Tuesday, January 7, 2025

Trudeau's climate legacy

The highs, lows and what's next |
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Prime Minister Justin Trudeau resigned on Monday after more than nine years leading Canada. Today's newsletter looks at the climate legacy he leaves behind. For unlimited access to climate and energy news, please subscribe  

Trudeau bids adieu

By Danielle Bochove

For the past nine years, Canada's climate agenda has been shaped by its prime minister, Justin Trudeau. His decision to resign amid sagging approval numbers and a rebellion in his own political party raises big questions about the fate of some of those policies and what comes next.

Trudeau, 53, has said he'll keep working until the governing Liberal Party chooses a new leader, with parliament suspended until March 24th to allow that process to unfold. A national election must take place by October, but will likely be triggered much sooner, given that the three main opposition parties have said they'll back a no-confidence motion. 

Canada's 23rd prime minister came to power in 2015 vowing to tackle climate change only to slam headlong into the competing reality of an economy that still relies heavily on extractive industries.

Justin Trudeau after being elected Canada's prime minister in October 2015. Photographer: Kevin Van Paassen/Bloomberg

His flagship policy, carbon pricing, was applauded by climate activists but proved deeply polarizing. While the Supreme Court of Canada upheld the policy in 2021, it remained a thorn in the side of several provinces, notably oil-rich Alberta. Conservative leader Pierre Poilievre — who grew up in Calgary, Alberta — has vowed to dismantle it if he's elected. The policy aims to hike the baseline price for carbon to C$170 ($118) per metric ton by 2030, providing a rising disincentive for emitters.

Trudeau's government also offered various incentives to produce clean energy, including investment tax credits. These were also made available for carbon capture and storage, a bone thrown to the oil and gas sector.

But executing these policies has come in fits and starts, and Canada's greenhouse gas emissions are falling far slower than needed to achieve the country's 2030 target of a 45% to 50% drop from 2005 levels. A preliminary report released in December, covering sectors representing most of the economy, showed emissions fell 8.5% between 2005 and 2023, progress that leaves a lot of distance uncovered. 

The country's geography works against it. Goods need to be transported vast distances, temperatures are extreme and the comparatively small population has a disproportionately big carbon footprint. Canada produced 19.4 metric tons of CO2 equivalent per capita in 2023, more than the US, Russia or China. Factor in the emissions generated outside Canada, when the fuel imported from its oil sands is burned by more populous countries, and its impact on the planet gets even worse. 

On the other hand, the country's abundant forests absorb carbon — at least when they're not on fire. The 2023 Canada wildfires that burned an area larger than England released 640 million metric tons of carbon along the way, according to a study by NASA. Similarly, Canada's vast Arctic also acts as a shield against climate change, though that too is being undermined as reflective ice melts, thawing permafrost releases sequestered CO2 and northern wildfires become more prevalent.

A resident sprays water on hot spots near a house during a wildfire in Celista, British Columbia, Canada in August 2023.  Photographer: Cole Burston/Bloomberg

For Trudeau, though, the ultimate climate challenge came from managing the deep divide between the economic interests of provinces rich in clean natural resources — especially hydroelectric power — and those dependent on fossil fuels. It also goes some way to explaining Trudeau's decision in 2018 to purchase, and ultimately bring into service, a stalled oil sands pipeline.

His more recent attempt to pivot the economy away from fossil fuels with generous subsidies for EV batteries was an effort to compete with US incentives in President Joe Biden's Inflation Reduction Act. The two leaders worked to deepen cooperation around climate, a bilateral collaboration that was almost certainly doomed to end with the inauguration of President-elect Donald Trump later this month. It's unclear what effect future Trump policies — including potential tariffs — may have on Canada's fossil fuel and clean energy sectors.

Potential successors in Trudeau's Liberal Party who may have to deal with Trump, at least until the next election, include Dominic LeBlanc, who became finance minister after Chrystia Freeland's stunning resignation in December; Foreign Affairs Minister Melanie Joly; and Mark Carney, the former governor of the Bank of Canada and the Bank of England. Carney, chair of Brookfield Asset Management, is also chair of Bloomberg Inc. (Carney said in a statement on Monday that he is considering entering the race to replace Trudeau.)

Under Trudeau's watch, Canada legislated a net-zero-emissions economy by 2050. The future leader of the Liberal Party will need to weigh that against pressing domestic demands for as long as he, or she, remains in power.

Messy challenge

22 million
 This is how many metric tons of emissions Canada's oil sands industry wants to slash by 2030. The goal will not be possible without developing expensive carbon capture and storage projects.

Canada's burning issue

"We're watching things burn that, by every textbook and every TED talk and published paper, suggest that they should not burn — and yet they are."
Katie Ellsworth
Fire management officer at Parks Canada 
Climate change is altering the way fires behave in Canada and other parts of the world. The blazes are also adding to the problem of global warming. The greenhouse gases released from Canada's 2023 wildfires far outweighed emissions from its oil and gas, transport and agriculture sectors combined.

Thirty-nine minutes with Justin Trudeau 

Back in October 2022 Bloomberg Green's Akshat Rathi interviewed Canadian Prime Minister Justin Trudeau on stage at the National Arts Centre in Ottawa. In a wide-ranging conversation, the prime minister was asked why Canada was making slower progress than other G-7 countries at reducing carbon-dioxide emissions over the past three decades.

Defending his climate record in office, Trudeau said his government's policy to put a price on pollution, which went into effect in 2019, would take awhile to show up on emissions. "I can say that we are now on a track to reach a 40 to 45% reduction by 2030," he said in 2022. "And we're going to be hitting that net zero by 2050."

Listen back to the full episode of the Zero podcast or read the full transcript here

Justin Trudeau speaks with Akshat Rathi during the Ottawa Climate Conference on Oct. 18, 2022.  Photographer: David Kawai/Bloomberg

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