Here’s how to make carbon pricing honest
Here are some questions for Canada’s political leaders. If Prime Minister Justin Trudeau and premiers like Ontario’s Kathleen Wynne and Alberta’s Rachel Notley believe humanity faces an imminent, existential threat from man-made climate change, what does that have to do with increasing government revenues?
If their goal is to reduce industrial greenhouse gas emissions, why is their solution making Canadians poorer through a carbon tax, or cap and trade, a carbon tax by another name?
What makes them think they know how to lower emissions by picking economic winners and losers through public subsidies to big business, subsidies funded by the billions of dollars their carbon pricing schemes are extracting from Canadians?
Finally, since they’re imposing carbon pricing, why don’t they do it in the most honest, transparent and effective way, called carbon fee and dividend? Here’s how it works: Governments, through their existing tax agencies, set and collect a gradually increasing carbon fee on all fossil fuels at their first point of sale.
All of the money is then returned to Canadians monthly, as equal dividend payments, with half payments for children younger than 18, to a maximum of two children a family. (The auditor general could police this to confirm governments aren’t skimming.)
All government subsidies to industry are eliminated under carbon fee and dividend, since all the money goes back to taxpayers.
Based on average consumption, 60 per cent of Canadian households would receive a higher dividend cheque than they pay in carbon fees ( because their consumption is below average). Along with all Canadians, they then make their own consumer choices about how to save more money by buying more energy-efficient, and thus less expensive, goods and services.
Thus, businesses are driven by the marketplace, not subsidies, to lower their emissions through technological innovation, to produce less expensive products and achieve greater market share.
A study prepared for Citizens’ Climate Lobby predicts carbon fee and dividend would reduce emissions by 50 per cent below 1990 levels within two decades — far beyond what our governments are claiming— while creating hundreds of thousands of jobs.
So why aren’t politicians (save for the Green Party) interested? Because carbon fee and dividend reduce emissions; it doesn’t increase government revenues.