Can Carney still put together a credible climate plan? Does it matter?

Ten months before he resigned from Mark Carney's cabinet, Steven Guilbeault vouched for the then Liberal leadership contender.

"I've known Mark for many years. We've worked together on issues of green energy, transition, fighting climate change and the role of the financial sector in fighting climate change," Guilbeault told reporters when he endorsed Carney's candidacy to lead the party in January.

If Carney was known for anything other than being a central banker it was for his advocacy on climate change, going back at least a decade to a celebrated speech he delivered as governor of the Bank of England. He was the UN's special envoy for climate action and finance and co-chair of the Glasgow Financial Alliance for Net Zero (which unravelled just as Carney was preparing to seek the Liberal leadership).

But when Guilbeault announced his resignation, the former environment minister could list a number of climate policies that Carney's government had either abandoned, delayed or weakened. 

Did Guilbeault misjudge Carney?

"No, I don't think I did," Guilbeault said in an interview on CBC's Rosemary Barton Live this past weekend. "I've come to the conclusion that him and I have a different view of how we should go about fighting climate change."

Carney, Guilbeault suggested, takes the view that fighting climate change is largely going to be driven by markets and is averse to strict regulations. Such a distinction might explain why Carney's government is putting its emphasis on industrial carbon-pricing. 

It seems implausible that Carney was merely feigning interest in climate change up till now — it is, for instance, a major theme of Value(s), his 2022 book on economic theory and practice.

"Climate change is the ultimate betrayal of intergenerational equity," he wrote.

But if Carney's first nine months as prime minister have revealed a difference of opinion over how the federal government should go about fighting climate change — as to opposed to whether the federal government should do much to fight climate change — he now has to prove that his approach can put Canada on a credible path to net-zero emissions by 2050.

"I think there's not enough time anymore to get new policies in place to deliver on [Canada's] 2030 target, given the policies moved away from," says Dale Beugin, executive vice-president at the Canadian Climate Institute. "But I think that there is still time to get the long-term signals in place and that 2050 net-zero is still possible."

The industrial carbon-pricing systems adopted by provinces over the last decade have suffered from both design issues and political opposition. And the best climate argument for Carney's memorandum of understanding with Alberta Premier Danielle Smith might be that it promises to deal with both problems — strengthening the policy and winning Alberta's support for it.

But if Alberta strengthens its industrial carbon price, the federal clean electricity regulations would be suspended in the province. And the Climate Institute has fairly worried that granting such an exemption could undermine climate policy nationwide — effectively inviting provinces to petition for their own carve-outs.

To counter that risk, Beugin suggests that the Carney government should pursue an equivalency agreement with Alberta — a legal tool that federal and provincial governments can negotiate where there are disputes over different regulations.