Canada’s highest court yesterday upheld the constitutionality of a carbon tax, handing a victory to Prime Minister Justin Trudeau, who has made carbon pricing the central plank of his plan to combat climate change.

In a 6-3 decision, the Supreme Court of Canada ruled the federal government was on solid legal ground when it implemented the Greenhouse Gas Pollution Pricing Act, a 2018 law that imposed a carbon tax on individual provinces.

Chief Justice Richard Wagner wrote in the majority opinion that muscular federal policy is necessary to tackle a global problem like climate change.

“No one province, territory or country can address the issue of climate change on its own,” he wrote.

Three provinces—Ontario, Alberta and Saskatchewan—had filed separate lawsuits over the carbon tax, arguing that it infringed on their jurisdiction and ran afoul of the Canadian Constitution.

Lower courts had split on the question of whether the tax violated the constitution’s “peace, order and good government” clause, which says that certain laws fall under the jurisdiction of individual provinces, except in the case of national emergencies or issues of “national concern.”

The government had argued that climate change is an issue of national concern, and thus the carbon tax fell under its purview. Appeals courts in Saskatchewan and Ontario had agreed.

But in February 2020, the Court of Appeal of Alberta ruled in a 4-1 decision that the law is a “constitutional Trojan horse” that would give the government wide-ranging power to intervene in provincial affairs.

The Supreme Court of Canada held oral arguments in the case over two days in September.

Two of the court’s nine judges dissented from the majority opinion yesterday, arguing that a carbon tax wasn’t a legitimate issue of national concern.

A third judge, Suzanne Côté, dissented in part, agreeing with the majority but objecting to how the tax conferred broad authority to the government’s executive branch.

The tax “is, in its current form, unconstitutional. It cannot be said to accord with the matter of national concern formulated by the majority because the breadth of the discretion that it confers on the Governor in Council results in no meaningful limits on the power of the executive,” Côté wrote.

Lessons for U.S. legislation

The Parliament of Canada passed the Greenhouse Gas Pollution Pricing Act in 2018, and Trudeau’s Liberal Party implemented it in 2019. The law applied to four provinces that had not already enacted prices on pollution.

Currently, carbon emissions are taxed at 30 Canadian dollars ($23.88) per metric ton. But in December, Trudeau unveiled a new climate plan that called for the tax to rise to CA$170 ($135.33) in 2030.

Overall, the Liberal Party has set a goal of slashing greenhouse gas emissions by more than 30% below 2005 levels by 2030 as part of its commitment under the Paris Agreement.

“Carbon pricing is just one of the tools that Canada is using to fight climate change, but we are still far from being on track to reduce greenhouse gas emissions and limit warming to 1.5 degrees as agreed to in Paris in 2015,” Keith Brooks, programs director at Environmental Defence, a Canadian green group, said in a statement yesterday.

“The federal and provincial governments must do more to address emissions in Canada. Hopefully this ruling clears the way for that,” Brooks added.

In the United States, a handful of lawmakers introduced legislation in the last Congress to tax carbon emissions and pay the proceeds to taxpayers as dividends.

The “Energy Innovation and Carbon Dividend Act of 2019,” H.R. 763, from Democratic Rep. Ted Deutch of Florida would set an initial price on carbon emissions of $15 that would increase by $10 each year.

But the idea has struggled to gain traction with lawmakers and the Biden administration, and it’s likely to be left out of a major green infrastructure bill taking shape on Capitol Hill.

Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2021. E&E News provides essential news for energy and environment professionals.