Time to re-ignite talk of a carbon tax; cap-and-trade is a scandal in waiting
I’m in Vancouver today, off to L.A. tomorrow as part of the research effort for my upcoming book on clean energy innovation. Sorry I haven’t posted for a while, but will get back on track when I return to Toronto later this week. I did, however, want to draw attention to my latest Clean Break column in the Toronto Star that calls for serious carbon tax talks in Canada. Yes, yes, I know — controversial, taboo, don’t go there. But we must. I’m not convinced cap-and-trade is the way to go, given the enormous potential and likelihood of abuse. Besides, we’re not anywhere close to implementing a comprehensive cap-and-trade regime in North America. A carbon tax is simpler, more transparent, sends the right signals to consumers and is easier to implement. Most of the folks in industry, government, the financial sector and academia that I talk to privately tell me they favour a carbon tax, but few seem willing to stand up and champion the issue. That’s a shame, because I’m convinced that without this price on carbon — and a meaningful one, I might add — Canada will become less productive over time and will suffer from an innovation deficit. Ultimately, this will harm our global competitiveness while doing nothing to play our part in reducing global CO2 emissions.
And what of the Alberta problem? The feeling from our western cousins is that a federal carbon tax would be a transfer of wealth in disguise, flowing from west to east. But I don’t see why a federally set carbon tax need impose a transfer of wealth. The provinces, charged with collecting this tax, could also be permitted to spend it as they see fit within their own borders. Under the condition, of course, that it be spent on serious carbon-reduction initiatives, and hopefully not just carbon capture and storage. Because such initiatives would be in-province, this would add to economic growth and diversity — it would benefit, not harm Alberta, though I’m under no illusions there will be some transitionary pains and lots of complaining. In any event, it’s doable if we’re willing to talk about it and get creative with how to implement it.
Tags: carbon tax