Front Burner - Mark Carney: climate friend or foe?

Episode Date: December 5, 2025

In 2015, as governor of the Bank of England, Mark Carney’s ‘Tragedy of the Horizons’ speech made waves in the global climate community. It was seen as a landmark call for the financial sector to recognize the costs of climate breakdown.But fast forward 10 years and a fierce debate is swirling around whether Carney is living up to that warning. Since becoming Prime Minister, he’s scrapped the consumer carbon tax, froze EV mandates and paved the way for a potential new pipeline to the B.C. coast.With a Trudeau-era environment minister resigning from Carney’s cabinet in protest, we’re asking the question: has Mark Carney betrayed the climate movement? Or is he playing a strategic long game that aims for an environmental win?Two writers from Canada’s National Observer, Ottawa Bureau Chief John Woodside and Calgary-based lead columnist Max Fawcett, join the show to take up that debate.For transcripts of Front Burner, please visit:  https://www.cbc.ca/radio/frontburner/transcripts

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episodes from the last year, or an episode of ours that stood out to you, we would love to hear from you. You can ask us just about anything, about how we put the episodes together, how we identify guests, how we ultimately decide on the stories we'd like to turn into episodes, or any other behind-the-scenes questions you might have. We'll try to get through as many of them as we can. You can send them to front burner at cbc.ca. Okay, here's the show. change pale in significance compared with what might come. And the far-sighted amongst you are anticipating broader global impacts on property migration, political stability, as well as food and water security. So the question is, why isn't more being done today to address it?

So this is Mark Carney, back in 2015 when he was the governor of the Bank of England. This speech he gave at the time was seen as a landmark speech on the financial risk of climate Fast forward 10 years and a fierce debate is swirling about whether Carney is living up to that warning. Because since becoming Prime Minister, he has scrapped the consumer carbon tax, froze EV mandates, and just paved the way for a new potential pipeline to the B.C. coast. A Trudeau-era Environment Minister has resigned from his cabinet position over all of this. So, has Mark Carney betrayed the climate movement? Or is he playing a strategic long game that aims for an environment?

win. To debate and interrogate that, I am joined by two writers from Canada's National Observer and online publication really focused on climate change. John Woodside is the Ottawa Bureau Chief, and Max Fawcett is a lead columnist based in Calgary. Hi, Max. Hi, John. It is great to have you both on the show. Hi, Jamie. Thanks for having us. Yeah, this is great. Thank you. So before we interrogate this idea of whether Mark Carney has betrayed the climate movement, I do want to spend some time fleshing out what we know about Carney's philosophy on climate action before he was Prime Minister. And Max, what has Carney done in the past to cultivate an image as an environmentally conscious banker? Well, you mentioned that speech from 2015, and that really was kind of a landmark thing among climate finance wonks, which is admittedly a pretty small group of people.

But, you know, he was laying out, I think, really for the first time in that level of detail, the fact that climate change wasn't just a moral imperative. It wasn't just about doing things for the environment. It was a financial risk. This need to manage emerging mega risks is as important as ever. Because alongside major technological, demographic, and political shifts, our very world is changing with profound implications for insurers. for financial stability and for the economy. And this was something that central bankers like him were very mindful of coming out of, you know,

the 2008 financial crisis, the housing crash in the United States and everything that led up to that, they were looking for where the other systemic risks were in the system. And what Carney was doing in that speech and what he did in the ensuing years, both at the Bank of England and afterwards, was really making the case that if we don't address climate change,

it presents a systemic risks to our banks, to our insurance industry, and that could have the same sort of toppling effect through the entire economy as the housing crisis did in 0708. And so it's not that he wasn't making an environmental argument. It's that he was bringing the business community into it and saying, look, even if you don't take this seriously, even if you don't think this is real, it has a material impact on your long-term future. You need to take this serious. And that was, I think, for the climate movement at the time, a really big deal. Yeah. John, anything to add here? You know, what did you see from him when he was working as the UN Special Climate Envoy? He also wrote this book called Values. He talks about the climate issues a lot in that book.

