National Post (National Edition)
Carbon, cover-ups and costs
For 12 exciting hours last week, Parliamentary business was held up by a Conservative procedural tactic forcing a vote on every one of 200 items in the Main Estimates. The marathon voting session was in protest at the Liberal government’s failure to release detailed projections of the cost to Canadian households of pricing emissions of carbon dioxide and other greenhouse gases. Or, as the Tories like to call it, the “carbon tax cover-up.”
More information is generally preferred to less, of course, at least if one is a democrat. On the other hand, most governments aren’t democrats, and prefer that the public have rather less information than more, especially about so complex and volatile a subject as charging people for things they have been accustomed not to being charged for until now. Conservatives have had great fun waving about a heavily-redacted copy of an internal memo entitled “impact of a carbon price on households’ consumption costs,” as if to suggest a certain reluctance to share this data with the public.
No doubt this is the case. But the assumption underlying Conservative charges of “cover-up” would appear to be that this information is available only to the federal government — as if it and it alone had the ability to calculate the impact of carbon pricing on the final costs of the goods and services Canadian households typically buy. If the federal government does not issue an official report on the matter, the rest of us cannot possibly have any clue.
Why might this be? Perhaps only the federal government knows how much carbon dioxide is emitted by burning different fossil fuels? Or how much of these fuels go into the production of different goods and services? Or how much Canadians consume of each good or service? Or how much tax would be levied on each tonne of emissions?
But no, all this information is publicly available. Moreover, there appears to be no shortage of people trained in calculating the resulting price impact — economists, I believe they are called — some of whom are employed outside of the federal government.
The economist Jennifer Winter of the University of Calgary, for example, has estimated these would run from $600-$700 (in British Columbia, Ontario and Quebec) to $1,000-$1,100 (in Alberta, Saskatchewan and Nova Scotia) per household per year, based on the $50-per-tonne tax mandated under the federal plan by 2022. The economists Trevor Tombe, also of the University of Calgary, and Nic Rivers, of the University of Ottawa, have made similar calculations.
At a nationwide average of about $750 per household, we’re talking roughly 1.2 per cent of average Canadian household spending. These, it should be said, are almost certainly over-estimates. They assume no change in consumer behaviour: prices for certain energy-intensive goods and services go up, and people just go on consuming exactly the same amount as before. That’s unlikely. Indeed, the whole point of pricing carbon is to induce changes in behaviour.
Of course, economists have also calculated that a $50-atonne tax would not induce enough behavioural change to meet the target, to which both the Liberals and the Conservatives have committed the country, of a 30-percent reduction in GHG emissions (from 2005 levels) by 2030: $100 a tonne would be more like it. So double Winter’s estimates. You’d still be looking at two to 2.5 per cent of household spending, when fully phased in.
Well, no: that’s the gross impact, before any offsetting government tax cuts and transfers to low-income households. If you truly wanted to know how much the carbon tax would cost Canadian households, you’d surely have to factor these in. How much are these likely to be? Nobody knows: it will depend on the provinces, since the feds have largely left it up to them. Most of them haven’t said what they would do (the federal law doesn’t kick in until next year) and even if they did, they may not be around to implement it — as Kathleen Wynne, for ex- ample, can attest.
Estimating the cost of carbon pricing to Canadian households, then, involves a mix of information, e.g. on carbon emissions, that is available to everyone, and information, e.g. about offsetting provincial rebates, that nobody knows. As neither is the exclusive preserve of the federal government, there is no reason to attach any special importance to a figure just because it came out on federal letterhead. Except, of course, from the standpoint of politics. Tell people how much more they will pay out of pocket and you instantly become the target for their wrath. That’s why the Liberals don’t want to put a number out. And that’s why the Conservatives insist they must.
But carbon pricing is only one strategy for reducing Canada’s GHG emissions. The Conservatives, we are told, have another approach, or will by the time of the next election, a “very detailed and comprehensive plan” that will meet our international commitments. Very well: how much would the Conservative plan cost Canadian households?
On this, there is no data, anywhere, for the simple reason that the Conservatives haven’t said Thing 1 about what their approach would be — other than that it would not involve carbon pricing. Possibly this is because the known alternatives, generally involving regulations or subsidies of some kind, are all estimated to cost many times as much as a carbon tax, per tonne of emissions reduced. Or possibly there is some other reason. As things stand, who can tell?
Surely a party so devoted to full disclosure will not withhold this important information from the voting public? Or are the Conservatives merely engaged in an anti-carbon-tax cover-up?