Don’t fall for politicians who promise action on climate change at no cost

By Medicine Hat News Opinon on January 7, 2019.

Conservative Leader Andrew Scheer obviously thinks he’s got hold of a winner in his campaign against the Trudeau government’s plan to put a price on carbon. The new year was just a few hours old when Scheer turned up in a discount store in Regina railing against the Liberal “carbon tax” that he says will make “everyday essentials” more expensive.

Maybe Scheer is right. Maybe Canadians, or at least enough of them to swing an election, will balk at the idea of paying a bit more to fight climate change — even if, as the Liberals’ plan proposes, they get almost all of it back as a tax rebate.

Who knows how the issue will play in this year’s long pre-election and election campaigns, and what other issues might emerge to eclipse it? For the moment, though, it’s clear the very idea of carbon pricing is under assault across the country, with a national front (so to speak) of conservative leaders lining up to oppose it.

From Scheer to Doug Ford to (quite likely) Jason Kenney after Alberta’s spring election, they’re betting Canadians don’t much care about what will happen to the global climate decades down the road, or care only to the extent that it doesn’t actually cost them anything to avoid the worst.

By another, more cynical, interpretation, they’re betting that however much voters care, they’d rather politicians just deal with it without reminding them at every turn how much it’s going to cost to save the planet.

Because, let’s be clear, any climate scheme that those opposed to carbon pricing put forward must inevitably come with built-in costs of its own, at least if it’s going to be at all effective.

The alternative to carbon pricing is some combination of regulations requiring consumers and companies to burn less fossil fuels, like oil and gas, along with subsidies and tax credits to encourage them to do the same. Both impose costs on the economy, costs that in the end will be passed on to ordinary Canadians.

Some of these direct measures can be very effective in cutting greenhouse gas emissions, the key to mitigating climate change. The Ontario Liberal government’s decision to phase out the province’s coal-fired electricity plants was a prime example. But as hydro ratepayers know, the costs involved played a big part in driving up their bills. The gains didn’t come free, in other words.

We had a taste of how this works when the Ford government delivered its climate plan in early December. Aside from free-riding on the big gains the province made under the Liberals, it will eventually require big industrial emitters to meet a yet-undefined reduction standard. What will the cost of that be? And who will ultimately pay? Hint: it’s you, along with all your fellow consumers and taxpayers.

Scheer himself has yet to put forward a climate plan of his own. When he eventually does, he will no doubt make much of the fact that it doesn’t include a carbon price, or “tax.”

But if it’s worth anything (and Scheer promises his plan will include “meaningful reductions” in carbon emissions), it will have to require industry and consumers to change their behaviour, and that will come along with its own costs. The difference is they’ll likely be hidden and hard to calculate, and likely wrapped in rhetoric about making “big business” rather than “ordinary Canadians” carry the freight.

At the same time, the Conservatives’ critique of carbon pricing has become increasingly incoherent.

On the one hand, they say, the Liberal plan is a tax grab. On the other, since 90 per cent of what’s collected by Ottawa will be rebated back to taxpayers and most will actually come out ahead, it amounts to “bribing people with their own money.” Again, on the one hand a levy of $20 a tonne to start is an onerous “tax on everything.” At the same time, they insist, it’s a paltry amount that won’t cut GHG emissions nearly enough. As the old joke goes, the food here is terrible — and such small portions!

Amid all this politicking and confusion, the advantages of carbon pricing continue to stand out.

It has the great advantage — as well as the great political difficulty — of being open and transparent. Government puts a price on carbon emissions, usually modest at the beginning with predictable increases to follow, and it’s up to consumers and business to figure out the best way to deal with it.

That might mean consuming less, either by using less fuel or investing in conservation. Or it might mean emitting less greenhouse gases, perhaps by operating more efficiently. Governments don’t dictate behaviour, but they put incentives in place that encourage the behaviour they want — in this case lowering carbon output.

It makes eminent sense, which is why economists of all political stripes tend to favour this route. And it explains why industry, in the form of the Canadian Business Council and the oil industry itself, favour an effective, predictable carbon price. Far from being what Doug Ford derides as a “job-killing carbon tax,” they know it’s the best way to guide the economy toward the long-term goal of a greener, sustainable future.

Still, that’s just economics and common sense. Politics is something else, and it’s in the political arena that all this will be hashed out in 2019. That’s inevitable, but some stubborn facts can’t be avoided: climate change must be tackled, and one way or another that will come with costs we all must pay.

— Toronto Star

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