Carbon tax fundamentally flawed
To make a difference, they need to be so big most people won’t tolerate them
Canada’s Ecofiscal Commission released a report on carbon pricing last week along with survey results from polling firm Abacus Data gauging Canadians’ support for fighting climate change.
Most Canadians believe climate change is real and caused by human activity. Most think governments should take “action” to combat it. And most of them don’t know much about carbon prices.
The last point might be the most surprising finding. The survey notes less than half of Canadians are familiar with the concept of carbon taxes, and that this figure hasn’t really changed much in three years. This means the debate is, according to the Ecofiscal Commission, still an “elitelevel discussion.” Perhaps more worrying for supporters of carbon taxes is that more Canadians ranked many other issues, including health care, jobs, cost of living and tax cuts as higher priorities.
Ironically, for a report and survey that show many Canadians don’t seem to know about or understand carbon pricing, at no point in the 142-page survey do they ask Canadians about any specific prices. If you want to know how people feel about prices, give them a price to consider. After all, if someone offers you a new car, your decision would be different if the price is free, versus $40,000.
Asking Canadians something as simple as “would you be willing to pay $10 more for a tank of gas?” or “would you be willing to have the cost of groceries rise by 30 per cent?” would go a long way to illuminating what kind of “action” Canadians want governments to take.
Of course, carbon-tax proponents deliberately avoid doing this for the same reason they prefer to use the term “carbon pricing” instead of calling it by a far more understandable term: a carbon tax. When you frame it this way, it’s actually very simple to explain: Carbon taxes try to reduce carbon emissions by making things more expensive. The more expensive something is, in theory, the less people will buy of it. Higher gas
prices mean people can afford to buy less gas, so they will want to drive less. Carbon taxes are a deliberate attempt to force lifestyle changes through cost increases.
Most taxes are primarily designed to raise revenue for government. But carbon taxes are different. Making things more expensive to change people’s behaviour is not a side effect. It is the main purpose. From a political standpoint, telling people this is problematic. Indeed, the Abacus survey shows fully 75 per cent of people believe any plan to reduce emissions must not “drive up the cost of living too much.” So people support “action” — so long as it doesn’t cost too much.
This is a headache for carbon tax advocates, since the smaller the tax, the lower the potential emissions reduction. This is why leading carbon tax proponents such as Environment Minister Catherine McKenna have been stymied by the most basic
questions about the impact of carbon taxes, and instead fall back on meaningless bromides like “the economy and the environment go hand in hand.”
Abacus’ Bruce Anderson notes that most Canadians tend to “embrace the centre” and seek “consensus and compromise.” But that’s precisely the problem with carbon taxes: smaller ones will satisfy no one because they are not big enough to change behaviour. If anything, they will anger both supporters and opponents, the former for failing to raise them high enough to reduce emissions, and the latter for proving right fears that they’re just another tax hike.
Carbon-tax advocates need to go big or go home. They can either admit to Canadians that slashing carbon emissions will be expensive, difficult and painful, and all the sacrifice could well be for nothing if other countries aren’t doing the same. Or they should just admit this is nothing more than a plan for filling up government coffers.
It’s actually very simple to explain: Carbon taxes try to reduce carbon emissions by making things more expensive.
Aaron Wudrick is national director for the Canadian Taxpayers Federation.