Yeah, I would endorse Max's view there. What we saw after that when he was with the UN was him forming a group that was called the Glasgow Financial Alliance for Net Zero or GFANS. And it was the proposed solution to these risks, essentially. It was, at the time, hundreds of firms with $130 trillion worth of assets that he had brought together, and the claim was that they were committed to net zero. And GFANS is the gold standard for net zero. All members have followed rigorous internal governance processes to make their commitments, commitments that will reshape their business models to fund the sustainable transformations

of our economies. That alliance is pretty much all but collapse at this point, but the message he had in the room was this is a tremendous profit opportunity. The energy transition is your chance to realize enormous profits through investing. I think when you then look at what he was saying in a little bit more detail. What you start to see is that he was speaking the language of finance to really communicate very typical financial points, manage risks, capitalize on opportunities. And those risks from climate change would be things like floods, fires, lawsuits, transition risks, that kind of thing.

But on the investing side, the profit side there, we need a whole lot of new infrastructure, you know, both to cut emissions but also to adapt to warming already locked in. And to realize those profits, Carney's pitch was essentially governments need to now fork over projects because we have the money to invest. So you need to provide us with the projects. And the government also needs to use its power to de-risk these investments using, you know, taxpayer subsidies or regulatory certainty or whatever it may be. But de-risk these so that the private sector is confident. You know, so I was there in Glasgow and I don't want to paint with too broad of a brush because there were certainly critics of that approach. But overwhelmingly, Karnie was really seen as something of a rock star in that space.

The financial sector was long criticized for not playing its part. And here he was saying the time has come where we will. The money is here if the world wants to use it. Through the campaign, as he's running to become prime minister, do we see these same ideas from him? What we saw during the campaign was a lot more focus on the threat of Donald Trump. It was about how are we going to defend Canada? And I think climate took a relative back seat. He did have some references to it.

I mean, he spoke of some sectors that we were too tangled with the United States on, things like auto and energy. but he did speak about how the world is changing, and this is an opportunity to build new trading relationships in the new sectors like clean energy and artificial intelligence. Today I'm announcing a comprehensive new approach to make Canada the world's leading energy superpower. But a lot of the promises that were then made in the election platform, the liberal platform, we're starting to see undermined. Not all of them, but a lot of them. there was a commitment to protect nature. We've got apparently nature strategies coming

in the next couple of weeks, so we'll see what's there. But it talked about safeguarding peatlands and reviving our coastal waters. Well, now we're also talking about mining in peatlands. Unlocking these resources through projects in the Ring of Fire in Ontario. And we're also talking about potentially carving out an exemption to the oil tanker moratorium

in the Great Bear Sea. Are you at all considering repealing either the tanker ban or the emissions cap, yes or no? It depends, and it does. So a little tricky to see how that one aligns. The platform talked about funding home retrofits to improve energy efficiency, but we've since seen the Canada Greener Homes loan program canceled.

There was a commitment to expand Canada's electric vehicle charging network and potentially reintroduce purchase incentives. We haven't seen anything on that, but we have seen the sales mandate paused. You could run through the list. I mean, there's quite a few examples where I don't think the promises that were made are being left up to. Max, let me bring you in here because since becoming Prime Minister, John's talked about some of the stuff that we've already seen. You mentioned the EV mandate pause, but we've also seen the proposed oil and gas cap, announced plans to gut anti-greenwashing rules,

giving the government power to override environmental regulations to build major projects. The major projects bill that went through earlier this year doesn't include anything about prior consent from indigenous people. And then, of course, now we see this paving the way for this new pipeline. Now, as part of this memorandum of understanding, Ottawa has agreed to repeal or scale back a series of environmental regulations in Alberta, such as scrapping the idea of an oil and gas emissions cap, suspending clean electricity regulations specifically in Alberta, and being willing to adjust the oil tanker ban along BC's, coast as necessary.

