LITTLE RATIONALE FOR CAP-AND-TRADE SCHEME

YOU CAN’T HELP BUT notice higher prices at the pumps, in large part due to the province’s new cap-and-trade scheme coming into effect to start the year. You’ll soon see the impact on your home heating costs, too.

It’s the latest cash grab from the profligate Kathleen Wynne.

We’re suffering the effects of climate change, so we have to do something, right? With cap-and-trade, the provincial government is doing something, right? So what’s the problem?

Well, cap-and-trade is a weak way to curb emissions. It’s wide open to abuse. A direct carbon tax, applied to everything, makes more sense in this context. The bigger problem? Ontarians don’t trust Kathleen Wynne to do what’s right given a record of corruption and incompetence. We simply assume that the scheme will do nothing to change emissions while her government squanders the money buying votes and lining the pockets of friends and supporters. It’s a pretty safe assumption. Wynne’s disingenuousness is not lost on many Ontarians – her approval rating is sinking towards single digits – and that extends to the cap-and-trade scheme itself. It’s a money grab, pure and simple. Otherwise, why not go for a broadly applied carbon tax, with reductions in income and other taxes to make the program revenue neutral? It’s only a coincidence that the province will rake in as much as $2 billion – Wynne is admitting nothing, deflecting requests for details and providing Ontarians with zero answers to go with the zero benefits – to spend/waste as it sees fit, right?

Critics have noted the complex cap-and-trade scheme simply make it look like emissions are going lower without actually doing much environmental good. At the end of the day, the main beneficiary is the provincial treasury.

So, the scheme has the trappings of government action, but without any results. And we’re all poorer for it, both immediately due to taxes and in the long run because we’ll still be on the hook for massive remediation costs related to climate change.

A straightforward carbon taxes helps ensure the polluters (which is all of us, to varying degrees) pay for their impact on the environment. Greenhouse gas emissions have always simply been externalities – transferring to society the costs of production while the profits go to individuals and companies – but if we’re going to change the system, we’re going to have to take aim at that practice. In this case, perhaps all the money from a carbon tax should go into a contingency fund to cover the growing expenses attributed to climate change. That fund should be out of the direct control of the government. Simply deposited into provincial coffers, it will be misspent, stolen and wasted on expenditures of no public value.

Cap-and-trade systems are rife with abuses, particularly with exemptions and free credits for political pet projects and favoured industries, further reducing the program’s effectiveness and boosting the cost to others.

The more broadly applied, the more effective the tax. It serves little purpose to exempt the largest polluters if you want to reduce emissions. If you simply want window dressing, however ...

An effective policy – i.e. real attempt at reducing emissions through tax measures – would be removed from political tampering. Instead, we’re to get just the opposite. So, along with the tampering, we’re sure to get the same kind of ineffectiveness and corruption that have become the norm.