Conservatives want people to believe we can do nothing, even as they insist they agree we have to do something
Terence Corcoran and Andrew Coyne go head-to-head on whether a carbon tax is the proper tool to fight climate change.
The only credible reason to oppose carbon pricing, if we’re agreed we have to do something, is if there is some better way of doing it. This bears repeating: The unspoken assumption in a lot of carbon tax critiques is that we can do nothing instead. While doing nothing has an obvious appeal, we’ve agreed to rule that out.
But sometimes the price of a good does not include all the costs. If the production or consumption of a good gives off emissions that are harmful or unpleasant or otherwise costly to others, then consumer choices based on market prices will not produce the best result for society. That’s the point of a carbon tax: to build into the market price costs that would otherwise be imposed on the rest of society, or indeed the planet.
So the case for a carbon tax is really the case against other approaches. That means using it as a replacement for subsidy-and-regulation policies, existing or contemplated — not, as its current sponsors propose, in addition to them. There’s an opening there for conservatives to reclaim an idea they once owned, given their interest in limiting the size and scope of government. Instead, they have led the charge against.
What actual arguments are there against the carbon tax? One is that it makes Canadian businesses uncompetitive, given the failure of our trading partners, notably the United States, to impose their own carbon taxes. Leave aside that carbon pricing does apply in much of the U.S. — notably the cap-and-trade system in California.
The precedent for this was the GST tax credit, which like the carbon tax rebate more than compensates poor families for whatever it adds to the cost of living, though unlike the GST rebate, the carbon rebate also goes to non-poor families. That part of it might have been better used to cut income taxes.
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