Do you see the same Carney that you saw at COP and during the campaign even today as Prime Minister? Not at COP, because he was in a different role then. But as Prime Minister, yeah, this is the same guy. His first decision as Prime Minister before we had the election was to kill the consumer carbon tax, which was the signature centerpiece of the Trudeau government's climate infrastructure. This will make a difference to hard-pressed Canadians. but it is part of a much bigger set of measures that this government is taking to ensure that we fight against climate change,

that our companies are competitive, and the country moves forward. So it's my honor on behalf of my colleagues to sign this one. He made it clear that he was not going to be wedded to the way they did climate politics, and he was not going to be wedded to their policies. And if you followed Carney's career, if you knew the way he thought about, climate issues, you knew that he was going to focus on the industrial carbon price. And that is exactly what he has done. He has an approach and, you know, he gave a speech to university students in Ottawa about a week before the budget. Budget 2025 will introduce our climate competitiveness

strategy with a focus on results over objectives, on investments over prohibition. We will build sustainably. That is a pretty big contrast from the Trudeau years, where they were much more into prohibitions over investment. And that's the banker he's always been. He believes that capitalism can be used to good purposes. That was, you know, sort of the whole argument of his book values was, you know, markets are good if we can turn them in the right direction and point them in ways we want them to go. And so this is the same guy. You know, I think some folks might have misread the scope of his commitments or misread his willingness to continue with the infrastructure that the Trudeau government put in place.

But to me, he's been pretty consistent from day one as a politician, because as a politician, you're in a different space. This is the art of the possible. And what's possible on climate change right now is so fundamentally different from when he gave that speech in 2015, from when he was with the UN, even from, you know, 12 months ago, practically. And he is operating in a much narrower space than I think any prime minister, frankly, in Canadian history on this issue.

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Discover prevention tips that can help you be climate ready at keep it intact.ca. Can you just elaborate for me a little bit more? on this focus on the industrial carbon tax on this bet that he's making the, and what you think he's actually doing there and why you think it's a smart move. And then I'll come back to John for the other side. Sure. So we know from, you know, a lot of research out there, the Canadian Climate Institute put out a report last year that basically estimated, you know, where the reductions would come from under the Trudeau Carbon, the Trudeau Climate Plan, excuse me. And the industrial carbon tax was the big lifter. It did the bulk of the work.

And it does so with a lot less political downside than all of the other policies. It has no real impact on consumers. It doesn't raise food prices. Sorry, conservatives. That's not true. You know, it does the most work with the least political friction, let's say. And so, you know, from that perspective, I think it's always struck him and struck a lot of people in the climate community as the best basket to put our eggs in. You know, the Trudeau government spread its eggs around.

It had, you know, it had the clean electricity regulations. that had the oil and gas emissions cap. Economists, when they look at that, they've said, time and time again, if you have a $170 per ton industrial carbon tax, you do not need the clean electricity regulations. You do not need the oil and gas emissions cap

because the industrial tax will do the heavy lifting. Clean prosperity, another sort of climate group, came out today with a new study that says if we get the, and this is going to get walk-ish, the effective credit price, not the headline, but the effective, cost of a carbon credit up to $130 per ton, it would reduce 90 megatons annually of carbon pollution

just in Alberta, which is three times more than the clean electricity regulations would. So, I mean, that right there kind of says it all. And just for people listening, just for clarity, the MOU, the deal that was just made with Alberta, what it does is it ramps up this industrial carbon pricing system to a minimum effective credit price of like 130 bucks per 10, right? John, do the other side of that for me because, you know, obviously Trudeau's former environment minister, Stephen Gilbeau, doesn't agree with what Max just said. And I know that you interviewed him earlier this week. And basically his argument is that this government is dismantling really important pillars of a broader climate strategy here. Sure. There's one thing I wanted to just add in, though, into what? was just said. I think what the MOU does is it lays out a path to negotiate a stronger industrial

