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A Tale of Two Climate Policies: Canada Rethinks Consumer Carbon Pricing While U.S. Drops Social Cost of Carbon

Carbon pricing has long been a central tool in Canada’s and the United States’ climate strategies. However, recent political shifts are changing how both nations approach this policy. 

In Canada, Liberal leadership contender Chrystia Freeland has pledged to scrap the consumer carbon pricing system in favor of alternatives developed through consultations. In the U.S., President Trump’s administration has removed the social cost of carbon from regulations. This marks a big change from earlier climate policies. 

These shifts highlight the ongoing debate over the role of carbon pricing in addressing climate change.

Canada’s Carbon Tax Crossroads: Freeland Proposes Policy Overhaul

Canada’s carbon pricing system was introduced in 2019 under Prime Minister Justin Trudeau’s Liberal government. The plan set a price on carbon emissions. This encourages businesses and consumers to cut back on fossil fuel use. 

  • The initial price was CAD 20 per ton of carbon dioxide. It increased every year, hitting CAD 80 per ton in 2024. By 2030, it is expected to reach CAD 170 per ton.
Canada carbon price per tonne yearly
Source: RBN Energy LLC website

Provinces could set up their own carbon pricing systems. However, if they didn’t meet federal benchmarks, they faced the federal backstop. Some provinces, like British Columbia and Quebec, embraced carbon pricing early. But others resisted it.

Alberta, Saskatchewan, and Ontario took the federal carbon tax to court. In 2021, the Supreme Court of Canada decided it was constitutional.

Canada carbon pricing system

However, political opposition to consumer-facing carbon pricing has intensified. Critics argue that it increases the cost of living, particularly amid inflation concerns. 

For consumers, the carbon price increase means higher costs for gasoline, heating fuels, and other fossil fuel-based products. For example, gas prices are expected to rise by about 3.3 cents per liter due to the 2024 increase. 

Freeland wants to replace consumer carbon pricing with other options. This change shows the current political situation.

She promised to make sure the biggest polluters keep paying. She will also look into options like carbon credit markets, better building codes, and rewards for cleaner energy.

Her leadership rival, Mark Carney, also wants to get rid of the consumer carbon tax. He says there is a lot of misinformation and division around it. The Liberal Party will select its new leader on March 9, potentially signaling a significant shift in Canada’s climate policy.

U.S. Deregulates Carbon Costs: Trump Eliminates Social Cost Metrics

The U.S. has had a fragmented approach to carbon pricing. Unlike Canada, the U.S. never adopted a nationwide carbon tax. Instead, various state-level initiatives have shaped its carbon pricing landscape.

One of the first carbon pricing systems in North America is the Regional Greenhouse Gas Initiative (RGGI). It started in 2009 and includes 10 northeastern U.S. states. This cap-and-trade system limited power sector emissions and reinvested revenue into clean energy programs. 

California started its cap-and-trade program, also called the emissions trading system (ETS) in 2013. It’s one of the most detailed programs worldwide. Carbon credits under this ETS are distributed in 4 different categories as shown below. 

california carbon credits or allowances distribution per category
California ETS Carbon Credits/Allowance Distribution

The state increased the carbon price under its cap-and-trade program. In early 2024, the price per tonne of carbon in California rose to over $40, up from around $30 in 2023. This increase means that companies in the state must pay more for their emissions, encouraging them to reduce pollution and invest in cleaner technologies.

At the federal level, the concept of a “social cost of carbon” (SCC) was introduced under President Barack Obama. This metric placed a dollar value on the long-term economic damage caused by each ton of carbon dioxide emitted. It was used to justify regulations limiting pollution from industries and vehicles.

During President Trump’s first administration, officials slashed the SCC from around $50 per ton to as low as $7, significantly weakening the economic case for climate regulations. President Biden raised the SCC to $190 per ton. This change supports emissions reductions in federal policy.

However, President Trump’s second administration has completely removed the SCC from U.S. regulations. The “Unleashing American Energy” executive order disbanded the working group responsible for setting the SCC and directed the Environmental Protection Agency (EPA) to eliminate its use in future regulations. This move helps the fossil fuel industry, showing the administration’s plan to reduce climate policies.

Implications of Policy Changes: Navigating the Future of Emission Reductions

Freeland’s plan in Canada and Trump’s policy change in the U.S. signal a key moment for climate strategy in North America. Both decisions could reshape how businesses and consumers engage with carbon reduction efforts.

If Canada removes consumer carbon pricing, it will face strong pressure to find other ways to meet emissions reduction goals. The challenge is keeping polluters accountable without raising costs for households. 

Freeland promised to offer rebates for home energy upgrades. She will also support renewable energy and work on creating a better-connected electricity grid.

