Skip to main content

Opinion Carbon taxes are great in theory. If only they worked

Thanks to politicians, carbon taxes are now a moral cause. If you want to save the planet you’ll sign on. Otherwise, catastrophe will ensue, warns our radiant Environment Minister, Catherine McKenna.

Ridiculous, argues Ontario’s portly, populist Premier, Doug Ford. Carbon taxes will create a “carbon tax recession” inflicted on us by our evil central government. Both are blasting their message at the electorate to persuade us that their side is right.

Neither statement is remotely true, of course. At 4.4 cents more per litre of gas, the new federal carbon tax is big enough to notice, but much too small to pry people from their cars. Even so, a lot of people like it. It shows that Canada is serious about climate policy. They figure that even if a carbon tax doesn’t buy us the solution to climate change, it seems like a good first step.

Story continues below advertisement

Unfortunately, the evidence is mounting that they don’t work.

The idea behind a carbon tax (or carbon price, as it’s more accurately described) is simple. If you raise the price of something, such as fossil fuels, then people will use less of it. Economists and policy wonks say carbon taxes are the most efficient way to cut greenhouse gas emissions without affecting growth. In Canada, the federal carbon tax is also supposed to be revenue neutral, so that people get their money back through a rebate.

But carbon taxes are on a losing streak. Too many people don’t like them, no matter how revenue-neutral they’re supposed to be. The central problem is that they’are either too low to be effective, or they’re so high that the politicians responsible for introducing them will get booted out of office.

As David Leonhardt writes in The New York Times, the record isn’t encouraging. Barack Obama tried to pass a climate bill and failed. The Australian Labor Party introduced a carbon tax and was swiftly kicked out. France’s Emmanuel Macron’s gas tax increase was rolled back after it led to a general uprising. U.S. Democrats’ sweeping Green New Deal proposal doesn’t even mention carbon taxes.

One often-cited exception is British Columbia, which introduced a carbon tax in 2008. For several years, the province’s emissions fell as the economy grew. “Does a carbon tax work? Just ask British Columbia,”gushed the Times, along with many others.

B.C. gets glowing reviews from carbon-tax enthusiasts. But in fact, the B.C. government has abandoned its famous revenue neutrality. And GHG emissions have started going up again. B.C. is now stuck with the highest gas prices of any province in the country and little to show for it.

Because of this dismal record, some climate activists have begun to change their strategy, Mr. Leonhardt writes. Instead of emphasizing a negative – higher costs – they’re trying to focus on a positive. For example, even many conservatives are willing to buy into a climate plan that would increase the use of clean energy. “When the debate is about the cost of living,” Mr. Leonhardt writes, “climate activists are in trouble. When it’s about clean energy or people’s health, they have a much better chance.”

Story continues below advertisement

Another skeptic is Jeffrey Ball, a former energy reporter for The Wall Street Journal, who’s written a similar piece for Foreign Affairs. Like Mr. Leonhardt, he believes climate change is a huge and urgent problem. But he also thinks the facts should drive the policies. “Even under the rosiest of circumstances, carbon pricing will produce only a fraction of the emission cuts needed to put the world onto a sufficiently low-carbon path,” he writes. He thinks there’s much more to be gained in phasing out coal plants, emphasizing nuclear energy, slashing fossil-fuel subsidies and toughening energy-efficiency requirements.

If there were easy ways to tackle climate change, we’d have results by now. Instead, the world’s carbon emissions reached a record in 2017. Canada’s emissions were up, too. That is not an excuse for doing nothing. It’s simply an admission of the facts: We don’t yet have the tools we need.

In fact, carbon taxes have a downside, because they give you the illusion that you’re actually doing something that will make a difference. “A policy prescription widely billed as a panacea is acting as a narcotic,” Mr. Ball writes. “It’s giving politicians and the public the warm feeling that they’re fighting climate change even as the problem continues to grow.”

And that’s what Prime Minister Justin Trudeau’s climate policy amounts to – a warm and fuzzy feeling dressed up as action. Its effect on carbon emissions will be non-existent. Its effect on interprovincial relations is already awful and likely to get worse. On top of that, Mr. Trudeau could soon have five premiers battling him in court, in what amounts to the greatest federal-provincial split in recent times. A carbon tax is better than doing nothing, people say. Or is it?

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter