Carbon pricing should not be called `tax'

Economists support the concept because it fights climate change

To a shockingly high degree, thousands of economists across the political spectrum love the carbon tax.

In fact, it's one of the few taxes virtually every economist globally supports, as seen in a recent open letter signed by more than 3,300 economists, including Nobel Prize winners.

Why are so are many voters at odds with the economists they frequently turn to for expert insight?

The current political context hasn't helped.

In Canada, Prime Minister Justin Trudeau has defended his party's support of the “carbon tax” by admitting that his job “isn't to be popular.”

Accuracy and optics don't often make good bedfellows in politics.

He's been widely excoriated for this comment.

While the idea of a “carbon tax” isn't sitting well for many voters, we need to see beyond the pain at the gas pump.

Amid the contentious rhetoric, it's crucial to recognize the essential effect that carbon-pricing mechanisms have on combating climate change. And, appealing to economists and citizens alike, they can grow the economy, while also ensuring basic principles of equity and fairness.

The “social cost of carbon” is a way to estimate the costs associated with the effects of climate change, such as extreme weather events like wildfires or floods, on our society due to carbon emissions from fossil fuels.

Canada's federal government estimates this to be $266 per tonne of carbon dioxide for 2024, increasing every year.

Research suggests the median global social cost of carbon is much higher — about $400 per tonne. How can society shoulder these substantial costs?

The gap between paying for carbon and cutting down on the dangers of carbon emissions is holding us back from truly confronting the consequences of our actions. Every choice we make, whether on our own or together, affects carbon emissions.

If cleaner transportation options were cheaper than fossil fuel-based ones, for instance, lots of people would switch over to cleaner options without a second thought. But these changes don't happen overnight, and we're right in the middle of this messy transition as a society.

We're proposing two simple strategies to improve public understanding and acceptance of carbon pricing.

Don't call it a tax: This is where we need to start. Words matter, as they contain cultural meanings that link to people's beliefs and values.

The term “tax” is used as a political wedge between Conservative and Liberal parties and their constituents. So, let's pivot off the word tax and stick with carbon pricing. This holds different levels of polluters accountable for their carbon emissions and encourages society to adopt cleaner practices.

Plus, it's not actually a tax. It's pricing based on carbon value. Carbon has a price that we all must pay to be part of society — much like roads or emergency services. How carbon is priced and valued should be an ongoing dialogue.

Let's talk more about how it's a good investment: Carbon pricing reduces other costs for society. One of the primary advantages of pricing carbon is how it reduces carbon emissions now and in the future.

Revenue from carbon pricing supports renewable projects, resilience efforts, and green jobs — all while ensuring that the most vulnerable in society are not disproportionately affected. This ensures a fair transition to a low-carbon economy. It drives companies to prioritize sustainability and creates a tangible incentive to adopt greener practices.

As sustainability researchers at the University of British Columbia, we understand and can empathize with why the public might be resisting the idea of a “carbon tax.” And yet, pricing carbon is what makes society responsible for increased emissions and ultimately saves everyone.

Let's not allow political posturing to delay this critical dialogue.

Can we be inspired by the overwhelming agreement by economists on the need to price the value of carbon?

Regardless of political affiliation, we can work together and create meaningful action for a sustainable economic and environmental future of our planet.

Joel Krupa is a post-doctoral researcher in environmental economics at the University of British Columbia. Derek Gladwin is a professor of sustainability education at UBC. Naoko Ellis is a professor of sustainability and chemical engineering at UBC.