Alberta Politics
A screenshot of a scene from the recent riots in Paris, caught on Youtube by the Street Politics channel.

Seriously, what’s the good of an effective carbon tax if it’s politically impossible to implement?

Posted on December 05, 2018, 1:29 am
10 mins

Recent political developments in France and Alberta, though quite different in tone, suggest carbon taxes may not be a viable way to address climate change – leastways, not without reaching an unlikely consensus they must be imposed.

You may not believe me yet, but you can count on it, politicians on the right, left and centre are all paying attention to the problems encountered by carbon taxes and their advocates.

Alberta Premier Rachel Notley (Photo: David J. Climenhaga).

I hate to say it, too, because I do believe the academic economists who keep telling us that carbon taxes are the most cost-effective way to limit carbon outputs in a market economy. But it is also true that academics live in the proverbial ivory tower when it comes to the politics of the street, and carbon taxes are a vivid example of this phenomenon.

So I’m starting to believe the problem is that carbon taxes are simply no longer politically viable, if they ever were, and so we will have to move on and find other ways if we are to save the planet.

Some of those ways may involve markets too, and they will likely be considerably more brutal to Albertans than the effect of building social licence by imposing a carbon tax would have been. If this turns out to be so, don’t expect too much sympathy when we complain about it.

Of course, carbon taxes and cap-and-trade schemes like the successful one pushed into law by Republican President George H.W. Bush in 1990, are an invention of the right, with its ideological faith that the market is the solution to everything. Except, of course, when it isn’t, as in the case of low-quality heavy crude that fails to fetch a price high enough to sustain extraction operations.

French President Emmanuel Macron (Photo: Kremlin.ru).

But as has been noted in this space before, carbon taxes have become the Obamacare of Canada, a market-fundamentalist idea cynically abandoned by the right once it had been adopted by centre-left parties. Meanwhile, in the same time frame, climate-change denial became a core doctrine of both U.S. Republicans and the Conservative Party of Canada, as well as various CPC provincial chapters.

So, to France and its roiling Yellow Vest protests, so reminiscent of 1968 …

You can’t blame French working people for going into the streets to protest rising fuel prices. After all, the structure of the society they live in requires significant fuel expenditures to live and work by those not wealthy enough to reside in the hearts of the country’s great cities.

But what right-wing anti-carbon-tax agitators in Canada seem to have missed, or wilfully ignored, as they gleefully threaten Prime Minister Justin Trudeau and his Liberal Government with the same violence here is that the French street protests of the past few days are about much more than one unpopular tax.

In fact, the complaints of the yellow-jacketed protesters encompass the entire traditional left-wing indictment of the neoliberal austerity program the Canadian right advocates – creeping privatization of health care, weakened trade unions, pension cuts, skyrocketing post-secondary tuition, less secure jobs, class-based exams, lousy wages, tax-avoidance schemes for the wealthy, and all the rest.

Canadian Prime Minister Justin Trudeau (Photo: David J. Climenhaga).

As radical former British Parliamentarian George Galloway observed in a TV interview, “this is a revolt against austerity, a revolt of people who did not do the crime, and don’t want to do the time!”

Moreover, the French now in the streets, Mr. Galloway warned, “are not ‘cheese-eating surrender monkeys,’” as they were portrayed by Americans when they didn’t enthusiastically embrace Junior Bush’s 2003 Iraq invasion. That much should be obvious by watching video of the riots.

So the irresponsible Canadian anti-tax Astro-Turfers now advocating the French riposte to Canada’s modest carbon taxes should brace themselves for the full-meal deal if their agitation for violence pans out. They may find it a dish not entirely to their taste.

Still, it has been duly noted, high taxes and high costs for essentials – be they bread in 1789 or petrol in 2018 – are clearly shown by history to be an excellent way to get the working classes into the streets, call them sans-culottes or gilets jaunes, and not just in France.

The Alberta experience is milder, mainly because the NDP’s carbon tax is so much less onerous than the one French President Emmanuel Macron has now been compelled by the masses to drop.

Indeed, the carbon levy imposed by Premier Rachel Notley’s NDP Government is so small it is doubtful it can have a meaningful effect. It’s insignificant enough that Alberta’s conservative politicians must lie with abandon about how much it will cost in order to get their base riled up.

Former British Parliamentarian George Galloway (Photo: David J. Climenhaga).

But this only shows that whatever the efficacy of carbon taxes might be as a policy tool if only they could be imposed, carbon levies that are highly transparent (which they must be to work) are not a viable policy tool even when they are set too low to have meaningful effect.

