When Australia repealed its carbon tax last week, environmentalists around the world rent their garments and beat their breasts. "We are taking a monumentally reckless backward leap even as other countries are stepping up to climate action," John Connor, chief executive of Australia's Climate Institute, told The New York Times. The Green Party's Elizabeth May lamented that it "sends the wrong signal to the world. "
Many economists and other experts assure us that carbon taxes are a good thing. "What do these PMs know that economists don't?" read the headline on a Globe and Mail opinion piece by Munir Sheikh. The former Statscan chief statistician reeled off reams of numbers, chastising both Stephen Harper and Australia's Tony Abbott for their ignorant know-nothingism.
But canny politicians know some things economists don't. They know that a lot of people don't like carbon taxes, and will punish governments that try to impose them.
In Australia, climate policy has been a death knell for politicians who failed to read the fickle public mood. Popular concern for the environment reached a peak back in 2006. During the 2007 election, both major parties promised tough action on the climate. Then came the recession, and people's worries shifted elsewhere. When Julia Gillard took over as leader of the Labor Party in 2010, she solemnly swore not to impose a carbon tax. Then she formed a coalition with the Greens and promptly broke her promise. The carbon tax was introduced two years ago, and people hated it from the start. They threw the Labor Party out of office and elected Mr. Abbott, who promised to "axe the tax."
Australia's carbon-tax fiasco has been blamed on inept politics, public misunderstanding and design flaws – problems that are built into a lot of climate policy, as it happens. But the biggest problem was that the carbon tax drove up people's energy bills. The tax was billed as being revenue-neutral, but people didn't believe it. They also didn't see why they should have to pay for climate change when their country's output of greenhouse gasses is so small and inconsequential to the climate.
Canadian politicians – I mean you, Justin – would be smart to pay attention. Mr. Trudeau is totally gung-ho on what he calls "carbon pricing," although what this means, or whether it is different from a "carbon tax," is a mystery. In fact, people would probably be happy if he said he wants to tax the oil companies more. But they won't be so happy if they think he wants to tax them.
I know, I know. B.C. has a carbon tax, and loves it! Everybody says so. British Columbians are the most enlightened people on the planet. But I'm willing to bet my SUV that most Canadians are not nearly as enlightened as they are.
This doesn't mean that Canadians don't care about environmental issues. They care deeply. But they care far more about oil spills, pipeline safety, polluted rivers, and real disasters in their own backyard than they do about the intangible uncertainties of global warming some time in the future.
Environmentalists worry that Australia's carbon-tax reversal is a bad sign for world climate talks, which are set to resume a couple of months from now. But the truth is that the climate talks are already in deep trouble – not because of ignorant know-nothings like Mr. Harper and Mr. Abbott, but because voters in much of the Western world are rejecting the green agenda as too impractical and expensive. Even Barack Obama knows this. In the ideal world of economic models, carbon taxes might be great. But in the real world, they're a loser.