Carbon pricing is hard on the head

For many of us, 2019 promises to be hard on the head.

By April Fools’ Day, a price on carbon will have arrived everywhere in the land and for the majority of Canadians, blissfully ignorant as to what that means, the bliss will be disrupted.

Politicians from the two dominant tribes have already staked out opposing positions on carbon pricing and plan to make it a central issue in the federal election that will come sometime in the next 11 months.

So even if you manage to avoid elucidation when carbon pricing is a fact in your little patch of the north, you’ll have trouble eluding the political parties’ competing takes on how much it’s costing you, the economic fallout, and whether it’s an effective tool to combat climate change.

Both brands of Conservative – the one that jettisoned the apparently contradictory “progressive” modifier and the one that kept it for sentimental or ironic effect – call it the carbon tax, even when it isn’t.

It isn’t a tax in Nova Scotia, where the government hatched a cap-and-trade scheme and convinced Ottawa it meets the requirements of the federal program, although it will reduce carbon emissions in the province by only one per cent. Provincial conservation, energy efficiency and conversion programs that predate carbon pricing will reduce emissions by more than double that amount over the four years – 2019 to 2022 – covered in the first phase of the federal plan.

It will be a tax in New Brunswick, where the provincial government didn’t establish its own pricing regime. So in New Brunswick, like Ontario, Manitoba and Saskatchewan, Ottawa will impose its own carbon prices.

The cost of all forms of energy are expected to increase in New Brunswick by considerably more than they will in neighbouring provinces, but New Brunswick taxpayers will get fat rebate cheques to offset the higher prices they’ll pay at the gas pumps, on home heating oil and for power.

Prime Minister Justin Trudeau says his government will return every penny it takes from the good folks of the four provinces that declined to put a price on carbon. Provinces had until the year’s end to come up with a pricing program that met the federal requirements or face Ottawa’s prices.

Newfoundland and Labrador and Prince Edward Island were the latest provinces to cut deals with the federal government. Fuel prices will increase marginally in both provinces and most major carbon emitters will pay the federal prices.

Generally, it is preferable to fight an election in opposition to a tax than in support of one, but this may turn out to be the exception that proves that rule.

Three quarters of Canadians believe climate change should be a government priority, and 60 per cent want governments to do more than they do now to address the problem.

Last year, a survey of 2,250 Canadians by Abacus Data discovered that, despite widespread uncertainty over exactly how carbon pricing works, more than a third of Canadians said they’d be more inclined to vote for a candidate who supports a price on carbon, while a quarter would favour a candidate who opposes carbon pricing. The remainder said candidates’ positions on carbon pricing wouldn’t affect their vote.

The Liberals don’t need to convince Canadians that action is required to combat climate change, but they have some work to do to sell their complex carbon pricing plan as the right action.

The Liberals say they’re putting a price on pollution, which they are. But, in virtually the same breath, they boast about returning every dime raised to the people, businesses and institutions that wind up paying after the polluters pass the price on.

So where exactly, in this cycle of recirculated cash, is the benefit to the environment?

We are reliably informed, by economists and other experts, that under the carbon pricing regime there is an incentive for polluters to reduce emissions and for consumers to reduce carbon consumption because both behaviours result in savings, regardless of how the federal government distributes the proceeds from its carbon price.

The national price on carbon is $20 per tonne beginning next year, and increases by $10 each year to 2022, when the price will be $50 per tonne.

For the architects of the national carbon price – Justin Trudeau’s Liberals – re-election may well depend on their ability to sell their multifarious plan to Canadians as a meaningful response to global warming.