The carbon tax in B.C., a carbon levy in Alberta, cap and trade in Ontario and Quebec. As far as political footballs go, carbon pricing sees a lot of action. No doubt you’ve heard the phrase “job-killing carbon tax” a few times.
So, it’s easy to wonder why its fans keep advocating for carbon pricing when there are less politically contentious options available.
But here’s the thing: carbon pricing just makes so much sense.
1) The consensus among economists is clear
In a survey of 365 economists with climate expertise, 81% said that carbon pricing was the most efficient way to cut carbon pollution.
The OECD similarly supported this assertion based on a study of 15 different countries and their policies to combat carbon pollution, concluding that “market-based approaches like taxes and trading systems consistently reduced CO2 at a lower cost than other instruments.”
Carbon pricing also has a proven track record, internationally and at home. In B.C., which implemented North America’s first carbon tax, economic analysis concluded that the province successfully cut carbon pollution by up to 15%—with almost no economic impact.
Meanwhile, the four provinces with carbon pricing systems in place last year led Canada in GDP growth in 2017.
Carbon pricing works—very efficiently.
2) Canadians want to do their part
There’s a new normal in Canada on the question of climate change, with nearly two-thirds of Canadians wanting real action, according to research from Abacus Data.
As for Conservative voters, 85% believe we have a moral responsibility to those who will live on the planet after us, while two-thirds see a looming financial disaster if we fail to do more.
When asked how climate change will affect who they choose to vote for in the next federal or provincial election, half of Canadian voters say they wouldn’t consider a party or candidate that doesn’t have a plan to combat climate change (only 6% prefer a party or candidate who ignores the issue).
As Abacus Data chair Bruce Anderson put it, not having a plan to address climate change “is like campaigning with one hand tied behind your back.”
3) It’s an opportunity for Canada
In my line of work, one of the most common questions I get asked is: What’s the one thing governments can do to grow clean energy technology in Canada? And while it would be challenging to limit the answer to an individual action, there is one policy that supersedes all others in driving growth in cleantech and clean energy. You guessed it: carbon pricing.
Carbon pricing works because it sends a market signal that directly impacts behaviour, rewarding those who make choices that reduce carbon pollution. What’s more, it allows for flexibility in how heavy emitters reduce emissions; they can pay the carbon price or invest in clean solutions—heat pumps, energy storage, renewable natural gas, energy efficiency.
By incentivizing these solutions, Canada is helping grow its cleantech industry, the global market for which is now estimated to be worth more than $5.8 trillion, with a t—and growing.
Not only that, the money raised from pricing carbon can be put to good use—like supporting the development of new carbon-cutting technology, or helping low- and middle-income Canadians. A third of Albertans, for example, receive a bigger rebate than the carbon tax costs them. Another third break even.
We are living through a century in which climate change will cost Canada billions every year—not to mention the toll on human lives, animals, and our planet.Put simply, it would be wasteful not to use the most efficient tool on the table.
