When Mark Carney stepped into the Prime Minister’s role in Canada, there was a rare moment of optimism from across the political spectrum. Here was a leader who seemed to understand how our multiple crises interact, and what to do about them. A respected economist and seasoned central banker who protected Canada from the financial crisis; A UN special envoy on climate change who had implemented net-zero strategies in the companies he led; a community-minded thinker who wrote a book—called Value(s)—whose central argument is that to fix capitalism, companies need to put core social values ahead of profit.

As Prime Minister, Carney has enjoyed popular approval as a safe pair of hands to guide Canada through a fundamental shift in international relations, as our greatest ally and trading partner unleashed a chaotic trade war, threatened annexation, and tore up the rules on diplomacy. With his rhetoric of nation-building, and broad political appeal, it appeared Carney was the right man for the moment.

And solving climate change does call for bold nation-building projects. As Carney himself has argued, the transition to clean energy represents one of the greatest economic opportunities ever. To reach net-zero goals rapidly enough to stay with the UN’s 2°C threshold will require massive investments of public and private capital, and create millions of meaningful jobs in Canada. The resulting improvements in air quality and energy efficiency will make us all healthier and wealthier.

And yet last week, he committed Canada to another massive oil pipeline project in a deal with Alberta, which along the way discards the principles on which Canada’s environmental protections are built. The agreement removes Canada’s emissions cap for the oil and gas sector. It suspends the clean electricity regulations in Alberta. It prioritizes a new bitumen pipeline, and sets the stage for an accelerated approvals process that will bypass important environmental and social protections. It offers to lift the moratorium on oil tankers to allow for a new deep water port on the pristine coast of northern BC. And it promises to lift the restrictions on greenwashing so that the whole project can be sold to the Canadian public as “good for the environment”. All in return for Alberta implementing an industrial carbon pricing scheme that it is already required to do under federal law.

So how does this square with what Carney himself has written about climate change? The two chapters of his book, “Value(s)” that deal with climate change are impressive and impressively detailed. Identifying climate change as one of three global crises (the other two are the financial crisis and COVID), he uses his experience from the other crises to offer a clear-sighted plan for tackling climate change. He doesn’t pull his punches about the seriousness and urgency of the climate crisis, describing it as “a vicious cycle in which rising sea levels and more extreme weather are damaging property, forcing migration, impairing assets and reducing the productivity of work”. He points out that “growing swathes of our economies could become uninsurable”, and points to the the IPCC’s analysis that the biggest impact is likely to be climate refugees: as many as 200 million people forced to migrate each year by 2050.

He understands we have limited carbon budgets. Because much of our carbon dioxide emissions stay in the atmosphere for centuries, past emissions matter just as much as current and future emissions. Simply put, the rise in global temperature is proportional to our total emissions over time—our cumulative emissions. So for any specific temperature target, such as the UN’s goal of staying below 2°C, or the more stringent 1.5°C limit included in the Paris Agreement, there is a fixed limit on how much carbon we can burn. Carney uses the IPCC’s numbers: for example, to stay within the 1.5°C limit in the Paris agreement we can emit no more than 400 gigatons of CO2. Ever. At the current rate this will be used up by the early 2030s. The consequences are staggering. As Carney points out, to meet the Paris 1.5°C limit, 80% of current fossil fuel reserves will need to stay in the ground, and global carbon emissions will have to fall by around 8% every year for decades. And Carney acknowledges the scale of this challenge: they only fell by 7% in the height of the COVID lockdown, and then rebounded almost immediately.

Carney also understands carbon-lock in. The things we have already built will use up the remaining carbon budget before they reach the end of their useful lives. So we cannot afford to build more: “If the committed emissions of all the machines over their useful lives will largely exhaust the 1.5°C budget, going forward we will need almost all new machines, like cars, to be zero carbon, and to scrap any new ones that are not before the end of their useful lives.”

And as a banker, he worries about the risk of stranded assets. He understands the physical risk from the effects of extreme weather, sea level rise and mass extinction. But he also identifies a second risk: transition risk. Things that we built and things we valued in the past may become worthless. Investments in fossil fuel exploration, extraction, and oil-fuelled transport will be pointless: “Many carbon-intensive, long-duration assets are vulnerable to stranding, including power stations that generate electricity from fossil fuels; heavy industrial assets, such as steel mills or petrochemical plants; and pipelines”. Yes, pipelines—it’s there in black and white in his book.

Carney understands the role of international trade. He points out that Europe and North America have flattened the curve of their rising carbon emissions largely by shifting to a service economy, and leaving the heavy manufacturing to Asia. He writes that in the west, we’re large-scale importers of emissions that we don’t count as ours—the emissions from manufacturing and shipping the goods we import are blamed on countries like China. And the oil from Canada’s tar sands, piped to the coast for export, won’t be counted as Canada’s emissions either. Those emissions will be blamed on the countries that buy Canada’s oil.

Having assessed the problem, Carney devotes another chapter of his book to the solutions. As an economist and banker, he understandably focusses on the role of finance, summarizing how banks, investors, and insurance companies are already creating the frameworks needed for the transition to net-zero. But he recognizes it requires a whole-economy transition: “every company, every bank, every insurer, every investor” needs to play a part, and he describes his own efforts to ensure that every economic decision will take climate change into account. He’s also clear that the transition to a net-zero economy comes with many upsides, describing it as an enormous opportunity, a massive investment in clean infrastructure after decades of underinvestment; creating millions of well-paid jobs at at time when unemployment is soaring.

Carney’s recognizes that none of this investment will happen without “effective, predictable and credible public policies”. He identifies carbon pricing as a critical element to this, but acknowledges that carbon pricing alone isn’t enough. And he knows that carbon prices themselves need to be done properly: “To support an effective, orderly and fair adjustment, carbon prices should increase in a gradual and predictable manner, and they should be designed equitably”. He’s also clear on the importance of setting both long-term and short-term goals, and having clear and transparent metrics to assess progress towards them. Nowhere in his book does he say it will be okay to suspend climate policies at the whim of Alberta’s oil industry, or indeed to please any other constituency.

The Mark Carney that wrote the book “Value(s)” does not appear to be the same Mark Carney now running Canada. Has he given up his belief that the majority of fossil fuel reserves cannot be used, and instead swallowed the long-standing lie from the oil industry that carbon capture and storage will allow us to keep pumping the oil? Is he suspending greenwashing rules so that the evidence he laid out in the book can be ignored? Is he now okay that the bitumen carried in his proposed pipeline will be for the export market, making the emissions from it someone else’s responsibility? Towards the end of his chapters on climate change, he perhaps points out an answer to these questions, when he describes the failure of political leaders: Climate change is a “tragedy of the horizon”— the benefits of bold climate policy won’t be felt until after future elections, but the action needs to happen today. Perhaps Mark Carney the politician has fallen into the trap he himself predicted.