The perils of polling on carbon pricing
Author — Dan Woynillowicz Category — Carbon
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Polling on taxes is always a bit fraught—people aren’t typically predisposed to wanting higher ones. What’s more, when it comes to carbon pricing, how a government goes about pricing pollution and what it does with the revenue is inherently complex. So polling on the subject is tricky, and unfortunately often leads to polls that aren’t very useful for policymakers or analysts, but that tend to garner media attention.

The most recent example of this comes courtesy of the Angus Reid Institute, which last month polled Canadians’ views on federal carbon pricing.

Helpfully, the survey’s preambles and questions are available, so we can see what information participants were presented with and the exact questions that were posed. And this is where things get interesting.

Less than five per cent of Canada’s economy is likely to experience significant competitive pressures from differences in jurisdictional carbon prices

While I could quibble with all three of the questions, the third is particularly egregious in both its introduction and the question asked:

Some say implementing carbon pricing now will hurt the Canadian economy by making it harder for Canada to compete with the United States, which has no such policy. Others say the situation in the U.S. shouldn’t affect Canada’s decision because fighting climate change is more important than protecting carbon-intensive industries.

Which of these perspectives is closer to your own, even if neither is exactly how you feel?

  • Canada should hold off on carbon pricing to avoid having a competitive disadvantage with the U.S.
  • What the U.S. does shouldn’t matter – Canada should implement carbon pricing now

The wording here is less than ideal. “Hold off” is a nicer way of saying “do nothing,” while the second option is presented as reckless, implying that support for climate pricing requires one to disregard our largest trading partner.

Unsurprisingly, the offered context and framing of the choice led to a predictable outcome, with 55 per cent of those surveyed agreeing that Canada should hold off on account of concerns about competitiveness with the U.S.

Here’s what the question left out.

The subject of competitiveness has been thoroughly studied. Research conducted by the Ecofiscal Commission arrived at two conclusions that are essential context that was not provided to participants in this poll:

1) Less than five per cent of Canada’s economy is likely to experience significant competitive pressures from differences in jurisdictional carbon prices. (In other words, 95 per cent of Canadian businesses would find their competitiveness largely unaffected.)

2) For those businesses that are at risk, smart policy design—like output-based allocations—can address the challenge.

In short, competitiveness actually isn’t a big problem for Canadian businesses. And for those that do face a challenge from carbon pricing, there are readily available solutions.

It’s also worth noting that leadership on carbon pricing can help develop new competitive advantages in addition to cutting pollution. As a market-based tool, pricing carbon pollution can spur technology and process innovation—solutions that can be sold into those markets that are dragging their heels on climate policy, like the U.S.

I’m going to hazard a guess that if a third choice had been offered—“Canada should implement carbon pricing now alongside measures to protect the competitiveness of businesses”—it would have proved popular.

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