» Mark Carney treads a fine line on climate in a tight election

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(Bloomberg) — Last month, in his first speech as Canada’s prime minister, Mark Carney vowed to make the nation “a superpower in both conventional and clean energy.”

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The “conventional” reference could be seen as matter of course in a nation whose energy sector is still dominated by oil and gas.

But it also shows the fine line that Carney, the Liberal Party leader, needs to tread as he squares off against Conservative Pierre Poilievre ahead of Canada’s general election on April 28, while simultaneously fighting a brutal trade war initiated by US President Donald Trump.

“I think the political incentives for him align for that kind of compromise,” said Jessica Green, a political scientist at the University of Toronto.

Voters are focused on issues that seem more immediate and frightening than climate change, she said, from a fraying social safety net, to economic fears, to the rise of authoritarianism. Meanwhile, opposition leader Poilievre has blamed climate policies — especially the consumer carbon tax implemented by former Prime Minister Justin Trudeau — for rising household costs. In an election campaign that has frequently seen the parties in a dead heat, “it makes sense not to talk about climate,” Green said.

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A spokesperson for the Carney campaign said he had not chosen “to downplay or dial down climate.”

“Climate change is very important to many Canadians, but we would also be remiss if we didn’t talk about other things Canadians care about, such as affordability, our relationship with the United States, security and so on,” she said.

The populist vs. the ‘globalist’

The contrast between the two candidates is marked, a fact each has sought to underscore.

Carney is a prominent climate champion on the international stage. His long list of green credentials includes five years as the United Nations Special Envoy on Climate Action and Finance and co-chairing the Glasgow Financial Alliance for Net Zero. His platform proposes measures such as bolstering carbon markets, developing a carbon border adjustment mechanism and speeding up approvals of clean energy projects.

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Still, one of Carney’s first acts after taking over from Trudeau was to scrap the unpopular consumer carbon tax, which taxed fuels, including gasoline at the pump, based on emissions and then redistributed the income to provinces and territories. For most Canadians, that money was then mailed out in the form of rebate checks. In canceling it, Carney said the poorly understood policy had become “too divisive.” It was a tacit acknowledgement of the efficacy of Poilievre’s relentless “Axe the Tax” campaign, part of a broader platform focused on jobs and cost-of-living issues.

A populist from oil-rich Alberta who has spent his entire adult life in politics, Poilievre has attacked Carney as being among the “globalist elites.” He’s promised to reinvigorate Canada’s oil and gas sector, and his plans to reduce greenhouse gases are vague. Poilievre has said he favors incentives to reward companies for cleaner technology and manufacturing, but hasn’t committed to upholding any of Canada’s emissions targets.

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He also believes selling more of Canada’s resources abroad would be good for energy independence and ultimately good for the climate, a spokesperson for his campaign said, citing his remarks at a recent press conference. “We should be selling our resources to the world,” Poilievre said. “Canadian oil and clean natural gas should be displacing coal and reducing emissions worldwide by allowing India and other Asian countries to use our gas instead of dirty coal.”

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Canada’s lagging progress

Canada is one of the world’s highest emitters per capita and currently lags far behind its own carbon-cutting goals. It has targeted cuts of at least 40% to 45% from 2005 levels by 2030, but the latest national emissions inventory report shows a drop of just 8.5% through 2023. Meanwhile, fossil-fuel emissions rose, “consistent with a 242% rise in crude bitumen and synthetic crude oil production from Canada’s oil sands operations,” the report notes.

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Those numbers are somewhat skewed by heavy oil and gas investment in the early 2000s, which has largely evaporated over the last decade. Still, they illustrate the challenge Canada faces if it is to bend its emissions curve enough to get to net zero by 2050 — a legally required milestone — much less achieve its interim targets.

Carney’s climate proposals fall broadly into three areas: fostering a comparative advantage for clean industry; incentivizing investment in green buildings, electrified transport and consumer efforts to decarbonize; and sustainable finance measures.

