Asked whether the government was considering a special tax on energy consumption, as some environmentalists have urged, the minister responded "I suppose in the long run it may be a measure that may need some consideration sometime down the road depending on the progress that can be made by all other possible means." That's seven qualifiers, by my count, and only after Goodale had explicitly ruled out a carbon tax, the oil-patch's particular bete noire. Nonetheless, that was enough for Alberta Environment Minister Ty Lund to denounce the minister's comments as "shocking ... very worrisome." From there Lund had no difficulty in raising the spectre of another National Energy Program ("It sure scares me the minute they start talking about energy taxes. That smells very much about the National Energy Program."), before going on to the inevitable mutterings about secession, with which everyone seems to adorn their complaints these days. "If you think Quebec is a problem," Lund recalled telling a Liberal cabinet minister, "just keep shoving things down Albertans throats that they don't like." Welcome to Canada, where even the fate of the planet is subsumed in federal-provincial turf wars. If you want to know why, six weeks before delegates from 150 nations gather in Kyoto, Japan to negotiate binding targets for curbing greenhouse gas emissions, Canada has yet to propose either a credible emissions target or a strategy for achieving it -- the only major industrialized country to remain silent thus far -- look no further than "wild rose country." Indeed, Lund says Alberta would refuse to implement the terms of any treaty it did not like, whatever solemn undertakings Ottawa might have given the rest of the world.

Let's just dispense with that NEP analogy, right off the top. The NEP, a byzantine mix of price controls, exploration incentives and punitive excise taxes was a foolish, destructive policy, child of the Trudeau Liberals' belief in $100 oil and their own omnipotence in the face of international market forces. But it was wrong because it was wrong for Canada, not because of what it did to the oil industry. It was not wrong because it happened to transfer wealth from Alberta to Central Canada; it was wrong because that was its only purpose, to the detriment of the country's ability to adapt to a changing global energy market.

Every shift in economic policy will have some incidental distributional effects, and some of these will be measurable in regional terms. The test is not whether some redistribution occurs, but whether it is likely to lead to higher incomes in general, out of which the "winners" may compensate the "losers." In the case of a carbon tax, or whatever instrument Ottawa chooses to induce producers and consumers to burn less fossil fuels, the winners are all of humanity -- if you buy the global warming thesis. But whether or not you are persuaded by the scientific evidence, the issue must be decided on its merits, as a matter of national and international policy, not on the abacus of regional interest.

It's unlikely we will be looking at a simple tax-based strategy, in any event.

All of the caveats that critics, within the oil industry and without, have sought to attach to the Kyoto agreement -- that Canada should get a special dispensation in light of its cold climate and abundant spaces; that due recognition should be paid, in calculating how far to reduce emissions, to efficiencies already achieved; that each country's industries should get credit for reductions achieved in export markets; and that not just developed, but the rapidly growing developing countries should be covered by the agreement -- all point in the direction outlined by U.S. President Bill Clinton the other day: towards a global system of tradeable emissions permits.

Rather than leave governments to set the "price" on emissions, as under a carbon or energy tax, a system of tradeable emissions permits lets the market set the price, using information on costs and benefits from those most directly affected. While governments set an overall target for emissions reduction, individual firms, industries and countries may buy or sell the right to pollute, above or below their assigned quota. A firm that found it especially costly to keep its greenhouse gas emissions within its quota might buy some extra credits from another firm. The latter firm might find it so easy to reduce emissions, and the market for its unused credits so lucrative, as to make much deeper reductions than were legally required.

But before we can get to the matter of choosing the right instrument to reduce emissions, it is still necessary to decide what amount of reductions is required. And before we can do that, the government of Canada will have to come out of hiding, and declare its negotiating position -- whatever the government of Alberta may think about it.