Removing the SCC from federal rules in the U.S. could greatly weaken climate action. The SCC has been a key factor in justifying emissions standards for power plants, fuel economy regulations, and clean energy incentives. Without it, policymakers may struggle to enforce meaningful emissions reductions.

Moreover, shifting climate costs from industry to taxpayers could raise financial burdens on American households. This could result in higher insurance costs, more expensive disaster recovery, and rising energy bills.

What Comes Next for Climate Policy in North America?

Canada and the U.S. have historically taken different approaches to carbon pricing. Yet, recent developments show a convergence in political resistance to consumer-facing carbon costs. Freeland wants to get rid of Canada’s consumer carbon pricing. Similarly, Trump plans to eliminate the social cost of carbon. These actions show the changing discussion on how to reduce emissions.

Despite these policy changes, the need for climate action remains urgent. Both countries deal with rising climate costs. These include wildfires, hurricanes, and extreme temperatures, which hurt agriculture and infrastructure. 

As both nations navigate these policy shifts, the challenge will be ensuring that climate action remains effective without placing undue financial burdens on the public. With these changes, the coming months will be crucial in determining the future direction of North America’s climate policies.

The post A Tale of Two Climate Policies: Canada Rethinks Consumer Carbon Pricing While U.S. Drops Social Cost of Carbon appeared first on Carbon Credits.

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McKibben opts for a small-tent climate movement

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A few months ago I went to a climate change forum at the Center for Brooklyn History. The panel I attended, “Confronting Climate Change: Understanding Deniers,” featured the prominent climate activist, Bill McKibben.

Bill McKibben. Courtesy https://billmckibben.com/.

I was curious to hear McKibben’s take on climate change deniers. I don’t regard the true deniers as a big problem – they’re only 11-15% of our country, according to most polls. Rather, I wondered if McKibben would label as “climate deniers” people who agree that climate change is a significant problem but disagree with his framing and his proposed solutions. I have worked for decades on energy and climate matters as an energy lawyer. Now, more than ever, I believe that to address climate change we need to build a big tent.

In the Q&A I tested where McKibben is on this by asking if he would label as a climate denier someone who subscribes to the main tenets of climate change science yet holds that natural gas has a role to play as a bridge fuel. (Our exchange starts at 1:12:45 of the video.)

This could have been a chance for McKibben to make clear that such a view isn’t climate denialism, even if he feels it’s misguided. But he punted, saying “I don’t care whether they’re deniers or not.” For good measure, he threw in his long-standing refrain that swapping coal for natural gas makes climate change worse, despite coal’s far higher carbon content per unit of energy.

674-MW methane-powered generating station, Salem, MA.

As you can hear in the recording, McKibben’s claim that gas is worse than coal draws on the work of Cornell scientist Robert Howarth. Yet McKibben didn’t mention that Howarth’s work is controversial and disputed by many scientists. The crux of the dispute is whether methane’s impact on warming should be measured with a 20-year or 100-year time frame.

Methane is a relatively short-lived greenhouse gas, with a lifetime of around 10 years, versus the 100-year life applicable to carbon dioxide. But each ton of methane is far more potent while in the atmosphere, trapping roughly 100 times as much heat as a ton of CO2. These cross-cutting facts about atmospheric methane — shorter life but greater potency than CO2 — have resulted in two opposing camps: one insisting on a 20-year timeframe for greenhouse gas accounting, the other adhering to the established 100-year frame. This matters because with a 20-year timeframe, generating electricity with natural gas (which, chemically speaking, is essentially all methane) is more damaging to climate than coal-fired electricity.

McKibben blew past this dispute. To hear him at the Center for Brooklyn History, one would have no inkling that there’s an active disagreement over which timeframe to use, that there are staunch climate activists who favor the 100-year time frame, and that the Intergovernmental Panel on Climate Change  (IPCC) generally uses the 100-year timeframe.

McKibben’s latest (2025) book. Published by W.W. Norton & Company.

McKibben also insisted that a discussion about natural gas’s potential role in mitigating climate change as a replacement for coal is irrelevant because solar “is now our cheapest resource.” McKibben’s claim, of course, suffuses “Here Comes the Sun,” his 2025 book that extols solar power as the cheapest solution for all of our energy needs. But this too is questionable, because it’s based on cost comparisons between solar farms and natural gas power plants (or nuclear power plants) that fail to consider that electricity supply and delivery is a complex system of wires and plants rather than individual power plants. Based on his remarks, McKibben is choosing to ignore studies such as the comprehensive 2025 report from the Clean Air Task Force that concluded that plant-level cost comparison “is a good metric to track historical technology cost evolution [but] is not an appropriate tool to use in the context of long-term planning and policymaking for deep decarbonization.” And the task force is not alone in finding that when electricity is treated as a system, solar loses its place as the cheapest low-carbon resource.

