for a wide range of vehicle prices. Electric passenger cars priced under $55,000 and trucks, SUVs and vans priced up to $80,000 will qualify. In Canada, passenger vehicles are subject to the same $55,000 limit, but larger vehicles must have a base model price of less than $60,000 to qualify. However, the US incentive only applies to vehicles produced in North America, while the Canadian program does not take into account where a vehicle is manufactured. US customers will have access to more generous rebates for electric vehicles than Canadians if the Biden administration’s plan is approved. (Gavin Simms/CBC) Ottawa should view the more generous U.S. incentives as the start of a healthy competition to see which country can get more electric vehicles on North American roads, experts said. “I think it’s a race to the top, not a race to the bottom,” Guo said. The US climate deal also includes about $60 billion for environmental justice programs intended to support low-income communities and communities of color. The researchers said these communities are disproportionately affected by climate change for a number of reasons, including pollution near ports (which tend to be closer to these communities) and lack of access to safe housing and food. “That was a blind spot for Canada and something that we can certainly look to the U.S. and build on,” Guo said.
The US action is a “welcome development”, says the minister
In a statement issued to CBC News, Environment Minister Steven Guilbeault welcomed news of the U.S. deal but did not outline any additional measures Ottawa would consider if the plan is finalized. “The news of the… historic US climate and energy bill is a very welcome development for Canada,” Guilbeau said in the statement. “This agreement shows that when Canada and the United States work together, both our climate and our economies can only benefit,” said Environment Minister Steven Guilbeault. (Adrian Wyld/The Canadian Press) “It reinforces our government’s approach to the transition to cleaner forms of energy, which is already creating new economic opportunities.” Critics say neither Canada nor the US should be satisfied with their current approaches, and argue that both nations’ climate plans are too lenient with polluting fossil fuel industries. The Intergovernmental Panel on Climate Change also called on nations to “at least halve emissions by 2030“To avoid the catastrophic consequences of a warming climate – a goal that goes beyond official plans in Ottawa and Washington. “On both sides, the United States and Canada, this is the minimum,” Pérez said.