“Nothing that he has said is really inconsistent with achieving net zero, or growing a clean economy. It’s not that he’s going to do the opposite of that,” said Chris Severson-Baker, executive director of the Pembina Institute, which advocates for Canadian policies to transition to clean energy. “But it is a bit light on details.”

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Carney is not the first North American politician who’s had to reconcile a deep green CV with broader appeals to voters. Claudia Sheinbaum, who holds a doctorate in energy engineering and has contributed to reports for the UN Intergovernmental Panel on Climate Change, became Mexico’s president last year. On the campaign trail, she proposed expanding renewable energy but also gas power plants, and pledged to strengthen the state-owned oil company, Pemex.

Meanwhile, US tariffs and Trump’s threats to annex Canada have transformed the dynamics of the race. A separate Carney plan ties protections for Canada’s water, nature and biodiversity to national security concerns. It was released April 7, the same day that Poilievre talked about selling more oil and gas to India and said he would fast-track 10 oil and gas projects, including a Suncor Energy Inc. oil-sands mine extension.

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Poilievre has promised a number of additional measures that threaten emissions progress, including revoking Canada’s oil and gas emissions cap and scrapping the industrial carbon tax. The latter is a step that large energy companies called for, saying the tax was not globally cost competitive and that carbon regulations were better handled at the provincial level.

But the industrial carbon tax reduces emissions at least three times as much as the consumer tax did, according to the Canadian Climate Institute, and would do more than any other policy in place to cut emissions between now and 2030.

The implied carrot offered by Poilievre is a return to the days when Canadian oil workers benefited with every spike in prices. That’s unlikely to materialize, Severson-Baker says, given that the focus of oil companies is increasingly on automation and wringing the last profits out of existing projects, rather than new investment.

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Canadian oil prices are largely set by the price of West Texas Intermediate crude. That benchmark has dropped more than 30% over the past year, including roughly 17% since Trump outlined his tariff plans about a week ago, further damaging the case for any major new oil-sands investments.

Canceling the industrial carbon tax risks derailing multi-year corporate plans designed to help companies compete in a decarbonizing world, Severson-Baker says. Poilievre’s pledge alone “creates uncertainty for investment in Canada, when we’re already overwhelmed with uncertainty from conflict with the United States over tariffs and sovereignty.”

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Seeking votes in the center

Still, as the pro-fossil-fuels messaging wins support in some quarters, the question is how much Carney may need to play down his green resume to win — and how much climate policy will be integrated into his plans if he does.

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At the far right of the political spectrum, attempts to discredit his climate credentials are well underway. Jordan Peterson, the Canadian psychologist and podcaster who has attacked climate science, recently wrote that Carney is a “woke, broke, net zero fanatic.” (He also conducted a much-friendlier 100-minute interview with Poilievre.)

Closer to the middle, though, there are likely votes at play. Carney is frequently described as a centrist, and his roots in business, expertise in economics and global contacts can be seen as assets at a time Canada is looking to diversify relationships beyond the US. In addition to helming two central banks, he served as chair of Brookfield Asset Management Ltd. and helped found GFANZ, a global network of institutions committed to decarbonizing the economy that’s been rocked by high-profile exits in recent months. (He co-chaired the latter with Bloomberg LP founder Michael Bloomberg and also served as chair of Bloomberg Inc.)

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Carney “is a robustly green technocrat,” said Green. He believes in the power of markets and multilateral processes and sees climate change “fundamentally as a sort of technocratic problem.”

According to Green, that may mean missing out on bigger opportunities in a rare moment of national unity, spurred by anger over Trump’s policies. “A courageous politician could swing for the fences” by overtly linking solutions to Canada’s safety-net challenges to climate protection, she said.

To that end, a minority electoral victory for Carney, in which he relies on some support from the left-leaning New Democrats, could result in the most ambitious climate policy, according to global think tank Stratfor.

But regardless of who wins on April 28, there’s no plan to phase out fossil fuel production in Canada. “We need a plan for winding down supply,” said Green. “And of course this is the third rail of climate politics in Canada. Nobody’s really talking about this in any meaningful way.”

—With assistance from Kevin Orland and Laura Dhillon Kane.

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