National Post (National Edition)
Coming first is the goal, but right now the focus for the contenders is how to turn second- or third-place into victory. Plus, Andrew Coyne on candidate climate policies and why they may change.
Up to now in the Conservative leadership race, voters interested in the climatechange issue have had three choices.
There is Michael Chong, who proposes to scrap a number of existing subsidy and regulation programs in favour of a federal carbon tax, the revenues from which would be used to slash personal and corporate income taxes, by 10 per cent and five per cent respectively.
There is Brad Trost, who believes that climate change is not an issue and therefore proposes to do nothing. Like Chong, he would scrap existing climate-change programs. Unlike Chong, he would put nothing in their place.
And there is the rest of the field. Like Chong, they believe climate change is a serious problem. Like Trost, they propose to do nothing about it — or not yet, or not more than the Americans do, or nothing beyond those existing programs, many brought in under the Conservatives, the sum effect of which, 10 years and billions of dollars later, is to leave us about as far from our 2030 target for carbon emissions as when they started.
All are, however, adamantly opposed to a carbon tax — any carbon tax, whether Chong’s or Justin Trudeau’s. Several have vowed to repeal the latter, though it a) does not yet exist, b) would only apply in provinces that refuse to implement one of their own, and c) would return no revenues to the federal government, but only to the governments of the provinces in which it is collected.
But none have said much about doing away with existing subsidy and regulation programs. For that matter, neither have the Liberals. For all their frequently stated belief in “pricing carbon” as the cheapest way to reduce emissions, the Grits do not believe in the principle quite enough to apply it. The carbon taxes they have demanded the provinces impose, which for the most part are the existing provincial taxes they have agreed to accept, are not in place of existing, costlier programs, as under Chong’s plan, but in addition to them.
Indeed, hardly had they announced the carbon tax when they began layering still new regulatory and subsidy programs on top, such as the recently announced ban on coal. How do they justify this? A carbon price, to achieve the desired reduction in carbon emissions on its own, would have to be “too high.” But whatever that allegedly exorbitant carbon price would be, the evidence shows it would be less — much less — than the cost of the programs it would replace or avert. And unlike those programs, a carbon tax would yield revenues that could be used to cut other taxes.
What the Liberals mean is that the cost of a carbon tax would be visible, while the cost of the alternatives would be invisible — which is to say that while the latter course would be more costly economically, it would be less costly politically. Perhaps that means it would be more likely to be implemented. But it does not follow that therefore it should be the one adopted.
We should be guided, rather, by two principles. First, there are costs to every alternative — including doing nothing. Second, we should, all else being equal, do the least costly thing — including doing nothing.
The costs of doing nothing are not, as sometimes suggested, the destruction of the planet. That might (or might not) be the cost if no country did anything, but as Canada contributes just 1.6 per cent of global emissions it is certainly not the cost of our own inaction: whatever we do or not do will make next to no difference to the planet.
The cost, rather, would be the international odium we would face as a free-rider on other countries’ efforts, and possibly whatever penalties we might suffer as a result.
Whatever action we take, then, should cost less than that. While that’s hard to assess, the lower the cost of any proposed course, the greater the likelihood of it passing the test. Which argues strongly in favour of Chong’s plan, or something like it. All other plans, except for Trost’s, are costlier, and no other plan, including Trost’s, gets us any closer to our targets.
And again, even Trost’s plan — if that is the word — would not provide for the kind of deep income-tax cuts that Chong’s would.
As I say, that was the state of play until lately. But now a new alternative has been added to the mix, with the release of Erin O’Toole’s environmental plan.
There is, it should be said, not much to it. Rather than tax consumers and producers on their carbon emissions, O’Toole would pay companies to reduce them, in the form of some kind of tax cut (“a 10-, 15and 20-year corporate tax reduction schedule”). How much emissions reductions would be required to earn what sort of tax cut is left blank, as is much else about the plan, but it would seem exposed to the same objections as any other subsidy.
One is limited coverage: it would only reward some companies (“the largest emitters”) for cutting emissions in certain approved ways, notably “without any large production or employment decreases.” The other is leakage: companies will in many cases be paid to do things they would have done anyway. As written, it’s hard to see it getting us anywhere near the kinds of reductions to which we have committed.
Still, it’s a plan, at least. O’Toole is clearly aiming to lure Chong voters his way, if not as their first choice than as their second and subsequent choices. The logjam is broken. With three months yet to go in the campaign, there may be more moves to come.
O’TOOLE IS CLEARLY AIMING TO LURE CHONG VOTERS.