OP-ED BY VALERIE BLAB
All the solution-oriented discussion and public engagement around which carbon pricing mechanism Ontario will choose is most heartening, evidenced by the sold-out crowd at the Carbon Pricing Forum held at the University of Toronto in January. A Quebec-style Cap and Trade system or a BC-style Revenue-Neutral Carbon Tax?
Having grappled with this question, we in Sherwood share our observations and insights with Ontarians. Given the reputation of Mr. Hood, we do not apologize for our obvious bias.
Both strategies encourage emissions reductions by pricing carbon, thereby impacting the behaviour of industry and individuals. Polluting should cost—like a fee to take your garbage to the dump.
Chris Hartman of Chukuni Sanitation says: over 50 per cent of garbage has been diverted from the landfill since implementing the Bag Tag system. He cites changes in consumer habits such as recycling, composting, and making different purchasing decisions. Even the good friar takes his travel mug to Timmy’s!
Forum participants agreed: the best system must be an efficient, environmentally-and cost-effective way to reduce emissions, good for the economy, direct, transparent, quick, and easy to implement and administer, and “politically palatable.”
For example, the oft-repeated claim that a carbon tax would hurt the economy really depends on what the government does with the money. Fee and Dividend—a revenue-neutral “send a cheque to everybody” polluter-pay system—places a predictable, incrementally increasing fee on carbon pollution, sending a clear market signal allowing industry to adapt. It returns 100 per cent of the money to households, ensuring protection of the poor and middle class, hence championed by Mr. Hood. Favoured by top economists, it best met the criteria. BC’s carbon tax has shown a 15 per cent reduction in C02 emissions since 2008, with no discernible negative impact on income, enabling $5.6 billion in tax cuts.
The more “politically palatable” Cap and Trade puts a mandatory limit on some portion of emissions and allows firms to buy and sell rights to emit within the cap, permitting the worst polluters to buy credits from other companies. Lauded for certainty of emissions reductions, it was acknowledged to be more complex, indirect and inefficient, requiring lots of tinkering by politicians and lawyers, making it more expensive and less transparent, thus necessitating bigger government, higher taxes, and more time to implement. It is a regulatory system requiring enforcement, creates a speculative and volatile market, is more vulnerable to manipulation and fraud, and more difficult to coordinate with other markets. So what makes it more “politically palatable”?
Apparently, Cap and Trade is easier to “sell” to business and politicians because you don’t have to say the word “tax”, which has become a politically-loaded word. Solution: DON’T SAY IT! “Fee” is more accurate, as the money collected does not go into government coffers, but is given directly back to citizens on an equitable “send a cheque to everybody” basis. Economist David Robinson asserts: as well as being “easiest and safest,” “it’s okay to give people back their money!”
In addition, the prevailing “It’s preferable because nobody understands it” sentiment makes Cap and Trade easier for government to adopt, because it is not obvious to voters, thus testifying to its lack of transparency.
So, how about an “image makeover” for our Fee and Dividend underdog? To ignore the favourite strategy of top economists, which meets the “best system” criteria, because of a failure of imagination on how to sell it?! Surely we can do better! How about a catchy moniker like “The Robin Hood Gambit”? What Canadian would not embrace the idea of a carbon bonus cheque?
A Robin Hood-style solution: taking from wealthy polluters and giving to everyday citizens to help deal with the cost of pollution—an image made over in the shade of Sherwood forest. Carbon Fee Prosperity has a nice ring to it, don’t you think?
“All for one and for all!”…Oh, Marian, you’re mixing up your bands of merry misfits—but you get the idea. We’re all in this together. THE ROBIN HOOD GAMBIT! Let’s make our voices count.