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Canada’s carbon tax was supposed to be different. Unlike the proposed cap-and-trade scheme in the United States or the European Union’s carbon trading system, Canada’s program was not a kitty for green energy subsidies. The tax would be split into two pieces: a charge on large industrial emitters, largely raised through provincial systems where more intensive emitters buy credits from those that emit less, and a tax on consumers that took the form of a charge on fuels, including gasoline. And the best part: The bulk of the revenue raised by the tax would be returned to provinces and individual taxpayers.
Five years after it was put in place, however, Canada’s new Liberal prime minister, Mark Carney, scrapped the consumer half of the tax as one of his first acts in office. In doing so, he was trying to cut off a potent line of attack from the opposition Conservative party, whose leader, Pierre Poilievre, has tried to center upcoming national elections on the issue. Polling from earlier this year showed that overall support had fallen from 56% in 2021 to 45% today, while Liberal support for the tax had fallen even further, from 83% to 70%.
This was despite reams of outside and official data showing that most Canadians benefited from the tax, at least in terms of (Canadian) dollars paid compared to those received in rebates. Per Canada’s Parliamentary Budget Officer, Ontario households in the median quintile (i.e. between the 40th and 60th percentile) came out $117 ahead on average this year. And although the tax did have a slight negative effect on economic growth of 0.6%, according to PBO estimates, that study didn’t take into account the value of lower greenhouse gas emissions.
If a carbon tax and dividend can’t work even in Canada, it appears to confirm a distressing truth for climate activists — that even if people are concerned about climate change, they don’t want to pay very much to fix it.
Popular discontent with the tax — especially among Conservative voters — picked up dramatically in 2022, alongside rising gas prices. The thinking goes, “if the price of gas goes up, it’s the carbon tax,” Kathryn Harrison, a professor of political science at the University of British Columbia, told me. But while it’s true that the carbon tax makes gas more expensive, the tax is a fixed charge, meaning that any big jump in gas prices cannot possibly be its fault. Then again, when gas prices are already high, anything extra can feel especially noxious.
“People hate the idea of a tax,” Harrison said. “When they know there’s a tax, they perceive the impact as much greater than it has been.”
There’s also a strong political element to how people feel about a carbon tax. Along with fellow researchers Matto Mildenberger, Erick Lachapelle, and Isabelle Stadelmann-Steffen, Harrison examined rebate programs in Switzerland and Canada for a 2022 paper published in Nature Climate Change, and found that the simple matter of dollars (or francs) and cents could not overcome the carbon tax’s well-established political identity. In Canada, Conservative voters tended to underestimate the rebate’s size more than Liberals did.
Carney is in some sense an odd figure to ditch carbon pricing. Before his leadership campaign, he was a prominent figure in climate finance, heading up climate transition investing at Brookfield Asset Management, a huge renewable investor and developer, and was the co-chair of the Glasgow Financial Alliance for Net Zero, a financial institution decarbonization group. Ideally Carney told a BBC interviewer at the 2021 COP26 Summit in Glasgow, “we would have a global carbon price.” And though that would have to vary depending on a company’s relative economic position, “everyone should try to have a price on carbon,” he said.
In canceling the tax on Friday, however, Carney said that it had become “too divisive” and was “not working,” echoing language from his leadership campaign.
The cancellation comes as the federal fuel charge was set to rise 3.3 cents per liter, from 14.3 cents to 17.6 cents. During his party leadership campaign, Carney proposed that the fuel charge be replaced with “a system of incentives to reward Canadians for making greener choices, such as purchasing an energy efficient appliance, electric vehicle, or improved home insulation.” Sound familiar?
So where does this leave carbon tax proponents? If one can’t survive in Canada, where can it?
Catherine Wolfram, an economist at MIT and former Biden Treasury official, is, like many economists, a supporter of carbon pricing. She told me that “too many people are dancing on the grave of carbon taxing writ large,” noting that the industrial side of Canada’s carbon tax is still active. And so If someone came to her for advice on a carbon tax, she would tell them to “start with something very far upstream. Start with industry. Don’t touch retail gasoline until more substitutes are available to consumers.”
She also pointed out that the industrial side of the tax was still alive in Canada, and Carney’s decarbonize your life-style proposal could address individual carbon emissions. But wouldn’t this just be the Inflation Reduction Act all over again, I asked her?
No, she said, because Canada still, for now at least, has a tax on industrial emitters.
“If we could get the U.S. to where Canada is now, I would be delighted,” she said.
