Why a car­bon tax alone can­not move the nee­dle on cli­mate change

The Peterborough Examiner - - OPINION - Thomas Walkom Thomas Walkom is a Toronto-based colum­nist cov­er­ing pol­i­tics. Twit­ter: @tomwalkom

In Canada, the cli­mate change de­bate has fo­cused on Ot­tawa’s at­tempts to impose car­bon taxes.

Pro­po­nents of these taxes, such as the fed­eral Lib­eral govern­ment, say that only a price on car­bon can ad­e­quately re­duce the green­house gas emissions re­spon­si­ble for global warm­ing. Op­po­nents, such as On­tario Premier Doug Ford, counter that car­bon taxes can never work.

But in a new book, Simon Fraser Univer­sity economist Mark Jac­card says both sides are wrong. In the­ory, he writes in “The Ci­ti­zen’s Guide to Cli­mate Suc­cess: Over­com­ing Myths that Hin­der Progress,” car­bon pric­ing should work. In prac­tice, how­ever, it doesn’t — for the sim­ple rea­son that in the real world of pol­i­tics it is too dif­fi­cult to de­liver.

“The car­bon tax is, from an eco­nomic ef­fi­ciency perspectiv­e, the per­fect pol­icy,” he writes, “which is why a lot of peo­ple, es­pe­cially econ­o­mists, keep say­ing we must price car­bon emissions.

“But this state­ment is fac­tu­ally in­cor­rect. … In the real world of pol­i­tics and pol­icy, the se­lec­tion of (emis­sion-re­duc­ing) poli­cies in­volves a trade-off be­tween cost-ef­fec­tive­ness and the like­li­hood of im­ple­men­ta­tion. Sin­gle-mind­edly pur­sue car­bon pric­ing and we could end up with noth­ing.”

The rea­son, says Jac­card, is that both sides of the cli­mate de­bate are caught up in myths. The myths of those who deny cli­mate change are well-known — that global warm­ing is un­re­lated to hu­man be­hav­iour and that sci­en­tists who warn of the dan­gers posed by such warm­ing are part of a vast con­spir­acy of rad­i­cal en­vi­ron­men­tal­ists.

But those who be­lieve, like Jac­card, that cli­mate change does pose a global risk, of­ten have their own myths as well.

One is that en­ergy ef­fi­ciency is prof­itable — that the cost of en­ergy-ef­fi­cient ap­pli­ances and build­ings will be more than com­pen­sated for by, say, re­duced hy­dro bills. Un­for­tu­nately, says Jac­card, the ev­i­dence shows this is rarely true.

An­other myth, he writes, is that in­di­vid­u­als can con­tinue to in­dulge in en­ergy in­ten­sive be­hav­iour with­out harm­ing the world, as long as they buy enough so-called off­sets to reach a state of car­bon neu­tral­ity.

A third myth is the be­lief that re­new­able en­ergy sources, such as so­lar and wind power, are al­ready cheaper than fos­sil fu­els. They are not, he writes, which is why de­vel­op­ing coun­tries re­main so de­ter­mined to use car­bon-rich fu­els like coal.

The prob­lem with these kinds of myths, he writes, is that they fos­ter the view that mar­ket forces alone can solve the cli­mate change cri­sis.

But it is Jac­card’s ac­count of the 2009 Bri­tish Columbia elec­tion cam­paign that is most telling. That was the elec­tion fought just af­ter then Lib­eral premier Gor­don Camp­bell had brought in a rev­enue-neu­tral car­bon tax.

To economist Jac­card, the tax was a no-brainer: it would dis­cour­age car­bon-in­ten­sive be­hav­iour with­out re­duc­ing eco­nomic growth. But to his sur­prise, Camp­bell’s po­lit­i­cal op­po­nents — led by the provin­cial New Democrats — man­aged to con­vince many vot­ers that this was noth­ing but a tax grab.

The anti-car­bon tax cam­paign, Jac­card writes, was char­ac­ter­ized by bla­tant lies and mis­truths. But peo­ple bought it any­way. In the end, he ar­gues, Camp­bell was saved only by the global re­ces­sion. Think­ing that Camp­bell could han­dle the eco­nomic cri­sis bet­ter than his NDP op­po­nents, Bri­tish Columbians over­came their dis­taste for the car­bon tax and voted him back into of­fice.

For Jac­card, the 2009 B.C. elec­tion cam­paign served as a bru­tal re­minder of the po­lit­i­cal dif­fi­culty in sell­ing any kind of car­bon tax, no matter how vir­tu­ous, to vot­ers. He ar­gues that reg­u­la­tion of emissions, while ul­ti­mately more costly than car­bon pric­ing, would be po­lit­i­cally more suc­cess­ful.

Given that some econ­o­mists cal­cu­late that the fed­eral car­bon tax would have to rise from $20 a tonne now to $210 a tonne by 2030 in or­der for Canada to meet its emis­sion re­duc­tion tar­gets Jac­card may be right.

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