Politicians are chipping away at the carbon tax. Pierre Poilievre wants to "axe the tax" entirely. The situation upsets former environment minister Catherine McKenna. She writes:
Life is full of ironies. Using pricing to change behaviour is a strategy drawn from any conservative playbook. By setting a price, a market can work its magic and people can make the best choices for their businesses and families.
This is the logic at the heart of Canada’s approach to meeting its climate commitments and driving carbon pollution out of our economy and environment.
But because I’m not a conservative and know that markets often hurt people who can least afford it, I made sure that the federal approach to carbon pricing had a special protection built-in: it’s revenue neutral. This means that the money raised by putting a price on carbon is transparently rebated in the form of a quarterly Climate Action Incentive rebate made directly to Canadians’ bank accounts.
This can seem complicated but it’s not. Yes, the price of fossil fuels will rise, but most Canadian families are better off with rebates and the choice really is theirs: use the money to offset rising energy prices or use it, alongside other government incentives, to save more money long term by switching to less costly forms of heating and transportation.
This isn’t something I expect our political opponents to advertise, but it doesn’t stop it from being true. Nor does it change the fact that Canada’s carbon pricing system follows the same approach successfully pioneered by conservative politicians.
Think Prime Minister Brian Mulroney and acid rain or Premier Gordon Campbell who created Canada’s first carbon pricing system in British Columbia. Quebec Premier Jean Charest made common cause with the all-American Republican governor Arnold Schwarzenegger to set up a carbon market that, despite opposition in Quebec and California, propels both economies forward.
Mr. Poilievre and his party claim to be Conservatives. However,
on one hand we have today’s Conservatives who refuse to take lessons from their own. On the other, let’s remember that while we are in a fossil fuel climate crisis, the oil and gas industry is playing a double game. They are generating massive profits that they return to their shareholders while charging consumers exorbitant prices. At the same time, they are demanding huge public subsidies to clean up the pollution they cause, while walking away from their already modest climate commitments.
This, incidentally, is why an oil and gas windfall tax is long overdue. It would address the climate crisis and improve affordability by helping families transition to lower cost, clean energy. According to the Parliamentary Budget Office, if the same windfall tax currently paid by Canadian banks and insurance companies was paid by the largest Canadian oil and gas companies, proceeds would reach $4.2 billion in just five years.
Let’s not lose focus. The problem here isn’t carbon pricing. It’s our reliance on outmoded carbon intensive technologies, including home heating systems. As Clean Energy Canada has made clear, “fossil fuel inflation is the culprit for skyrocketing heating oil prices.” The sooner heating systems relying on oil and gas are switched out — everywhere — for cold-climate heat pumps, the better for consumers and for the planet.
A windfall tax can help Canadians get it done.
Unfortunately, the political courage to do that is nowhere to be found. It's hard to find courage anywhere these days.
Image: Wikipedia
18 comments:
The comely McKenna quit government service. Why? I suspect despair was her motivation or perhaps greenwashing guilt or both.
Is penning an opinion column more impactful than being a federal minister? Why does she bother?
"“The 1.5-degree limit is deader than a doornail,” Hansen, now a director at the Earth Institute at Columbia University, said in a call with reporters Thursday. “In the next several months, we’re going to go well above 1.5C [Celsius] on a 12-month average. ... For the rest of this decade, the average is going to be at least 1.5.”"
We are on the Titanic, PoV, speeding toward the iceberg.
I have to confess, Owen, to never really understanding the logic of the carbon tax. Given that it is essentially revenue-neutral, with the rebate checks sent out regularly, it is predicated on the notion that people will make rational choices, i.e., they will reduce their carbon use in order to come out ahead with the rebate checks. My observations and the lessons of history, however, suggest that people are anything but rational.
To be effective a carbon tax has to hurt and it has to keep hurting more and more to the point that people make necessary changes. The obvious problem with that is political. There is another option that should generate less negative noise: stop subsidizing carbon; let the carbon producers carry the can when they raise prices.
Trudeau's pipeline will probably come close to $35 billion. That's an awfully big subsidy. Then there are these massive loans for building factories that make carbon burners, tax relief, royalty cuts, failure to enforce clean up, etc. The subsidies, direct and indirect, are massive. The money would be better spent on health, education and welfare.
Economic theory is founded on the principle that people make rational choices, Lorne. History is founded on the theory that they don't.
A very rational suggestion, Toby. If you want to get people off oil, stop subsidizing it.
But if we stop subsidizing oil and gas, the people of Saskberta won't vote Liberal. Wait, what was that? I see, never mind then.
Justin bought Albertans a pipeline, Cap. It didn't get him a single vote.
A cabinet minister who flew around in jets and rode in limousines is hardly in a position to lecture the rest of us on climate change. If the carbon tax was really that important, why did the PM remove it from home heating fuel? It was, and has always been, about politics. Ms McKenna is someone who has "luxury beliefs". AN
I disagree, AN. The carbon tax is not a "luxury belief."
Ms McKenna takes pains to let us know that she isn't a conservative, but adopted a "conservative strategy" by assigning a price to carbon, which apparently will then allow the market "to work its magic". Well, she is certainly correct in assuring us she isn't a conservative, but that isn't how markets work. Markets work on supply and demand, so the price of carbon will be reflected not by an arbitrary number but by how much demand there is for it. Right now in Canada, there are no realistic alternatives, especially for people who need to heat their homes and drive a car (which is why the Liberals took the carbon tax off for the Atlantic Provinces). AD
Dear Owen do you know what the term "luxury beliefs" means? Here is the definition: https://en.wikipedia.org/wiki/Luxury_belief#:~:text=The%20term%20is%20a%20neologism,sociology%20predates%20the%20term%20itself. AN
Markets are also about creating incentives, AD. Governments need to create incentives to get off oil.
The crisis we face is not just about the wealthy and socially blessed, AN. The carbon tax was meant to provide a solution for all of us. As McKenna suggests, the real problem is that the oil companies are playing a double game.
I have to confess, Owen, to never really understanding the logic of the carbon tax.
I think I did once. Boiled down to its very basics, I think a carbon tax means everyone pays the tax, all the money goes into a big pot and is given back but in most cases the big carbon producers pay the most but most of the rebate goes to the general population. The big polluters get little or nothing. I think, in theory, many people could get more back than they paid in.
I am not an economist. It seems to have worked in BC.
Taxes work on a simple principle, jrk: pay now or pay later -- when the cost will be much steeper. We're choosing to pay later. By then it will be too late.
What about this Owen? Another fiasco. AN
https://globalnews.ca/news/10100183/windsor-stellantis-battery-plant-international-workers/
I'm surprised, AN -- and disappointed.
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