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Jeffrey Simpson (Bill Grimshaw)
Jeffrey Simpson (Bill Grimshaw)

Jeffrey Simpson

Canadians like the things that produce pollution Add to ...

Prime Minister Stephen Harper was at it again yesterday, making one of his now-patented "announcements" of another government spending project, this one in Rivière-du-Loup, Que. A little context might be in order.

On Nov. 9, the Conservatives scored a surprise by-election victory in the riding of Rivière-du-Loup. About two months later, the Prime Minister arrived with a little political reward: a $4-million investment in a project to turn organic waste into biogas, a renewable fuel. Talk about fast political payback!

Green technologies, to be fair, are much in vogue and badly needed. As such, they are part of the government's much-touted Economic Action Plan.

Alas, an independent study of stimulus packages in major countries found the share of "green" plans in the Harper package to be second lowest in the world.

The Rivière-du-Loup venture reflects the Conservatives' overall preference for dealing with greenhouse-gas emissions. That preference is to treat the problem as an engineering, technological one, whereby subsidies and investments in projects will substantially bring down emissions.

These investments have their place, and every country is doing them. It's just too bad the Harper government didn't use the stimulus package to do more. (Before the recession, it had established a $1-billion Green Infrastructure Fund. The money, however, was to be spaced over five years - and, sadly, $250-million a year doesn't buy that much.)

But the indispensable key for reducing emissions - a point underlined by every serious study - is to put a price on carbon. Unless Canada finds that key, all the other approaches will fall way, way short of a serious emissions reduction.

How to price carbon, therefore, is the issue in the climate-change file.

Canada had a choice in the last election, and rejected a carbon tax. British Columbians had a choice in their last election, and re-elected the government that had introduced one. In this case, politically speaking, national trumps provincial. A carbon tax is dead nationally.

Instead, at some point, Ottawa will establish a "cap-and-trade" market for emissions, probably parallel to whatever market the U.S. creates. When the U.S. will move, and how (or if), remains unclear; as a result, what Canada will do also remains unclear.

In Britain, a major commission recommended what Canadians have rejected - a carbon tax, or what the British Green Fiscal Commission called a "green tax." (Shades of the Liberal Party's Green Shift in the last campaign.) The British commission, made up of MPs, business leaders and academics, argued that "the concept of a green tax shift is simple: taxes on the things that are valued by society [such as]jobs, incomes and profits are reduced and the lost revenue is replaced by taxes on things society does not like, such as pollution and environmental degradation."

Great in theory, tough in practice. It turns out that Canadians like the things that produce "pollution and environmental degradation" a whole lot.

Many of them like two cars, often large ones, and they like low gas prices. They like bigger and better television sets that use more electricity than smaller ones.

They like "jobs, incomes and profits" that they think are tied to the oil and gas and coal industries. They prefer to feel virtuous about the environment, as long as virtue doesn't carry a price. And they doubt politicians who promise to recycle higher taxes on carbon into lower taxes on individual incomes and company profits.

Paul Elkins, director of the British commission, is in Canada this week making a strong case for a tax shift. He will find a receptive audience among the already converted but not much enthusiasm for a subject now considered political suicide and overtaken by the decision to opt for a "cap-and-trade" model.

The greatest irony in what Prof. Elkins will describe is how much better a carbon tax would have been for the oil and gas industry. Rather than being singled out as pollution producers, as will happen in a "cap-and-trade" model, companies would have found consumers also swept into the carbon tax.

Companies would have had cost certainty. There would have been no middlemen doing trades, as will happen in the "cap-and-trade" world. A system could have been designed whereby revenue raised in one province could have been recycled there.

It was an opportunity missed, although the imperative of pricing carbon remains, yesterday's photo-op announcement in Quebec notwithstanding.

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