The dogmatism McKibben displayed at the Brooklyn meeting was unfortunate. We’re in a time when efforts to combat climate change are in retreat. A unified front is required to turn the tide. Instead of doubling down on absolutist positions, activists like McKibben who seem convinced that the solution to climate change is all-renewables, end of discussion, should be seeking common ground with others who want climate action but believe that nuclear power and natural gas must also play a role.

NYC Climate March, Sept 17, 2023. Photo: C. Komanoff.

Climate change activists need to build a bigger tent, rather than call anyone who disagrees with their positions a climate change denier. It is striking that McKibben stuck to his guns after saying in the same talk that the most important goal for everyone right now is to help climate change realists win more House and Senate seats in this year’s midterms. As some have noted, an absolutist position on natural gas appears less likely to achieve that win and politicians are following that advice.

Will McKibben evolve? He has demonstrated that he knows how to build a national climate movement centered around issues like divestment. Given the current political situation, he should focus on building an even bigger tent by welcoming all of the 85% who believe that we need to address climate change but do not agree with his ideological positions.

Rich Miller is an energy lawyer who has worked for a variety of stakeholders and now gives walking tours in lower Manhattan on the history of electricity. 

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Rebranding ‘Balcony Solar’ as ‘Guerrilla Solar’ won’t lift its climate value.

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Image generated with Claude. Why have we juxtaposed a bicycle with balcony solar? Read on.

First it was Plug-In Solar. Then it was Balcony Solar. Now it’s Guerrilla Solar, at least according to Inside Climate News, which yesterday proclaimed that The ‘Guerrilla Solar’ Era Has Arrived.

“It,” of course, is Modular solar panels. They’re the hot new photovoltaic solution: cheap enough to buy at Home Depot, easy to hang or prop to catch maximum rays, and small enough to fit on a balcony (if you’ve got one) and plug into your “home grid.” But, alas, too meager a generator of electricity to be more than a bit player in decarbonizing most U.S. homes.

How do I know? I’ve done the math.

A standard, lower-end 220-watt balcony solar array will produce 337 kilowatt-hours a year, or 28 kWh a month averaged over the course of a year. That’s for a 220W unit measuring 3.5 feet by 3.5 feet. (220W x 1/1000 x 17.5% x 8760 hours per year = 337 kWh. Calculation assumes a 17.5% full-year capacity factor, which is arguably generous for New York, where I live. )

Our balcony solar mashup. Top: an install in Germany. Bottom: Home Depot advert.

A typical U.S. home consumes 10,500 kWh a year, or 28 to 29 kWh per day, says Solartech, drawing on U.S. Energy Information Administration data. That puts a home’s daily power needs on par with a balcony solar unit’s monthly output. In effect, once each month the balcony array gifts a homeowner or renter a bit more than day’s full complement of electricity. And earth’s atmosphere gets the same respite: a 3 percent reduction in carbon emissions caused by the home’s electricity usage.

(The 3 percent figure could also be calculated directly by dividing 337 kWh per year of solar production by 10,500 kWh per year to run the home. For bigger or smaller arrays, just prorate your assumed wattage by my 220W; for 440W, say, double my figures.)

Balcony Solar metrics

Why write about balcony solar if it’s so inconsequential? CTC’s mission includes puncturing would-be climate balloons before they ascend too far. In the same vein, we practice quantification to make clear what does and doesn’t move the climate needle. (More on that further below.)

The best way to depict balcony solar’s climate value is to express it in terms of tangible metrics. We’ve selected two. Both assume the basic, lower-end PV array I assumed at the top: a 3.5 foot-square array whose peak output is 220 watts.

1. It would take 50 million 220W balcony solar units (bsu’s) to restore the climate benefit we destroyed in 2020-2021 when we shut the high-performing Indian Point nuclear power plant 32 miles from Midtown Manhattan.

2. A single person cutting back their driving by a mile a day would provide the same climate benefit over the course of a year as a single 220W bsu.

(Calculations in sidebar. Now you know why we led with images of an urban dweller as cyclist and balcony solar user.)

Yes, it’s dense — as befits a sidebar. The numbers tell a story. Follow the color co-ordination.

Ponder that: It would take fifty million smallish bsu’s to level up to the fossil fuel carbon emissions that Indian Point was keeping at bay by supplying the New York City area year in and year out with abundant carbon-free power. Deploying that many balcony solar units would entail 10 bsu’s for each of the 5 million households in the MTA’s service territory. (The Metropolitan Transportation Authority provides subway, bus and commuter rail transit in the five boroughs and seven suburban counties.) Or, if those same households upgraded to 1100-watt bsu’s, collectively they would still make up only half of the lost Indian Point power.