carbon price. But we don't actually have a stronger industrial carbon price yet. We've already seen Alberta basically taking a swipe at it. I mean, within like basically the day the MOU comes out, they're already sort of trying to walk that side back. So at this point, we don't actually know what the price is going to look like, and we don't have a timeline for it. The way I read it is the government traded a lot of environmental policies on a condition that we will negotiate a stronger one. But I don't think we actually have a stronger one yet. And it remains to be seen what those negotiations actually shake out to. Good point. Good point. Can I just jump in there for a quick counterpoint? It's a trade and it's conditional on both sides. So if the industrial

carbon price doesn't get ratcheted up, the clean electricity regulations will be put into force. oil and gas emissions cap will be put into force. So that conditionality works both ways. The conditionality does work both ways. And I mean, maybe this is something we can talk about now, or maybe we'll get to a little bit later. But a concern I would have, you know, if I was a policymaker here, would be putting our eggs into a basket that is similar to the problems that we saw with the last government with consumer carbon pricing. Economists were very in favor of consumer carbon pricing as well. Return more money to more people. than it took away from them, and yet it was still so politically vulnerable.

I think we're kind of operating, unfortunately, in a post-truth to use that cliche type of environment where there are bad operators out there that will try to mislead the public on this. Even if the math works out, I still think it is a politically risky approach, let's say. Yeah, and just put yourself in Stephen Gilbeau's shoes a little bit more for me here. Like, tell me a little bit more about his arguments against what the government is doing here in addition to what you just said. Sure, yeah. So his main takeaway, I think, is that the government is betraying its commitments and not being honest with the public. All of it too much for liberal Stephen Gilbeau, who announced he's resigning from cabinet. In a statement, the lifelong environmentalist said he strongly opposes the Memorandum of Understanding

and a reversal of some laws he put in place when he was Environment Minister. So when it comes to not being honest, you know, he's talking about things like our 2030 emissions targets under the Paris Agreement. Those are practically out the window now because we've been dismantling climate policies. The government's spin these days is, well, it was always going to be tough to achieve those. But, you know, no one said it was easy. But if you're going to reduce emissions, you need policies in place. And what we started to see in the second half of the Trudeau years was that the policies were taking effect and the emissions were starting to decouple from the economy.

We were seeing economic growth and emissions come down. I think there was still lots of room for improvement, but they were starting to work. So, of course, if you start to dismantle these, you start pulling the Django blocks, eventually it will come down. Another example of the dishonesty, frankly, was the current environment minister, Julie DeBrucson. She told the House Committee recently that she wasn't sure she couldn't say whether a new bitchement pipeline increases or decreases emissions. Well, you know, it obviously increases them. And, you know, it wouldn't be too hard to spin it as, yes, it increases emissions, so we'll have to find cuts somewhere else.

But she just wouldn't say. So there are sort of some honesty problems here. When it comes to betraying commitments, though, the one that stung Gilbo most had something to do with what's called enhanced oil recovery. And enhanced oil recovery is basically industry jargon for using carbon dioxide to loosen up oil in a reservoir so that you can extract even more of it than he normally could. What happened here was that as Carney was preparing its budget, the government was kind of on a knife's edge. kind of despite the fact that Carney governs as if he has this commanding majority, the fact is we're in a minority government. He needs other parties' support to carry out his vision.

And the liberals wanted Elizabeth May's vote. They wanted her support. And Guilopo was put in charge of negotiating with May. What are your red lines going to be? And I'll relay that back. And for May, one of the red lines was you can't use carbon capture tax credits. So government money given to companies. You can't use this for enhanced oil recovery because it leads to more emissions.

The whole point is to invest in capturing carbon to bring emissions down. So that was her redline. Guilbo communicates that back to the government. And budget day comes, the carbon capture tax credit is there. And it says it will not be used for enhanced oil recovery. So May got what she wanted. She supported the budget. Against what I had expected to say to you today, I'm going to vote yes.