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Today’s conversation is with Chris Moyer of Echo Communications, a D.C.-based communications firm that focuses on defending zero- and low-carbon energy and federal investments in climate action. Moyer, a veteran communications adviser who previously worked on Capitol Hill, has some hot takes as of late about how he believes industry and political leaders have in his view failed to properly rebut attacks on solar and wind energy, in addition to the Inflation Reduction Act. On Tuesday he sent an email blast out to his listserv – which I am on – that boldly declared: “The Wind Industry’s Strategy is Failing.”
Of course after getting that email, it shouldn’t surprise readers of The Fight to hear I had to understand what he meant by that, and share it with all of you. So here goes. The following conversation has been abridged and lightly edited for clarity.
What are you referencing when you say, ‘the wind industry’s strategy is failing’?
Anyone in the climate space, in the clean energy space, the worst thing you can do is go silent and pretend that this is just going to go away. Even if it’s the president and the administration delivering the attacks, I think there’s an important strategy that’s been lacking in the wind and other sectors that I don’t think has been effective. There was a recent E&E News story that noted a couple of wind developers when asked for comment just say, “No comment.” This to me misses a really big opportunity to not get in a fight with people but talk about the benefits of wind.
Not taking advantage of milestones like ground breaking or construction starting is a missed opportunity to drive public opinion. If you lose support in public opinion, you’re going to lose support from public officials, because they largely follow public opinion.
And there’s no way that’s going to change if you don’t take the opportunities to talk about the benefits that wind can provide, in terms of good-paying local jobs or supplying more electrons to the grid. By almost any measure the strategy employed so far has not really worked.
Okay, but what is the wind industry strategy that isn’t working? What are they doing to rebut attacks on the technology, on property values, on the environment?
We’re not hearing them. We’re not hearing those arguments.
You can’t let criticisms go unanswered.It would better serve the industry and these companies to push back against criticisms. It’s not like you can’t anticipate what they are. And what do you have to lose? You’re in the worst position of any energy sector in this political moment. It would be nice to see some fight and sharp campaign skills and strategic effort in terms of communication. And there’s no strategic value from what I can tell in [being silent].
I understand not wanting to pick a fight with folks who hold your fate in their hands, but there’s a way to thread a needle that isn’t antagonizing anybody but also making sure the facts have been heard. And that’s been missing.
You’d specifically said the industry should stop ‘being paralyzed in fear and start going on offense.’ What does that look like to you?
Taking every opportunity to get your message out there. The lowest hanging fruit is when a reporter comes and asks you, What do you think about this criticism? You should definitely reply. It’s lifting up third-party voices that are benefiting from a specific project, talking about the economic impacts more broadly, talking about the benefits to the grid.
There’s a whole number of tools in the toolbox to put to use but the toolboxes remain shut thus far. Targeted paid media, elevating the different voices and communities that are going to resonate with different legislators, and certainly the facts are helpful. Also having materials prepared, like validators and frequently asked questions and answers.
You’re trying to win. You’re trying to get your project to be successful and deliver jobs and tax revenue. And I think it would be wise for companies to look at the playbooks of electoral campaigns, because there’s lots of tools that campaigns use.
How do renewable energy developers get around the problem of partisanship? How do you get outta that through a campaign approach?
These projects are decided locally. It’s deciding who the decision-makers are and not just letting opponents who are getting talking points through right-wing media show up and reiterate these talking points. Oftentimes, there’s no one on the pro side even showing up at all, and it makes it really easy for city councils to oppose projects. They’re losing by forfeit. We can’t keep doing that.
And more on this week’s most important conflicts around renewable energy.
1. Chautauqua, New York – More rural New York towns are banning renewable energy.
2. Virginia Beach, Virginia – Dominion Energy’s Coastal Virginia offshore wind project will learn its fate under the Trump administration by this fall, after a federal judge ruled that the Justice Department must come to a decision on how it’ll handle a court challenge against its permits by September.
3. Bedford County, Pennsylvania – Arena Renewables is trying to thread a needle through development in one of the riskiest Pennsylvania counties for development, with an agriculture-fueled opposition risk score of 89.
4. Knox County, Ohio – The Ohio Power Siting Board has given the green light to Open Road Renewables’ much-watched Frasier Solar project.
5. Clay County, Missouri – We’ll find out next week if rural Missouri can still take it easy on a large solar project.
6. Clark County, Nevada – President Trump’s Bureau of Land Management has pushed back the permitting process for EDF Renewables’ Bonanza solar project by at least two months and possibly longer .
7. Klickitat County, Washington – Washington State has now formally overridden local opposition to Cypress Creek’s Carriger solar project after teeing up the decision in May.