The second comparison, involving driving, is perhaps trickier to grasp but more interesting, since it relates to people’s behavior. Living differently isn’t part of public discourse, at least not in the USA, and especially when what’s being served up is using less. But “reducing,” as we might call it (remember “Reduce, Reuse, Recycle”? or, “Insulate, then Insolate”?) is just as potent for cutting emissions as switching to renewables — even more so when the reducing means driving less, considering the multitude of benefits that accrue from diminishing cars’ imprints on our communities. Still, staying on topic: driving just one fewer mile per day brings about the same shrinkage in carbon emissions as deploying one 220W solar array.

What Balcony Solar boosters are really saying

To be fair, our friends at Inside Climate News and, yes, The New York Times appear to be trying to modulate their balcony solar enthusiasm.

ICN‘s Dan Gearino, whom we cited up front, said he looked to Germany, the birthplace of balcony solar, to see if the units made sense for U.S. households. His takeaway: “It may make more sense financially to spend the cost of plug-in solar on insulation, air sealing or other basic measures to reduce energy use.” Hooray: insulate before you insolate.

Gearino helpfully interviewed renewables guru (and U.S. emigré) Craig Morris, who currently heads Germany’s plug-in solar trade association, Bundesverband Steckersolar. To Morris, balcony solar’s main advantages are that it provides power without taking up land, and that it affords people a way to “become participants in the transition to clean energy.” Behold, guerrilla solar. That, in turn, bolsters “the political consensus that supports the transition.” But Morris also made clear that widespread adoption of plug-in solar would only meet “about 2 percent of Germany’s electricity demand.”

Morris’s “about 2 percent” feels right for Germany. But not for the U.S., where widespread adoption of virtually any individual carbon alternative seems forever out of reach, and where the energy pie is so much larger — think giant fridges, freezers for beer, steroidal homes bursting with piles of powered toys, not to mention industrial and institutional electricity use that Morris correctly excluded from his figure.

Don’t forget to micro-dose. NYT headline + image for David Wallace-Wells’ guest essay (see text). Image by Rui Pu.

Both Gearino and Morris seem more measured than climate journalist Robinson Meyer, founding editor of Heatmap and frequent contributor to The Times, where he wrote about balcony solar in mid-June.

“New zero-carbon power kits will allow Americans to make their own energy choices,” declares the callout to the print version of Meyer’s NYT guest essay, The Tiny Solar Panel That Could Change America. (The even more expansive print headline invites us to “Forget Roofs. Backyard Solar Is the Next Frontier.”)

Wallace-Wells is of two minds. He calls balcony solar “a small way that apartment- and condo-dwelling Americans can take ownership of their energy choices and cut down their pollution on the margins.” No quarrel there, thanks to his qualifiers “small” and “on the margins.” Earlier, though, he opines that balcony solar units “have the potential to change how Americans understand and consume energy,” But read further and you’ll again see Wallace-Wells cautioning that “Balcony solar will play one small role in [the] drama” of transiting to the new world of clean, abundant energy.

Any such caveats are welcome these days, amid widespread solar hoopla. Still, it doesn’t seem to be in Wallace-Wells’ toolkit — or that of Inside Climate News and other mainstream climate journalists — to tutor their audiences as to the  true limits of balcony solar and other panaceas. Just like it wasn’t in their field of vision a decade ago to lay out the true stakes of shutting Indian Point as Riverkeeper was singing its siren song.

What’s Next for NY Balcony Solar

Meantime, as Canary Media reported recently (and helpfully), New Yorkers concerned with climate and affordability are waiting for NY Gov. Kathy Hochul to sign the recently passed SUNNY (Solar Up Now New York) Act legalizing balcony and other plug-in solar. It would be head-spinning (and politically suicidal) if she didn’t, given near-universal support ranging from Con Edison to DSA Assembly Member Emily Gallagher, who told Canary Media, “This is the most popular bill I’ve [ever] worked on.”

My guess is that Hochul is waiting for the right moment, and perhaps the right “package,” that can advance and not undercut her push to launch five large new nuclear power plants around the state — one to be built by the public New York Power Authority, the others to be constructed and operated privately. A little bit of math, a la what we offered here a la Indian Point, might help her out.

The governor also must manage the veritable hot potato of her deferred implementation of the landmark 2019 Community Leadership and Climate Protection Act. She might do well to consider jettisoning the act’s unwieldy cap-and-invest centerpiece in favor of a straight-up carbon tax (with the revenues distributed pro rata to the state’s households) in its place. That, far more than balcony (or guerrilla) solar, could blow open the door to the “innovations and technologies we cannot yet imagine” that Wallace-Wells fantasized about in his Times essay.

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The new SBTi Corporate Net-Zero Standard: what it means for business

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On 11 June 2026, the Science Based Targets initiative (SBTi) published the most substantial revision of its flagship corporate framework since its introduction. The SBTi Corporate Net-Zero Standard Version 2.0 takes effect on 1 February 2027 and reshapes the way companies approach their net-zero targets.

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