Canada must learn from the green backlash

Observer

09-03-2025

As Canadians prepare to elect a new government, the rapid deterioration in relations with the United States will be front of mind. But the slow pace of decarbonisation of our planet, and Canada's role in turning this around, must be right alongside it.
The chance of limiting global warming to 1.5° Celsius above pre-industrial levels, as set out in the 2015 Paris climate agreement, is now vanishingly small. Despite many countries' efforts, global greenhouse-gas emissions have not even started to fall, and would have to decline by a staggering 7.5 per cent per year to stay within the carbon budget envisaged by the Paris agreement. If this does not change soon, the planet will start to cross climate tipping points, from the collapses of the Greenland Ice Sheet and the Labrador Sea Current to the abrupt thawing of the permafrost.
Addressing this existential crisis requires implementing policies that will accelerate the pace of decarbonisation by leveraging the improvements in green-energy generation and infrastructure. The desire is seemingly there – global surveys show that voters want more, not less, climate action. But politicians rightly sense that they will be penalised in the next election for taking aggressive action, leading to an overly cautious approach. We are thus winning the war too slowly, which, as climate activist Bill McKibben has pointed out, is the same as losing.
The political backlash against climate action is growing worldwide. Green parties are in retreat across Europe, and the European Commission is rethinking its Green Deal legislation in light of the continent's declining competitiveness, stoking fears that the bloc may scale back its targets. From Australia to Germany, incumbent governments have faced public pressure to abandon green policies. In the United States, President Donald Trump ran for re-election on a platform to reverse Joe Biden's signature climate policy. Similarly, in Canada, the Conservatives have embraced the rallying cry 'axe the tax' – referring to Prime Minister Justin Trudeau's carbon tax.
The political backlash against climate action is growing worldwide.
Policy backsliding is to be expected on occasion, and global progress must be resilient to such lapses, as it was during the first Trump administration. But the populist revolt against green policies offers some important lessons for the next Canadian prime minister.
Some of this pushback reflects the fact that the costs of climate action are not evenly distributed. To be politically sustainable, such policies must internalise these costs in the initial design phase. For example, economists have rightly championed carbon taxation as the most efficient way to curb emissions. But sometimes efficiency must be sacrificed – in this case, by resorting to alternative instruments or complementary measures to soften the blow of the green transition on segments of society that are less able to bear the cost.
To be clear, that does not mean invoking the compensation principle, which claims that the most efficient policy maximises the resources available to provide compensation for those negatively affected (it does), but fails to recognise that such compensation rarely takes place. Nor is it enough to say that if carbon taxation is revenue-neutral, as it is designed to be in Canada, this will somehow ensure that compensation will reach those who need it. Voters are smart, and unless policy credibly convinces potential losers that they will be made whole, the mere risk that they will lose can provoke a backlash. And, as we are seeing now, even a small group of affected citizens can wield outsize political influence, and their cause can be taken up by populist politicians.
This is not idle theorising. A paper that my former International Monetary Fund colleagues and I published in 2023 examined whether climate policies were politically costly in OECD countries, including Canada, over the last few decades. Our findings suggest that a voter backlash is avoidable when policy design ensures that those likely to lose disproportionately – whether poorer households or fossil-fuel firms – are protected, for example through social insurance, monetary compensation, or the gradual phase-in of green policies. Perceptions matter, too, and our research implies that some measures, especially carbon taxes, are particularly likely to be unpopular, while regulations that reduce emissions at a slightly higher social cost are more palatable for voters.
Climate policies must be compatible with social and political realities, and not based solely on economic efficiency. This is a lesson for all countries – including Canada – experiencing broad pushback against green measures. The world cannot afford populist politicians denigrating decarbonisation as a harmful obsession of the elite. Buy-in from the households and firms that will disproportionately bear the costs is necessary if we are to have any chance of avoiding catastrophic global warming. @Project Syndicate, 2025