Trudeau urged to move quickly on carbon pricing backstop or risk climate capital investment

financialpost.com:

Business and environmental groups are pushing Prime Minister Justin Trudeau’s government to quickly enact a program to guarantee carbon pricing revenue, or else lose out on the investments needed to reach Canada’s climate goals.

In a letter to Finance Minister Chrystia Freeland, they asked the government to open up access to the program — known as “contracts for difference” — as widely as possible, instead of doing individual deals with companies.

Carbon contracts for difference are effectively a public backstop for Canada’s carbon pricing regime. The contracts might be used to guarantee a floor price for carbon credits or to lock in the scheduled increase to the carbon price over the next decade, regardless of future government decisions.

The purpose is to give companies some long-term certainty about the economics of curbing emissions so they can make decisions involving billions of dollars in capital projects — such as installing equipment that captures greenhouse gas emissions before they escape to the atmosphere.

The letter is another sign of the pressure on the Canadian government to keep up with the U.S., its largest trading partner, which is providing lucrative tax credits for green manufacturing through the Inflation Reduction Act.

Business groups have also been pushing Trudeau and Freeland to speed up the launch of clean-energy tax credits that were promised in this year’s federal budget.

“The risk of taking too long is capital fleeing Canada,” said Etienne Rainville, director of government relations with Clean Prosperity, a group that advocates market-based climate programs and led the effort to send the letter.

The signatories range from the cement industry to fuel producers to environmental groups such as