Doug Ford, Scott Moe, Jason Kenney, and Andrew Scheer are right—a carbon tax is not the way to seriously cut emissions. Why? It’s politically and economically untenable for a carbon tax to go as high as it needs to go.
How high does it need to go? The international Carbon Pricing Leadership Coalition (yes, Ontario and Alberta are members, along with British Columbia and a who’s-who of Canadian blue-chip business, as well as governments, NGOs, and businesses across the globe) convened a high-level commission in 2017, led by economists Nobel laureate Joseph Stiglitz and Lord Nicholas Stern, whose key conclusion was this: “Meeting the world’s agreed climate goals in the most cost-effective way while fostering growth requires countries to set a strong carbon price, with the goal of reaching $40-to-$80 per tonne of CO2 by 2020 and $50-to-$100 per tonne by 2030.”
Those would be big-daddy U.S. dollars. Contrast that with the piddly $18 baby Canadian dollars per tonne in the cap and trade market, which may have lost the election for the previous Ontario government. But that government thought it was a good idea to keep the revenue to spend on whatever green thing it wanted.
The government doesn’t need to keep the money for a carbon price to do its work in pricing fossil fuels out of the market. That’s an optional extra (though keeping the money constrains the tax to be ineffectually low).
“It’s not a tax if the government doesn’t keep the money,” said George Shultz, Republican elder statesmen, hardly a leftist eco-nut, but, with his pal Ronald Reagan, one of the architects of the Montreal Protocol, which came along just in time to preserve the ozone layer, which surely earned him enviro-cred to add to his conservative credentials.
And what are our Conservatives planning? Regulations and incentives (a.k.a. subsidies) were mentioned. What’s Conservative about that? Don’t they know ordinary guys like me realize regulations and subsidies create implicit costs for taxpayers? For that matter, what’s Conservative about letting one sector (fossil fuels) get away with freely dumping its waste products, thereby transferring costs and damages to society—socialization of pollution. Where’s the rugged individualism of being financially responsible for one’s own garbage?
There is a simple solution: carbon fee and dividend. It’s not a tax because all the revenue is returned to citizens in the form of dividends, which offsets the increased costs of everything, protects the poor and keeps the economy well lubricated.
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