So defending carbon tax regimes by saying they would work if they were allowed to work is like saying there would be no need for police or welfare if we could all just be persuaded to share and share alike. It ain’t gonna happen!

Promising tax rebate cheques in a year’s time, by the way, is a small comfort if you can’t afford to give your kids supper tonight – or even if you just fear you might not be able to because some now reformed “green conservative” is lying to you about it. It’s the wealthy, not the poor, who make sure they’ve filed their tax paperwork every year.

Whether the reaction in Canada will be enough to get Mr. Trudeau or Ms. Notley to change course remains to be seen. I imagine strategists from both parties are carefully examining the auguries right now.

The result in France, as the Wall Street Journal explained it, is that the riots have given President Macron “the first major setback in his push to overhaul the French economy.” (Emphasis added.)

As usual, the international business press only wants to tell part of the story. Mr. Macron has certainly sacrificed his green tax on fuel. There is little doubt he has done so to save the rest of his planned program of neoliberal depredation. That is why the protests may well continue, and even grow, well past Canada’s supposed tax watchdogs’ comfort zone.

Well, Vive la France!

If the Canadian right has achieved anything with its bait-and-switch tactic on carbon taxes, I expect it is that politicians elected in regions of the country where there is a high level of concern about the fate of the environment will simply forget about trying accommodate the wishes of voters in resource dependent, Conservative-voting regions like Alberta.

They may well say: No social licence? No problem. No pipelines!

As the impacts of climate change become more obvious, voters in afflicted regions will commit themselves fully to policies that block pipelines and attempt consciously to turn Alberta’s oilsands into a truly stranded asset until the clock runs out on the age of fossil fuel.

18 Comments to: Seriously, what’s the good of an effective carbon tax if it’s politically impossible to implement?

  1. Farmer Brian

    December 5th, 2018

    I get the impression reading your article that you feel Macron’s tax in diesel was quite significant and our Premier’s tax is not. In doing a bit of reading it turns out Macron’s new tax is 4 euro cents per litre or the equivilent of 6 Canadian cents per litre. The price of diesel in France was roughly $2.25 CAD a litre, it had already risen 23% this year due to increased oil prices before the new tax was to be added. In Alberta we pay at present a carbon tax of 8.03 cents per litre of diesel, a carbon tax 33% higher than the one proposed by Macron in France!

    If I remember correctly most economists support a revenue neutral carbon tax. A tax that when enacted is coupled with equivilent reductions in personal and corporate taxes, therefore taxing something you don’t want, C02 emissions and lowering taxes on something you do want income. BC is the only province in Canada that came close to this model, one that has been abandoned by the new NDP government which is raising both carbon and corporate taxes.

    I do agree with you one point, that carbon taxes are a very difficult sell. Look at Alberta, it is 3 years since Rachel Notley imposed the carbon tax and still 60% of Albertans do not support it. From my standpoint my concerns are many. Justin Trudeau’s plan calls for a carbon tax of $50 by 2022, which is 13.38 cents per litre of diesel. Anybody who believes he will stop at $50 a tonne is dreaming. Most research I have read on this topic suggests a carbon tax of $150-200 a tonne is necessary to change people’s habits or choices. Imagine that would be 53.53 cents per litre of diesel or $10 per gigajoule of natural gas! Catherine McKenna said the other day “Canada will be ready to set tougher emissions-cutting plans when the Paris climate change agreement kicks in by the end of 2020.” My personal outlook is that unless all countries implement a carbon tax, companies will just move to lower taxed jurisdictions(carbon leakage). There is also no doubt in my mind that the end result will be a lower level of disposable income, I think most voters believe this and that is why carbon taxes are a hard sell. Justin Trudeau’s plan to return more money back than they pay in carbon taxes to 80% of those in the provinces where he will be imposing the federal tax certainly in my mind reduces the incentive for change. Enjoy your day.

    Reply
    • Geoffrey Pounder

      December 5th, 2018

      Farmer Brian wrote: “Justin Trudeau’s plan to return more money back than they pay in carbon taxes to 80% of those in the provinces where he will be imposing the federal tax certainly in my mind reduces the incentive for change.”

      Carbon taxes without rebates are regressive.
      The idea of a carbon tax is to change behavior, not impoverish the population.
      Rebates don’t weaken the incentive to reduce emissions. The less energy you use, the more $$$ left in your pocket.

