Carbon tax is wise policy

The Leader’s October 31st editorial repudiated the carbon tax policy of the federal Liberal government, asserting that “it will not alter our behaviour.”  In doing so the editorial unfortunately dismissed a policy supported by the collective wisdom of Canada’s leading economists and policy commentators, and even conservatives like Preston Manning.

It is a fundamental law of economics that prices affect consumer choices.  Needless to say, taxes on carbon increase its price.  Much fossil fuel consumption is necessary for “pretty much everything”, so no price on carbon will end fossil fuel consumption anytime soon.   But it would be absurd to imply that mainstream Canadians or Valley residents cannot find any new cost-cutting efficiencies in their lifestyles.  Wasteful people and businesses do exist and will be taxed proportionately.

The Leader writes, “The government says it will fine large companies for not adhering to carbon levels… They will merely pass the costs onto the consumer.”  Indeed, this is true.  Yet the Leader also questions the tax rebate that will over-compensate the lowest-income consumers for these new costs.  To be clear, the rebate will be a fixed sum, and will not change the fact that lowering your carbon footprint will help you to lower your taxes.

The Leader dismisses the carbon tax without suggesting an alternative to the shared goal of curbing climate change.  But the only alternatives are obscure regulations or carbon cap-and-trade, both of which are more complex and inconsistent than a plain tax.  

Soon we will have an economy where if you emit or consume less carbon dioxide than a minority of Canadians, you will overall have more money than you did before.  Only the high-emission minority will be worse off, paying more money in taxes than they get back by rebate.  Carbon taxation and rebate is as fair and simple a climate action policy as can possibly be imagined.

Stefan Klietsch

Renfrew