Research and opinion support a carbon tax for Canada

Carbon taxes continue to be a hot topic in Canada for many reasons, including the October Intergovernmental Panel on Climate Change report , the Nobel Prize in Economics  to William Nordhaus, and the report from Ontario’s Financial Accountability Officer on October 16, which estimates that the cancelling the province’s cap and trade program will drive the provincial deficit up by $3 billion, ($841 million in the first fiscal year alone).  And as provinces rebel against the federal carbon pricing plans, the January 1 2019 deadline approaches, by which the federal government will impose its “backstop” carbon pricing on any province without it own equivalent carbon pricing regime in place.

In response to these developments, there are many responses.  Recent articles emphasize William Nordhaus’ work: for example, “Nordhaus Nobel Recognizes What We’ve Long Known: Carbon pricing works” by Scott Vaughan at the IISD ;  “Nobel award recognizes how economic forces can fight climate change” in The Conversation Canada (Oct. 9); “Hurricanes, hog manure and the dire need for carbon pricing” in The Conversation Canada (Oct. 14);  and “Opinion: To avoid catastrophic climate change we need carbon pricing” from the Ecofiscal Commission , one of Canada’s strongest proponents of carbon pricing.  From the horse’s mouth: “After Nobel in Economics, William Nordhaus Talks About Who’s Getting His Pollution-Tax Ideas Right”  (New York Times, Oct. 13),  in which William Nordhaus is interviewed by Coral Davenport and states:  “…. I think the model is British Columbia. .. It would have the right economic effects but politically not be so toxic. … British Columbia is not only well designed but has been politically successful.”

CARBON DIVIDENDS:  The issue of political acceptability of carbon taxes generated an academic discussion  in “Overcoming public resistance to carbon taxes” by Carattini  , Carvalho and  Fankhauser  in  WiRES Climate Change  in June 2018.  In Canada, a change in vocabulary in taking hold. “Carbon Dividends could save carbon pricing – and create a new national climate consensus”  say Mark Cameron (from Canadians for Clean Prosperity) and David McLaughlin (from the International Institute of Sustainable Development) in the Globe and Mail .   The commissioned studies released by   Canadians for Clean Prosperity in September showed  that most  households, regardless of income level, would receive more money in the form of carbon dividend cheques than they would pay in carbon taxes under the backstop plan.  They have produced estimates for Alberta, Manitoba, Saskatchewan, Ontario, and New Brunswick, and maintain an online petition at a website called  Canadians for Carbon Dividends  .

rocky road tableIn  “The Rocky Road to Canada-wide Carbon Pricing,”  released by the C.D. Howe Institute on October 17,  author Tracy Snoddon from Wilfred Laurier University offers recommendations on how the revenues should be distributed after January 1, 2019, when the minimum carbon price backstop comes into force.  The author estimates carbon revenues of $ 2.8 billion in 2019 if the backstop was implemented in Ontario, Saskatchewan, New Brunswick, Newfoundland and Prince Edward Island. She recommends that the federal government should impose the backstop price and return the revenues as an equal per-capita rebate to residents- with the justification that such an approach minimizes intrusion in provincial fiscal matters, reinforces the environmental goals  rather than revenue generation, and is most progressive in its  distributional impacts.  A summary appears in the C.D. Howe press release  and in  “C.D. Howe Institute throws its weight behind federal carbon tax” in the Globe and Mail (Oct. 19).

put a price on itFinally, a new organization launched in October. Put A Price On It Canada promotes carbon pricing as a solution to climate change – and asks “why does Canada need another group fighting for carbon pricing?”  The difference: it aspires to be a national network to empower students on university campuses – currently at Simon Fraser University, the University of Ottawa, University of Waterloo, and Carleton University.

So in response to the  National Observer Opinion piece on October 18, asking  “Is it time to torch the carbon tax debate?” , the answer seems to be a strong “no”.

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