      Carbon pricing must be global to be effective. Global problems require global solutions.
      In the meantime, to address the issue of emissions “leakage” to other jurisdictions, nations can apply carbon taxes to imports:

      “When it comes to taxing carbon, Canada has it exactly backward”
      “…a group of U.S. Republican elders speaking for the Climate Leadership Council, incl George Shultz and James Baker III (each a former U.S. Secretary of State and former Treasury Secretary), presented a plan to efficiently fight climate change. They proposed that the U.S. adopt a ‘border carbon adjustment’ (BCA)…
      “… Imports from [countries without a carbon tax] would face an entry tax in order to level the playing field with goods and services produced and sold domestically.
      “… It is thought that America’s trading partners would surely want to impose their local carbon tax rather than having the tax revenues benefit the U.S. Treasury, thus encouraging the rapid adoption of carbon taxes globally.
      ” In order to succeed, the carbon tax system of any country must dovetail with the carbon system of its trading partners. To do otherwise will create loopholes which will encourage circumvention.”
      http://business.financialpost.com/news/energy/when-it-comes-to-taxing-carbon-canada-has-it-exactly-backward

      Reply
    • Bill Malcolm

      December 5th, 2018

      Your reading on France must have been of the lightest possible variety. It was announced in September last year that diesel in particular would be more heavily taxed than gasoline in future to eventually even the price. That first increase was about 9 cents a litre. This year the tax has increased 34% again. The four cents of the recent increase is just the latest in a series. Dwarfs the proposed carbon tax here. There must be a Conservative Department of (Mis)information to help the faithful get it wrong, trying to spin a line of utter twaddle by deliberately omitting known facts, Which load of old rope, you, sir, have swallowed whole. And attempted to spatter over readers as mendacious “truths”. Too bad I know better.

      In addition, another idiotic Macron move, not much reported, that goes along with the latest French fuel tax increase, is as cunning a neoliberal plot as I have seen. Rural road speed limits have been reduced, forcing people onto the toll highways to get to work on time or change their lifestyle. It is accepted that the real protests against Macron come from rural drivers, because not only do they have to drive more slowly, they have to pay more to do it. That is enraging!

      Macron is of course, utterly useless. He and Morneau could switch positions and nobody would notice the difference – they’re textbook theorists who regard themselves as exceptionally good fellows, only doing what’s best as they and their captains of industry undoubtedly know it. Neoliberal without realizing it, right down to their footwear, secure in their aristocratic attitudes. Born with a silver spoon in their mouths and with no experience of real work (Kenney has managed even less), one glibly speaks of job churn for the proles, while the other decided that his countrymen’s vacations were too long, and that they were paid too much to compete with Asia, so he’d change all that and give them a swift kick in the rear for encouragement.

      The French tend to get a touch annoyed with idiots, and riot. In Canada no one but the elderly seem to get bothered about being screwed and merely accept nonsense at face value. In fact, Conservatives are brainwashed like Republicans in the US – “why yes, lower taxes on the rich is one hell of a great idea; that’ll get the economy moving. I support shooting myself in the foot! And anyone who thinks differently must be anti-free market!” With brainpower like this and false pride in their autonomously vigorous individual selves, never seeking help, but standing on their own two flat feet beholden to nobody, you have to wonder if there are any more than a couple of neurons firing in the vacuum between their ears. Social issues are of zero import to them.

      I see precious little difference between the Cons and Liberals in this country. The Conservatives bray BS in favour of business and draining the pockets of the plebs to enrichen the elite by charging for everything while the Liberals never say as much, but sneakily do it anyway. Then you’ve got Notley, and words fail me. A social democrat she’s not. Another Blairite, who once in power rather liked the gig, so is determined to keep it any way she can. Albertans thus get fed utter tosh from every side. That’s modern life – fake.

      Reply
      • Farmer Brian

        December 6th, 2018

        Bill, it certainly appears you are correct on the level of the tax on diesel in France. I usually read David’s blog in the morning as I eat breakfast and in this case I was certainly guilty of not doing adequate research. I am kind of curious though how lowering speed limits to force drivers on to toll roads is a neoliberal plot? Isn’t a neoliberal interest in free markets? How is forcing drivers on to toll roads to increase government revenue related to free markets? Seems just the oposite to me! Enjoy your day.

        Reply
  2. Jim

    December 5th, 2018

    What is the real objective of a carbon tax? What is the result of restricting the fuel to allow freedom of movement to only the very rich? What is the goal, as you have done above, of equating anyone that even hints at questioning that all global warming is due humans burning fossil fuels to Holocaust deniers?

    As for France who knew that a Rothschild banker who married his teacher wouldn’t be in touch with the common man?