It’s governor versus secretary of state, with the fate of the local clean energy industry hanging in the balance.
I’m seeing signs that the fight over a hydrogen project in Wyoming is fracturing the state’s Republican political leadership over wind energy, threatening to trigger a war over the future of the sector in a historically friendly state for development.
At issue is the Pronghorn Clean Energy hydrogen project, proposed in the small town of Glenrock in rural Converse County, which would receive power from one wind farm nearby and another in neighboring Niobrara County. If completed, Pronghorn is expected to produce “green” hydrogen that would be transported to airports for commercial use in jet fuel. It is backed by a consortium of U.S. and international companies including Acconia and Nordex.
One can guess why investors thought this rural Wyoming expanse would be an easier place to build: it’s an energy community situated in the middle of the Powder River Basin and the state’s Republican governor Mark Gordon has supported wind projects in the state publicly, not just with rhetoric but votes in favor of them on the State Board of Land Commissioners.
Wind is also often proposed on private land in Wyoming, which is supposed to make things easier. You may remember the Lucky Star and Twin Rivers wind farms, a pair of projects whose progress I’ve watched like a hawk because they’re tied to the future of wind permitting at the national level. As we first reported, the Trump administration is proceeding with potentially approving the transmission line for Lucky Star, a project that would be sited entirely on private land, and Twin Rivers received its final environmental review in the last days of the Biden administration, making it difficult for anti-wind advocates to curtail.
Unlike those projects, Pronghorn has created a fork in the road for wind in Wyoming. It’s because the people in its host community don’t seem to want it, the wind projects were on state land, and there’s politics at play.
Despite being considered an energy community, Converse and Niobrara are both areas with especially high opposition risk, according to Heatmap Pro, largely due to its low support for renewable energy, its demographics, and concerns about impacts to the local ranching economy. After Gordon and other members of the state land use board approved two wind facilities for the hydrogen project, a rancher living nearby sued the board with public support from the mayor of Glenrock and the area’s legislators in the statehouse. A member of the Converse County zoning board even published a “manifesto” against the project, detailing local concerns that are myriad and rooted in fears of overburden, ranging from water use and property value woes to a general resentment toward an overall rise in wind turbines across the county and state.
What’s probably most concerning to wind supporters is that this local fight is bubbling up into a statewide political fracture between Gordon and his secretary of state Chuck Gray, who is believed to be a future candidate for governor. Grey was the lone dissenting vote against the two wind projects for Pronghorn, saying he did not support the projects because they would be assisted by federal tax credits Trump is trying to gut. Gray then took to mocking the governor on social media for his stance on wind while posting photos of broken wind turbines. Gordon wound up responding to his secretary of state accusing him of being the “only member of the state land board to vote against individual property rights and Wyoming schools.”
“That is his prerogative to be sure, but it demonstrates his disregard for the duties of his office and a determination to impose his personal preferences on others, no matter the cost,” Gordon stated.
I’ve been reaching out to Pronghorn and its founder Paul Martin to try and chat about what’s happening in Wyoming. I haven’t heard back, and if I do I’ll gladly follow this story up, but there’s a sign here of an issue in Wyoming whether Pronghorn gets built or not – areas of Wyoming may be on the verge of a breaking point on wind energy.
I heard about the Pronghorn project in conversations this week with folks who work on wind permitting issues in Wyoming and learned that the Gordon-Gray feud is emblematic of how the wind industry’s growth in the state is making local officials more wary of greenlighting projects. Whether Gordon’s position on private property wins out over Gray taking up the mantle of the anti-wind conservative critic may be the touchstone for the future of local planning decisions, too.
At least, that’s the sense I got talking to Sue Jones, a commissioner in Carbon County, directly southwest of Converse County. Jones admits she personally doesn’t care for wind farms and that it’s “no secret with the county, or the developers.” But so far, she hasn’t voted that way as a commissioner.
“If they meet all our rules and regs, then I’ve voted to give them a permit,” she told me. “You can’t just say no to anything. It’s a good thing that we value private property rights.”
Jones said the problem in Carbon County and other areas of Wyoming is “saturation level.” Areas of the state where only a handful of landowners hold thousands of acres? That’s probably fine for wind projects because there’s a low likelihood of a neighbor or two having a genuine grievance. But as wind has grown into population-denser areas of the state the dissent is becoming more frequent.
My gut feeling is that, as we’ve seen in many other instances, this resentment will bubble up and manifest as sweeping reform – unless the wind industry is able to properly address these growing concerns head on.