This article is an updated revision of our March 2025 analysis, ‘Climate advocate Mark Carney becomes Canada’s next Prime Minister after 2025 Liberal race victory’.
Mark Carney, the former Governor of the Bank of England and the United Nations (UN) Special Envoy for Climate Action and Finance, has retained the premiership following the Liberal Party’s victory in the 2025 Canadian federal election.
Faced with an escalating trade war with US President Donald Trump, Carney has shifted course on key climate policies to stabilise Canada’s economy.
As Canadians prepare to vote in the 2025 federal election, Carney’s green credentials—once a defining feature of his political rise—have been tempered by economic realpolitik.
Carney’s action plan during his brief stint as Canada prime minister
After Justin Trudeau‘s resignation, Carney won a landslide victory as the leader of the Liberal Party of Canada on March 9, 2025, thus becoming the next Prime Minister of Canada.
Snap election
Once sworn in as prime minister, Carney moved swiftly to announce a snap general election.
It was due to be held before the 21st of October 2025, but he surprised many by calling it this quickly.
Especially in light of the Liberal Party, Carney was significantly behind the Conservatives in the polls.
The polls reacted positively to Carney’s leadership
The over 15% deficit the Liberal Party had on the Conservatives led by Pierre Poilievre quickly turned around once the former Governor of the Bank of England was installed as prime minister.
On the 6th of January 2025 average polling put The Conservatives at 41% and the Liberal Party on 20%
On the 5th of March, it had stabilised slightly to just a 9% deficit with the Conservatives at 40% but the Liberal Party at 31%.
But over the course of the next month, an incredible sprint by Carney and the party not only reduced the deficit but pulled ahead with the Liberal Party at 44% and the Conservatives at 37.
2025 climate and economic realpolitik
Carney was faced with having to focus on two things: stabilising Canada, responding to Trump’s policy aggression towards Canada, and fronting a re-election campaign.
Climate woes
While many in the climate community would hope for a more vigorous climate agenda than the one under Trudeau, this was not what they immediately saw from Carney.
Axing the groundbreaking carbon tax programme
One of Carney’s first actions as prime minister was to shelve the groundbreaking carbon tax scheme enacted by Trudeau.
Explaining his rationale, Carney called the scheme too unpopular and divisive.
It is possible that Carney axing the carbon tax scheme have contributed for him turning around the polling numbers for the Liberal Party.
Carney and his advisers would likely have identified that the Conservatives had used this as a political football, and they felt they had no choice.
Talking up fossil fuels and minerals
Carney’s positive mention of fossil fuels and minerals as a strength for Canada’s economy as a response to Trump is unlikely to have pleased climate advocates.
In campaign speeches, he highlighted the “critical role” of oil, gas, and mining in securing Canada’s economic future.
He pledged to boost mineral extraction (especially lithium and cobalt) to support clean tech supply chains. However, there would have been concerns that he shared few details on environmental safeguards.
Green groups raised red flags that the United Nations (UN) Special Envoy for Climate Action and Finance labelled oil and gas production expansion as ‘responsible growth’.
Trump’s trade war reshapes Canada’s economic strategy
Many analysts would point to the fact that, faced with US-imposed trade tariffs and threats of annexing Canada, Carney has had little choice but to adopt this policy.
Economic pressure forces Carney’s climate pivot
Fossil fuels and minerals drive Canada’s economic survival
The tariffs imposed by the Trump Administration significantly target Canada’s fossil-fuel-based energy and mineral sectors, which play a core and crucial role in the country’s economy.
Therefore, Carney was likely left with little choice but to embrace and further support those sectors.
Carney trying to strike the right balance
Though his embrace of those high-emission sectors does not mean he has given up on advancing clean energy, green tech, nature and biodiversity protection.
In his campaign speeches, he also advocated for clean energy and protected the beauty of Canada’s nature.
The Liberal Party vs the Conservatives – the climate perspective
When the now former prime minister Justin Trudeau came into power in 2015, he broke with the policies of the Conservatives, who under prime minister Stephen Harper had adopted a climate denial approach.
Trudeau came into power on the back of an ambitious and progressive pro-climate action agenda.
Poilievre vs Carney
Poilievre, Carney’s main opponent in the 2025 Canadian election, is not standing on an anti-climate platform.
Though his agenda is significantly more high-emission focused than Carney’s.
Poilievre wants to review all the pipelines cancelled by the government and repeal the Oil Tanker Moratorium Act, which was signed into law in 2019.
The moratorium regulates vessels that transport crude or persistent oil to or from ports or marine installations along British Columbia’s north coast.
Poilievre’s main solution to climate change involves carbon capture and storage (CCS).
Carney’s pragmatic approach to climate action
While it is undeniable that action on climate change will not be Carney’s number one priority, if he wins today’s election.
Climate pragmatists and realists would point to the fact that Carney had to make the policies move he did to put himself in a position to retain the prime ministerial leadership.
And that a victory for the Conservatives would represent less action on this pivotal issue than with the government being led by the Liberal Party.
Carney to stay the course on climate action after re-election
Carney a strong believer in institutions, and would want Canada to play a critical and strong role on climate action on the global stage such as the COP30 climate summit at the end of 2025, especially as the US has departed from leadership.
Carney to advocate for the economic benefits of climate action
He strongly advocates and promotes ambitious climate policies, economic opportunities and growth prospects. Analysts and commentators suggest that his finance background makes him a market-driven climate advocate rather than an environmentalist.
His governing will likely be based on a market approach, favouring financial incentives and corporate responsibility rather than outright bans or government intervention.
Policies the Carney government could take up
- Incremental climate reforms but under a much softer, market-led model
- Looking at the kind of climate policies Carney is likely to unveil, he has hinted and expressed support for the following:
- Advance and set new CCS targets to transition fossil fuel phaseout
- Set up a mixed public-private $100B fund to accelerate clean energy investments
- Set up a framework to expand nuclear generating capacity
- Market-based incentives for public transport
- Incentivise the private sector to reduce plastic consumption
- Use economic measures to protect indigenous land and communities
- Integrate climate finance rules in global trade
Climate concerns
However, some will caution against this approach, as Carney will be more cautious and not implement it at the speed the science demands.
The prevailing argument is that climate targets should be substantial regardless of whether the economy is strong or weak at the given time.
There are also concerns that Carney would still support continued investments in tar sands. In 2021, Greenpeace analysis found that after Carney joined Brookfield Asset Management as a vice chair in 2020, it had invested billions of dollars in fossil fuel projects, including a coal port and an oil sands pipeline.
Weathering the Trump storm
From a market perspective, Carney is led by stability and is unlikely to do anything that rocks the boat. Right now, he would make any moves that would weaken Canada’s oil and gas and fossil fuel infrastructure sectors.
But as an economist who views climate action as an economic opportunity rather than a burden, understanding the massive potential for ambitious policies.
He would certainly not do anything to weaken the power of clean industries; on the contrary, he would do quite the opposite.
The stakes in today’s election could not be higher for Canada and the world. Across the globe, this election will be watched with increased interest compared to the previous Canadian federal election.
Editorial Note: This article was originally published before the 2025 Canadian federal election and has since been updated to reflect Mark Carney and the Liberal Party’s election victory.
Anders Lorenzen is the founding Editor of A greener life, a greener world.
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Categories: Analysis, Anders Lorenzen, Canada, economy, International Politics, policy