    Reply
  3. Mike

    December 5th, 2018

    David,
    I sure hope we quickly squash the term “Social Licence”; it does not exist. We have seen how the NDP stood behind that term, ramed it down our throats, but obviously it means nothing to the rest of the world or even Canada for that matter. What does exist is the market system. I will buy my goods where they are the least expensive and easiest to obtain.

    My apologies for going off on a tangent, but Brian Topp set-up our carbon tax here in Alberta, which has done nothing, and now he’s on the “special envoy” to work with the energy industry to find solutions to close the oil-price differential. Wow. Obviously, Rachel really doesn’t want to be premier anymore.

    Reply
  4. Sam Gunsch

    December 5th, 2018

    EXCERPT: ‘The findings of 2016 studies of 16 carbon price countries and two Canadian provinces indicated the carbon emission intensity and energy use affected by the price of carbon is less than one per cent. ‘

    Paul Griffin, Distinguished Professor of Management, University of California, Davis

    https://theconversation.com/taxing-carbon-may-sound-like-a-good-idea-but-does-it-work-104871
    ====================

    EXCERPT: Carbon taxes and caps may be most effective in economic theory, but smart regulation will produce better climate policy for our political reality.

    Mark Jaccard is a professor of sustainable energy in the School of Resource and Environmental Management at Simon Fraser University.

    http://policyoptions.irpp.org/magazines/february-2016/want-an-effective-climatepolicy-heed-the-evidence/

    Reply
    • Geoffrey Pounder

      December 5th, 2018

      I understand Jaccard’s reservations about carbon pricing, but there can be no real solution to any of our environmental problems without full-cost accounting. A price on pollution is essential. A dollar value on ecosystem services likewise.
      Unless we price goods and services properly, “cheaper” unsustainable options shall prevail. As long as we externalize environmental and health costs, we subsidize our own destruction.
      The speed at which we shift away from fossil fuels and take other steps towards sustainability largely depends on economic signals. An economic system that permits/ignores/rewards damage to our biosphere is insane.

      Yes, industry resists carbon pricing. Industry also resists regulation. It’s not one or the other. We need to do both.
      In Canada, the industry has effectively captured regulatory agencies and govts. Canada is behind the U.S. in limiting refinery pollution because our industry is even more successful at obstructing, watering down, and delaying govt regulations. CAPP successfully lobbied the Trudeau govt to delay regulations on reducing methane emissions.

      David Suzuki on James Hansen, former NASA climate scientist and carbon pricing:

      “One of the world’s best-known climate scientists is discouraged that almost 40 years of study and warnings haven’t convinced humanity to adequately address the climate crisis. But James Hansen understands why we’ve stalled.
      “As long as fossil fuels seem to be the cheapest energy to the public, they’ll keep using them. We’re up against an industry that would prefer to just continue to do things the way that they have been because they’re making a lot of money.” His solution: Ensure the price of fossil fuels factors in the costs to society.
      “How do we ensure the price of fossil fuels includes the costs of pollution, environmental degradation and climate disruption? The simplest way, as Hansen and most scientists, economists and energy experts know, is to put a price on carbon emissions. University of Alberta economist Andrew Leach says, “A carbon price leverages the power of the market to enable emissions reductions at the lowest possible cost.
      “…Pricing carbon, through a carbon tax or cap-and-trade system, has proven to be effective. Sweden implemented a carbon tax in 1991. Even though the price has risen steadily — from about C$37 per tonne of CO2 in 1991 to $170 in 2018 — the country’s carbon dioxide emissions have decreased by 26 per cent, without negatively affecting the economy, even as the population grew. In other Scandinavian countries, carbon pricing is seen as a sensible solution that rarely generates debate or news coverage. It works, as at least 46 countries with carbon pricing policies are learning.
      “…Hansen believes a price on carbon might save civilization, giving new meaning to the expression, “Taxes are what we pay for a civilized society.” As more people understand the urgency of confronting climate change and the effectiveness of carbon pricing, they’ll find many reasons to get behind it.
      http://rabble.ca/blogs/bloggers/david-suzuki/2018/06/carbon-pricing-important-tool-tackle-climate-change

      Reply
  5. Sam Gunsch

    December 5th, 2018

    https://ricochet.media/en/2354/carbon-price-politics-an-ongoing-tragicomedy-in-canada

    EXCERPT: ‘“We’re not climate deniers; we’re climate tax deniers,” retorted Jason Kenney, leader of Alberta’s United Conservative Party, in reply to Premier Rachel Notley’s suggestion that the UCP evolve from its history of climate change denial.’

    Ricochet writes about the the laughable efforts by current conservative political leaders like Kenney to run away from
    market solution dogma and get out from under the leadership of Preston Manning’s endorsements of carbon taxes.

