Max the Tax

Conservatives in Canada are already gearing up to fight the next election and an important platform for them is reputedly a war against the carbon tax, as modest as it is.  I have heard their leading line will be, “Axe the tax.”  It has a poetic ring to it, but is it good policy?

The scientists of the world have warned us that we have to reduce our consumption of carbon by 50% in 12 years. That is a tall order. Economists generally agree that the best weapon against carbon is a carbon tax. It makes sense. Make the carbon so expensive people will voluntarily switch to alternatives that have already been developed. Instead of subsidizing carbon, as we have been doing for decades, we have to do the opposite. We have to make the use of carbon painful. That’s why I advocate for a carbon tax to the max. No one likes taxes but clearly we need this one. There is no reasonable alternative on the horizon. The Conservative Party has not suggested any. It wants to continue doing what it did while the federal conservatives were in power, as little as possible. The federal liberals who were in power before that, had the same policy. It is time for change; it is time for transformative change.

Canada has recognized that a transition to a non-carbon economy requires carbon pricing and that it has to curb carbon pollution and lets face it, that is exactly what carbon is at this time in our history. We can no longer afford to pollute with carbon.

Peter Miller in an article in the Winnipeg Free Press put it well: “Absence of a carbon price (or one set too low) is a moral and market failure. It is in effect a subsidy paid to emitters by victims and governments who pick up the costs of more damage from climate change. “Axe the tax” really means “keep the subsidy.” A better cry is, “Make the polluters, not the victims, pay.”

And I’m sad to report I am one of the polluters. And so are you. Most of us are. And we’ve got to pay. Some of us can’t afford to pay. The carbon tax should be used to mitigate the losses for those people. Most of them did not cause the problem. People like me (and you) caused the problem. We should pay. Damn I had to say that, but I think its true.

That’s why Miller said, “Cancelling a carbon tax altogether is destructive tax avoidance.” It’s time to max the tax, not axe the  tax.

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