For the country, for the plan. planet, and for my hope in the future, the Liberals can't count on me voting confidence in the government again without delivering on the words I heard. Mure weeks later, in the MOU, which Gubo was only briefed on a couple days before it was publicly revealed, he sees that in Hansel recovery will be in the tax credit. That was something Daniel Smith wanted. It was something that Gubo felt I had given my word to Elizabeth May, the party had given our word to Elizabeth May, and we just betrayed it. Now we see Elizabeth May saying the prime

minister's word can't be trusted. I'm someone who acts on principle, and I don't regret how I voted, but I voted based on trusting that the prime minister would keep his word, and that's where I went wrong. And Gilbo quits, you know, basically feeling like he can't defend this government's decision here. Max, what do you make of all of that? I was listening to Gilbo tell that story. yesterday as well. I mean, it's a personal decision for him. I think the fact that he stayed in caucus speaks to the fact that he's not burning the boats here. He's simply saying that this is a bridge too far for him. And, you know, fair enough. I don't think that it is going to be the destabilizing effect on the government that some have said. You know, Gibo is actually not as popular in Quebec as

it may seem. There's a, an abacus bull that's, I think, going to come out soon that says that Doug Ford is more popular in the province than him. So, you know, I'm not sure this is going to be the downfall of the Carney government in Quebec. But if he wants to make enhanced oil recovery the hill he dies on as a cabinet minister, I think we tip our hat to him that shows, I think, some integrity, which maybe isn't always president or politics. But I don't think it changes the broader sort of calculus here for the Carney government. You know, we've heard it suggested that this is going to be sort of massively politically unpopular in BC. The polls don't show that. The polls show

quite a different story, and it's not clear where those votes are going to break down exactly, but it's just as likely that this could be a political winner for the government in terms of prioritizing the economy and being seen as getting things done as it is a loser among the climate community. And I would just

ask climate folks, especially if they're zeroed in on the clean electricity regulations, to just ask themselves, what are the political odds that the liberals are governing for the next 10 years? What are the odds that they remain the government for the next 20 years? Because that's what you need to believe to think that the clean electricity regulations are actually going to have an impact.

They don't take effect till 2035. They allow gas burning to go on until 2045. The conservatives would get rid of that at their earliest opportunity. So it really requires a belief that the liberals will govern for the next 20 years. I don't think Mark Carney has that belief. And I think his thinking is we need to get policies in place here that are more. durable and that are harder for a future conservative government to repeal. And getting Daniel Smith and her government to agree to an industrial carbon price is a pretty good way of doing that.

And would that be harder to repeal? Well, politically, I think so. If the business community is now factoring it in in terms of their operations, you know, there are businesses that benefit from an industrial carbon price because they generate a lot of credits they can sell on the market. And if that market is more viable, those credits are worth more. So there is a degree of buy-in that exists there that never existed on the consumer tax. And I just want to circle back to John's point earlier, because I think it was a really good one. You know, what is preventing a future government from doing to this to the industrial carbon tax, what they did to the consumer carbon tax? And I'll tell you, there's a line in the MOU that says that the two sides have

agreed to a financial mechanism to ensure that the carbon price is in place. And I apologize, this is the last wonkish term I will inflict on your listeners, but they're referring to something called carbon contracts for difference. And that is basically an insurance contract between governments and large emitters that guarantees them a price on pollution. And if a future government kills that price, they pay a massive penalty. So there would be a probably billion dollar, billions of dollars in penalties, the future federal government would pay if they backed off of the industrial carbon price. That is what will keep them in the game on this. John, I don't think I've asked you directly to respond to the idea that what Carney is doing