    EXCERPT: ‘The reason that Conservatives are scrambling to find a convincing, feasible alternative to carbon pricing is this: carbon pricing already is a right-wing, conservative approach. And to be on the right and reject a perfectly right-wing solution is to let it slip, like Jason Kenney and co., that you’ve checked out of the most important conversation humanity has ever needed to have, and that you have no business being in government at a time like this.’

    Reply
  6. Sam Gunsch

    December 5th, 2018

    excerpt Nikiforuk… today: ‘Texas is replaying the Alberta experience. Overproduction of light shale oil and gas in the Permian Basin in Texas has choked up pipelines and refineries and thereby lowered prices for West Texas Intermediate, much to the dismay of shale oil drillers.’
    ===================

    AB has had lots of advice that our excessive dependence on oil/gas/oilsands makes our economy more vulnerable to outside factors. The 2011 report by Premier Stelmach’s Premier’s Council On Economic Strategy, strongly flagged the economic dangers of continued reliance on unrefined exports and the needs to broad AB economy in other sectors.

    https://open.alberta.ca/publications/report-of-the-premiers-council-for-economic-strategy

    The increasing volatility of the global oil price is disrupting oil economies, not just Alberta’s. 30% overall price decline since October.

    Even if one assumes that AB’s carbon tax/Climate Leadership Plan had convinced BC to put their marine ecosystems and tourism economic at more risk for Albertan’s oilsands industry, there are plenty of analyses that show a) the price obtained selling to Asian refineries would not be materially different than selling to the USA refineries (see #’s by Robyn Allan, Ross Belot ) b) dramatic production increases in USA via fracking would still likely undercut our tough to refine oilsands bitumen.

    We’ve been warned repeatedly. And The LEAP folks urging Canada’s oil provinces to make plans for a just transition for workers in the petro-industry into other sectors, were preceded by blue-chip councils of business CEO’s and Bank of Canada governors.

    But… here we are… more today on oil volatility from Nikiforuk.

    If we don’t start a just transition soon, then in the medium to long term, we risk an economic crash, maybe as soon as the next 5-10 years by doubling down on AB’s petro-sector.

    https://thetyee.ca/Analysis/2018/12/05/Oil-Wild-Price-Swings/

    EXCERPT: The reality is that the dramatic 30-per-cent drop in oil prices since the beginning of October, from more than US$70 to US$50, is upsetting oil exporters, producers and markets around the world.

    Different kinds of oil fetch different prices, based on their quality and transportation costs. And all are experiencing dramatic price drops. Alberta’s bitumen, a cheap refinery feedstock, is not the only crude languishing during a global market glut.

    Refineries in Japan and Korea, for example, scooped up cheap U.S. oil earlier this year.

    Texas is replaying the Alberta experience. Overproduction of light shale oil and gas in the Permian Basin in Texas has choked up pipelines and refineries and thereby lowered prices for West Texas Intermediate, much to the dismay of shale oil drillers.

    Reply
  7. Geoffrey Pounder

    December 5th, 2018

    “Progressive” politicians have done a great deal to undermine carbon policy. (Pt I)

    First, they have failed to underline that climate change impacts, fossil fuel pollution, and ecological degradation imply real costs. One way or another, those costs will be paid. Someone somewhere sometime has to pay.
    Who should pay them? Why, by those who produce, profit from, consume, and derive the benefit from fuels.
    Using the sky as a free dump is a massive subsidy.
    Carbon pricing simply internalizes those externalities, so that the user/consumer pays the actual costs of the energy they use.

    How can free market advocates possibly argue against pricing goods and services (including energy) properly? Why should we not pay the full costs of the energy we use?
    Downloading these costs to the public purse, the environment, and future generations is immoral. Voodoo economics.
    As David Climenhaga has famously said, climate change is the greatest market failure in history. The subversion sans pareil of the free market.

    How could global energy transformation take place without pricing energy properly?
    Put the real, true, full price on emissions, pollution, habitat destruction, etc. The flow of capital will shift rapidly. Energy markets will be transformed. Fail to put the full price on emissions, and the problem will never be solved.

    Reply
  8. Geoffrey Pounder

    December 5th, 2018

    “Progressive” politicians have done a great deal to undermine carbon policy. (Pt II)

    First, by not only funding and subsidizing fossil fuel projects, but also by actually making carbon taxes contingent upon new fossil fuel projects like pipelines.
    AB’s tiny carbon tax is a fig leaf — a cynical quid pro quo in exchange for new pipelines. Hopelessly contradictory policy.

