Is shifting to a carbon tax smart policy, or just politics?

The new Progressive Conservative election platform is dressed for success — ambitious and accessible. Also brimming with flash and cash to attract attention.

Unlike past platforms, it is as much progressive as conservative: If Patrick Brown becomes premier, he’ll cut taxes for middle-class and lowincome earners. (Down with trickledown economics!)

Where is the money coming from? From us.

To avoid blowing the budget, a PC government would bankroll tax cuts by relying on the cash flow from a new carbon tax that is ultimately rebated right back to taxpayers. In other words, a “revenue neutral” tax shift.

At root, the Tory plan is to change the Liberal climate change plan: Brown would replace a complex cap-and-trade regime with a simpler carbon tax.

It may prove to be smart politics, but is it wise public policy? Simplicity has its costs and benefits.

If you drive a car or heat a home, the straight PC tax would cost far more for fuel than the current Liberal plan. That’s bad news when you fill up at the pump (albeit good news for environmentalists if it deters drivers).

The bigger good news is that the money raised from all that carbon consumption in years to come will be rebated through those lower taxes (and child-care rebates). However, that’s bad news for environmentalists who were counting on the magnificent multi-billion bounty of carbon revenues being reinvested — not rebated — to reduce greenhouse gases with programs such as energy retrofits for aging highrises, rapid transit lines and bike lanes.

Brown doesn’t buy into those carbon-reducing investments, dismissing them as a “Liberal Cap-andTrade Slush Fund.” Hence his shift from slush fund to (tax) refunds.

How much more (or less) the PC plan would reduce global warming over time remains a hotly debated point. Suffice to say it’s complicated.

Unless you are blessed with X-ray vision, the Liberals’ current cap and trade plan can seem impenetrable: The government puts a price on carbon, forcing companies to buy and “trade” pollution allowances among themselves (and across borders) to comply with the “cap” on CO2 emissions — hence the clunky “cap and trade” term.

A better way to describe Ontario’s current policy is “cap and invest” — because it lowers the “cap” on carbon emissions, while repurposing the revenues to “invest” in other green measures that go even further. In that sense, it does double duty by both taxing carbon and reinvesting in carbon abatement.

Both systems are good for the environment, and immensely better than nothing. Considering that their party wouldn’t even talk about carbon pricing a few years ago (nor would Brown broach the idea), this counts as progress for the Progressive Conservatives.

You might call it Brown’s very own “green shift” — an echo of the infamous Green Shift proposed by then-Liberal leader Stéphane Dion for his controversial carbon tax a decade ago. Back then, Brown served as a backbencher in the federal government of then-PM Stephen Harper, whose party denounced the revenue-neutral Green Shift as a naked tax grab.

Oh, and behind Dion’s plan back then was his brainy chief of staff, Andrew Bevan — who now happens to hold the same position for Liberal Premier Kathleen Wynne at Queen’s Park. Today, Bevan has moved on from the Green Shift he helped author to the cap-and-trade option he helped design for the provincial government.

And so the shoe has shifted to the other foot for both Brown and Bevan. Who was right then, and who’s wrong now?

Both sides have their numbers and projections. But the most relevant question might be whether it’s truly worth the trouble of shifting from the current cap-and-trade system to a decade-old carbon tax at this stage of the game?

Put another way, is this the best way to fight climate change, or is it merely change for change’s sake — the best way to fight an election by differentiating the Tory platform from Liberal government policy?

When I put that question to Ontario’s independent Environmental Commissioner, Dianne Saxe, she stressed her non-partisan role precludes her from commenting on rival party platforms. Speaking conceptually, however, she noted that a carbon tax will undoubtedly “have a much higher impact on both consumer bills and business bills . . . but I agree with you people don’t understand it well.”

Cap-and-trade allows for more flexibility and efficiency in Ontario’s mixed economy, allowing for smoother transitions and trade-offs for roughly similar outcomes (over time) with less overall disruption, she told me.

“The takeaway is that . . . the net economic cost is less with the capand-trade system,” which is why most countries, notably China, are choosing it over the more dated carbon tax.

More to the point, no one else has tried to replace cap and trade with a carbon tax in an economy such as ours.

“I did check to see whether it had been done anywhere successfully in the world, and I am told no one has tried it,” Saxe said.

Watch the Tories try. Martin Regg Cohn’s political column appears Tuesday, Thursday and Saturday. mcohn@thestar.ca, Twitter: @reggcohn

How much more (or less) the PC plan would reduce global warming over time remains a hotly debated point. Suffice to say it’s complicated