is kind of the art of the possible right now. What would you? you make of that of that argument well politics is always the art of the possible um politicians are operating in a limited space but i think it's incumbent for politicians that have a vision um if they're skilled to try to expand that space a little bit um i think if you want to build real political support for what you're doing you need to bring the public along with you so you know there's been some suggestions that Carney is, you know, making sacrifices, but he's going to kind of do something green and climate friendly on the other hand. What I see is a shredding of climate policies and a lot of fossil fuel boosterism. The major projects office has been deployed to

work on LNG Canada Phase 2 expansion, the Sealism's LNG expansion, the Prince Ruper gas transmission pipeline. Now we're talking about a new oil pipeline, which, you know, lots of people don't think will get built for a number of good reasons. We're talking about a Pathways Alliance Carbon Capture Mega Project, which is framed as, well, you know, now we'll be able to do decarbonized oil. But the emissions reductions pathways hopes to achieve would be far outpaced by a new pipeline and still doesn't even capture the majority of emissions from oil when it's burned. So decarbonized oil, as Mark Carney has framed, It is just, experts have described it to me as scientifically fraudulent.

So the world that I'm looking at here is there is a fast-changing political world, but there is a very, very real atmospheric reality where emissions keep accumulating, the planet keeps getting hotter, and the longer you put off this transition, the more at-risk Canada is of falling behind. And actually, I just want to be really clear on that. that point, right? Canada is already behind. This past cop in Brazil, COP 30, countries endorsed a plan to transition away from fossil fuels. They're going to be setting up their own diplomatic alliances to do it. Canada is not one of them. You know, Canada, by staying on the fossil fuel

path is with the United States and Russia and Saudi Arabia. On the other hand, you've got the European Union, China. The world is changing and Canada needs to make the choice because you can't really have it both ways in a long-term sense. Short-term, I think Carney's vision is, let me just try to get as much investment into the economy in as short a time as possible to try to be the fastest growing economy out of the G7. But there's no publicly communicated long-term vision here. So where I would come down on this is if Carney privately has an idea here, he needs to start communicating it if he wants the public to come along with him on this. And if he isn't thinking about it, then I think he's being short-sighted.

Max, any thoughts there? Yeah, I mean, I agree with John about the path of travel in the world. I disagree that you can group Canada in with the Russia's and the Saudi Arabia's and the United States. None of them have a industrial carbon price that is going to rise to anywhere close to $130 a ton. I do think that there is a middle way that Canada is trying to chart here, where it continues the production of fossil fuels for as long as it is economically viable. and it does what it can to reduce the upstream emissions associated with that, but it also builds the pathways to more electrification and more decarbonization.

And you see that in the policies that are even in the MOU. You know, there's an expanded intertie electricity to BC. That would help develop more wind and solar if the Premier of Alberta was interested in that. He is slowly piecing together the pieces for a national electricity grid, which is one of the things that climate advocates have been calling for for years. you know, through the budget, through tax credits. He is not shouting it from the rooftops. He's just doing the work.

And the biggest sort of work of all in terms of decarbonization, in terms of attracting low carbon investments, in terms of participating in this new world that China and other countries are starting to build, is with a robust and politically defended industrial carbon price. So, you know, I think he differs greatly from the previous liberal government in terms of his willingness to, to signal his virtue in terms of his willingness to communicate the scope of his ambitions, he's just doing the work. And I think that is probably in the end the more effective approach,

but time will tell. Okay. That seems like a good place for us to end today. Max, John, thank you both so much for this. Thank you for having us. It was a pleasure. That's all for today. Front burner was produced this week by Shannon Higgins, Matthew Amha, Lauren Donnelly, Joitha Shangupta, Matt Mews, McKenzie Cameron, and Sam McNulty. Our YouTube producer is John Lee. Our music is by Joseph Shabbison. Our senior producer is Elaine Chow. Our executive producer is Nick McCabe Locos, and I'm Jamie Poisson. Thanks so much for listening. For more CBC podcasts, go to cBC.ca.ca slash podcasts.