    Notley: “The Trans Mountain pipeline expansion must break ground for Alberta to meet federal climate goals.”
    Notley: “Moving forward with additional hikes with the carbon levy will depend on the Trans Mountain pipeline, as I’ve said many times over the last year and a half.”
    Notley: “We will not move forward on the federal govt’s proposals until we see that construction is fully underway and that approval is given meaning. There is no question that the two were always connected, and they will stay connected.”
    “Government house leader Brian Mason said the carbon tax was always intended as a tool to force the federal government to support building a pipeline to tidewater.”
    “Meeting federal carbon tax price relies on Trans Mountain breaking ground, says Alberta premier”
    • edmontonjournal.com/news/politics/alberta-opposition-to-introduce-bill-on-carbon-tax-referendum

    Notley further undermined NDP credibility on climate by hinging her support for a federal carbon tax in exchange for pipelines.
    Notley subsequently pulled her support for a national “floor price” on carbon after the Federal Court ruling on TMX.
    “Climate leader” Rachel Notley: “Until the federal government gets its act together, Alberta is pulling out of the federal climate plan. And let’s be clear, without Alberta, that plan isn’t worth the paper it’s written on.”
    As Notley and other premiers previously pointed out, Ottawa DOESN’T NEED the provinces’ permission to enact a national price on carbon.
    http://www.nationalobserver.com/2018/06/18/news/albertas-rachel-notley-expects-have-some-interesting-conversations-ontarios-doug

    The AB Govt recently announced more than $2.3 billion in subsidies to AB’s oil & gas industry to cut methane emissions. Including an industry exemption from carbon levy costs for the next 5 years. Drillers also get an exemption plus retroactive rebates.
    AB Govt: “To help industry through this transition, the government is providing more than $2.3 billion in assistance, including exempting them from carbon levy costs for the next five years. This will save companies an estimated $2 billion, which they can use to focus on methane reductions.”
    http://www.alberta.ca/release.cfm?xID=55828C212C369-BDCB-0802-F1B7D21F8054EE6C
    “Premier Rachel Notley unveils carbon tax break for drilling companies”
    https://calgaryherald.com/business/energy/premier-rachel-notley-unveils-carbon-tax-break-for-drilling-companies

    Trudeau has been doing his own carbon tax shuffle, setting high thresholds on which big emitters are taxed:
    “Carbon taxes on Canadian coal-fired power plants to affect only some of their emissions”
    https://edmontonjournal.com/pmn/news-pmn/canada-news-pmn/carbon-taxes-on-coal-fired-power-plants-to-affect-only-some-of-their-emissions/wcm/89a6461a-b1e6-493b-bc10-49d07e69a0c3
    “The cleanest coal plants, despite being much much dirtier than gas, and much, much, much dirtier than renewables, will only pay the equivalent of $1 per tonne.
    https://www.cbc.ca/news/opinion/federal-carbon-pricing-1.4905481

    As Andrew Coyne argues, carbon taxes set too low merely annoy and give credence to claims that it’s simply a revenue grab.

    Trudeau’s and Notley’s contradictory, on-again off-again, carbon policies signal to the world that even “progressive” govts in Canada and AB don’t take climate change seriously.

    Reply
  9. Sub-Boreal

    December 5th, 2018

    Excellent analysis, David! You make several obvious points which seem to have eluded the wonks, alas.

    One more detail adds to the history of how carbon taxes became as popular as plutonium popsicles: how about the lazy, fake populist “axe the tax” campaign of the BC NDP a decade ago? When Gordon Campbell’s attention span briefly fixed itself on the idea of being a green hero, the feckless NDP found it irresistible to target the C tax. Of course this kind of genius move just reinforces the Right’s consistent anti-tax narrative, which will make it all the harder for the faux Lefties to do anything mildly redistributive when they occasionally get into power.

    What is truly remarkable is the amazing power attributed to C taxes. Proponents make claims for their effectiveness that are just as ridiculous as the alarm raised by their opponents.

    All of which means that the Right will succeed in forcing abandonment of market-based tinkering, so that future climate protection action will only be able to rely on the intervention of the state via industrial policy, targeted subsidies, and direct decrees – not quite what they had in mind.

    So the true power of the C tax actually lies in the temptation that it provides to opportunists of both Left and Right: short-term political gains that ultimately neutralize the long-term goals of both ends of the spectrum!

    Reply
  10. David

    December 5th, 2018

    Carbon taxes seem to have lately become the lightning rod for some conservatives, who sense this may be a winning political issue for them – after all who wants more taxes. Given that some Conservatives are climate change deniers, I suppose this is not too surprising, but I think this approach carries bigger risks for them than they realize.

