Climate change is not only changing weather patterns, it is costing taxpayers money and hurting our economy. To rectify the problem, we need a price on carbon pollution.
An article in Forbes magazine on April 15 entitled, “Flooding, fires and food” told readers to “consider what your political leaders are doing to address climate change. Let’s hope, for your wallet’s sake, they’re tackling the issue head-on.”
This is an article written for a US audience. However, it no doubt applies to Canada, too. The United States is our biggest trading partner and we, too, are feeling the climate pinch.
On April 17, Diana Carney and Canada 2020 brought together a distinguished panel of guests to discuss how to sell carbon pricing to Canadians. The title from a Globe and Mail article about this event clearly defined the take-home message, “Break the deadlock on carbon pricing. It’s hurting Canada’s economy.”
Canada needs a transparent price on carbon pollution to help consumers make better choices and inform investors when renewable energy will be cost competitive with fossil fuels.
Canada needs a transparent price on carbon pollution ...
Here are six ways Canada can reduce carbon pollution. They have been arranged deliberately in order from least to most transparent.
- Regulation: Carbon dioxide (CO2) can be regulated across economic sectors. This is currently what the USA and Canada are doing. They have yet to regulate greenhouse gas emissions directly from households and the oil and gas sector. Taxpayers pay for regulatory mechanisms through the costs government incurs to monitor and enforce these regulations.
- Cap and trade with offsets: Hard caps are set on carbon pollution produced by companies and industries. If a company goes over its cap, it can trade with other companies or purchase offsets in an attempt to correct an over-production of CO2.
- Cap and trade with no offsets: As the name implies, it is almost identical to cap and trade except there is no offsets component.
- Cap and dividend: The government imposes a cap and if the company or industry goes over the limit, they cannot trade away their over production to others, but instead pay a penalty to the government, which is returned to taxpayers.
- Carbon Tax Shift: This is what British Columbia has put in place. Carbon taxes have been imposed on fossil fuels and citizens receive rebate on their income taxes.
- Carbon Fee and Dividend: A fee on carbon pollution is charged by the government to fossil fuel producers and a dividend cheque of the exact same amount is given back to taxpayers. Carbon Fee and Dividend is a two-page bill and the most transparent carbon-pricing method.
Missing is the most opaque method of pricing carbon pollution: The status quo.
As long as carbon polluters do not pay, the taxpayers are footing the bill for the tremendous costs in health, security, environmental damage and destructive weather made worse by global warming.
Correcting this distortion in the marketplace, which economists refer to as Pigovian taxation, would allow clean energy and efficiency to flourish and reduce our use of carbon-based fuels.
The good news is, we can correct the market failure of fossil fuels without damaging our economy and protect the poor and middle-class at the same time.
How?
Tax carbon pollution and give the revenue to the Canadian people.
Gerry Labelle is a former Progressive Conservative candidate in Sudbury. Cathy Orlando works as the national manager for Canada’s Citizens Climate Lobby, an international, not-for-profit, non-partisan and volunteer climate education and lobbying organization.