    First of all, a lot of people (even some people inclined to vote Conservative) are concerned about the environment and I would say that concern is increasing over time, even if this increasing concern is not quite being fully conveyed by the mainstream media. Conservatives risk appearing unconcerned about the environment, particularly if they have no other viable plan to articulate. This could especially alienate younger voters and voters in key places they must do well in like BC.

    The second risk is that a carbon tax is arguably the most free market approach – set a price and let the market determine which pollution to cut back. An approach that selects emitters to target, presumably large industrial emitters may require much more detailed regulation and have worse economic consequences. Look at all the negative coverage of GM’s closing its Oshawa plant – which the company did not tie to carbon taxes at all and imagine the political fall out if some company decides to close a factory or facility in Ontario due to onerous or poorly drafted emissions regulations by a Conservative government that has to be more stringent on large emitters, because it not trying to get all other emitters to reduce output.

    The third risk is climate change denial itself. It is becoming clearer that climate change is happening and a lot of weather related events have happened across Canada in recent years that fit this narrative – forest fires, floods, etc… In the last election the long standing parsimonious position of the Harper government on refugees did not look very good, particularly when a tragedy happened with Syrian refugees trying to come to Canada. Likewise, the Federal Conservatives better pray for no forest fires, floods, heat waves or droughts around the time of then next election campaign, or they will risk looking very out of step with reality again.

    I expect carbon taxes will be an issue in the upcoming Federal election, but I am not sure it is quite the winning issue some Federal Conservatives seem to think it is for them and it could even easily turn against them.

    Reply
  11. Thom P

    December 5th, 2018

    I believe the single greatest mistake the forces advocating for action on climate change have made is a relentless focus on reducing carbon emissions as the solution to the problem, when the problem may be that there are just too many people on the planet and unless we get population growth under control worldwide, there will never be enough emissions reduction to curb the rise of retained heat in the atmosphere.

    Now, this idea is not my own. I got it from my father in law, who is a retired geophysicist and has spent the past ten years studying the links between the environment, population and education. His thesis is that rather than reducing the per capita footprint worldwide – which is an average derived from dividing total carbon output by the world’s population – work to get population growth under control so that while we work out technical solutions to climate change we are not adding to the problem.

    And the only sure-fire, proven way to reduce population growth is education. Educated people – especially women – tend to delay having children, tend to have fewer children and overall make better life choices.

    Another point to consider – and this one is my own – is that climate evangelists have done a terrible sales job explaining both the problem and why and how their strategies are supposed to work. The problem isn’t just carbon, and carbon tax shouldn’t be solely focused on atmospheric carbon emissions. The problem is waste. Our economies produce far too much stuff that gets turned into garbage immediately after its purpose has been served and we have no effective means of forcing the producers of the waste to deal with it in a responsible way.

    Think of the giant mass of plastics floating in our oceans. Most of it is packaging for consumer products, from what I understand, that served only one purpose: deliver a good safely to market and then be thrown out. Could it be reused or recycled? Absolutely. Is there any incentive to do so? Not one bit.

    Furthermore, the one salient point that has been missed about carbon taxation, is that it is supposed to replace other taxes, not supplement them. The proceeds of carbon taxes should be revenue neutral, i.e. that as collections on carbon taxes rise, they allow governments to reduce other taxes, like corporate and personal income taxes and property tax levies for education. Any and all carbon based waste can be included in a carbon tax, including and especially non-fuel downstream products like plastics, especially the ones which are both extremely difficult (or uneconomical) to recycle safely such as polystyrenes.

    Good tax policy makes good social policy. A carbon tax properly implemented can good for the economy, good society and good for the environment, but only if it taxes the right things and the proceeds are used to primarily fund general revenues rather than be diverted to climate change initiatives. It must capture as many waste streams as possible and be heavy enough to force economic choices that can’t be avoided simply by fleeing the jursdiction, or appealing to sympathetic politicians.

    If the right has abandoned their own policy, its because they couldn’t sell it either, probably for much more cynical reasons. Cap and trade won’t work, either. A technocrat’s dream program in that it creates lots of work for other technocrats and costs pots of money, but creates a derivatives market that is easily gamed and produces little measurable change.

    A carbon tax will work, if we do it right. Unfortunately, I don’t think we are capable of doing this.

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  12. D. Bruce Turton

    December 5th, 2018

    “It is not the unknown we fear, but the known coming to an end.”
    Both individuals and the western ‘financial success driven’ society as a whole seem to find themselves in a situation described by Joseph Campbell as “getting to the top of the ladder and finding that it stands against the wrong wall.”
    Any amount of global warming denial will no longer suffice for generations born into a consumerist world (without end!) that they know cannot continue with the depletion of necessary resources, the overuse and pollution of fresh water, the deterioration of mined (called agriculture) soils, the felling of the ‘lungs of the world’ of tropical and boreal forests, the rapacious decimation of oceans and lakes of food sources, the voracious accumulation of debt that will never be repaid, the obliteration of 60% of natural fauna, and so on…
    Most of us who live in Canada cannot claim that the rest of the world are having too many kids while our consumption stands at 8 times what the world average is; who claim that we are so small a nation as not to matter when we produce about 4 times as much carbon waste as the world average, and so on in our profligate society…
    I do agree that carbon taxes and cap and trade are a waste – brought about and encouraged by conservative political proponents. Most people do not like increases in taxes (but then too, most people do not like reductions in services supplied by taxes). Indeed, even advocates of Ayn Randian mores neglect the simple fact that she did, under her married name, garnered her share of Social Security; her share of living at the public teat while publicly denouncing such egregious activity!
    But little or nothing is advocated as an alternative to taxation – like maybe replacing fossil fuels with clean, renewable energy sources at scales that offer not only adequate power, but adequate employment with adequate compensation. The silly notion that governments should never interfere with “free” markets should be written out of all texts that propose such nonsense. Markets are not some sort of ether that knows exactly what to do for us, but a collective and movement of actual human beings making decisions, and usually not for the benefit of any majority of people of any society or nation. Governments have always picked winners and losers; the energy we need is inherent in that decision-making process. And the ‘advice’ gleaned and used by our representatives is usually skewed in favour of those who make the largest donations.
    As John M. Greer has spelled out for years: The kind of future we’re actually going to get is a future shaped by the slow decline and fall of industrial civilization, brought about by the depletion of the natural resources on which it depends and the disruption of the ecological systems on which it’s equally dependent. Space travel and the rest of the panoply of shiny new technologies with which people these days like to stock their imaginary futures – forget about it! Instead, think economic contraction, the abandonment of high-end technologies, all the familiar processes through which civilizations slowly give way to dark ages and dark ages give way to the rise of successor cultures.

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  13. Political Ranger

    December 5th, 2018

    … and I would ask, What’s the good of a democratically elected government if all they do is promote the neoliberal objectives of the corporate class?
    It’s been many, many years since we had a government intent on pursuing the common good for all citizens. It’s a given that any benefits accrued to corporations will be at the expense of the citizenry and visa-versa.
    A radically restrained energy regime is going to be very difficult for everybody. There will be winners and losers. We’re going to have to figure, pretty darn quick, who are going to be the losers and what we’re going to do about them. Otherwise, there is a very great chance that we’ll all be lost.

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  14. Bob Raynard

    December 7th, 2018

    David, I too have grown disillusioned with the carbon tax. In addition to the very valid points you have made, it doesn’t seem to have altered people’s behaviour. I still see people idling their vehicles for prolonged periods, even in temperatures that they are unlikely to be using their heater or air conditioner.

    When the carbon tax idea was first proposed I thought it was a wonderful idea, because it let people choose the emission reduction technique that worked best for them. Prior to that my thinking was that we needed a government with the intestinal fortitude to legislate more environmentally responsible behaviour.

    Pretty much since the dawn of modern democracy, governments have worked to provide its citizens with a better lifestyle. The only times I can think of where governments had to impose a deterioration in people’s lifestyles were war time rationing and abolishing slavery. Yet if we are going to avoid a climate catastrophe, a deterioration in our lifestyle is going to have to happen, especially since renewable power and electric cars aren’t quite ready yet. If we don’t go the carbon tax route I think we are back to the legislation route, which is sure to be even less popular than the carbon tax route.

    Laws prohibiting profligate energy use will be low hanging fruit for opposition politicians and the right-wing rage machine. (We have already seen it during anti-idling debate; the Edmonton Sun described it as an attack against low income people who could not afford garages, ignoring the huge number of people who have garages are so filled with stuff there is no room for a vehicle. Drive down a street in a new development after supper and see how any vehicles are parked in the driveway in front of a 2 or 3 car garage) This seems brutally irresponsible; collectively they are putting their political success or ratings above the best interests of the population. Danielle Smith saw the devastation climate change can bring when she was MLA for High River during the 2013 flood, yet she still rails against climate change measures. How many of the people whose homes were ruined by those floods thought it was a fair trade off to be able to continue enjoying their outdoor hot tub in the middle of winter?

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