How the carbon tax mess is distracting us from realistic climate solutions

Carbon taxes are shaping up to become a ballot-box question in Canada’s 2019 federal election. Support is broadly split on partisan lines.

Stewart Muir

Stewart Muir is the founder and Executive Director of the Resource Works Society based in Vancouver.

It’s easy to see why advocates of carbon pricing are feeling frustrated right now. Carbon taxes take a lot of work to propose, but are easy to oppose. How often do people ever vote themselves a new tax? In Washington State, the architects of a carbon tax on the ballot in November 2018 learned from previous disappointment that partisan polarization would crater an initiative. So they went to painstaking lengths to accomplish what they thought was a depoliticized approach. No matter: voters weren’t interested and once again gave the carbon tax a wide berth.

It would be simple to point to ideological polarization as the root of the problem, breaking it down into those easy stereotypes of the climate zealots versus the deniers. Yet, on closer examination, the reality is very different. Understanding this, is the key to constructing a successful path forward that will rescue climate policy for Canada.

“The idea of carbon pricing is pinched from the sin tax model, and therein lies the problem.”

The idea of carbon pricing is pinched from the sin tax model, and therein lies the problem. Look at tobacco. Between 1982 and 1992, the Canadian government increased tobacco taxes by 500 percent, resulting in a 40 percent decline in per capita consumption of cigarettes. Great outcome. The idea here is if you want consumers to behave in a certain way, tax the undesired behaviour and reward the desired behaviour. The problem with penalizing carbon use, however, is that while carbon is a substance with obvious negatives, it also happens to be a byproduct of the most positive and transformative substance in the history of human civilization: the hydrocarbon. Tobacco did not create the conditions for disease eradication, the near elimination of hunger and child mortality, or cheap solar panels. Hydrocarbons did. Kicking the habit solves the tax problem for a smoker, but particularly for suburban and rural residents who have to rely on reliable and affordable internal-combustion vehicles, carbon pricing is just another unavoidable burden to carry.

Despite making this observation, I’m not a carbon tax hater. A dozen years ago, I had a front row seat when British Columbia developed its innovative carbon tax. At the time, it seemed like the right way to go. The policy wonks found a clever way, in the form of revenue neutrality, to assure that the negatives of a sin tax would be mitigated. In those innocent days before we all disappeared down the tax-recycling and rebate rabbit hole, it seemed cut and dried.

The B.C. approach won a lot of accolades in its early days. Over the longer term, however, I’m having trouble seeing any benefits from the Province’s approach that wouldn’t have happened anyways. Innovation in the automobile business has accounted for big gains in fuel efficiency, 20 percent or more in most cases, resulting in less pollution from vehicles. Yet, in 10 years, per capita gasoline and diesel consumption in B.C. has increased, not fallen. In 2007, before the tax came in, equal numbers of sedan/hatchbacks versus light trucks/SUVs were sold. By the summer of 2018, new car buyers in B.C. bought 2.7 pickups/SUVs for every car. At the end of the day, it was a wash. Consumers exploited the technology and fuel efficiency improvements to buy the larger and more powerful vehicles they preferred.

As the modelling experts continue to tinker with their equations and insist they know best, my inclination is to learn from experience by attacking the climate change problem from a more practical direction than carbon pricing. I’m not saying we should necessarily give up on carbon taxes. What we need to do is achieve a better understanding of what technology can accomplish, while getting over some cultural taboos about energy.

It’s time to get past the hydrocarbon hectoring. Search the Paris Climate Agreement text for the terms fossil fuel, petroleum, oil, or hydrocarbons. They aren’t mentioned at all. The agreement shows that the future of energy occupies a vast landscape, and is not a narrow set of specifications to be laid down by various think tanks trying to take ownership of the climate mandate. A realistic call to action for the 21st century requires that we start with four basic principles.

First, we need to start thinking globally, not locally. China’s emissions affect all of us, yet so far countries like Canada have refused to adjust their approach to recognize this. Second, it’s time to scrap deterministic approaches to knowledge and innovation that are holding us back and degrading the quality of discussion. When the most strident voices calling for specific energy solutions everyone should adopt also happen to be the sales reps for those solutions, respectful skepticism is required. But right now that’s missing in action. Third, as B.C. taught us, it’s necessary to see things the way they are seen by the shoppers/voters/moms who in the pursuit of the best outcome for themselves, will do what they do. And finally, let’s never give up on educating and informing, because that is the ultimate key to progress.

These four principles are both local and universal.

To operationalize them, I’ve proposed a dozen concrete actions that will be much more effective than the carbon tax fandango. These include getting as much natural gas to China as we can, as quickly as possible, in the form of LNG. Doing so will reduce emissions in China while ensuring that the most innovative part of the Canadian economy, the oil and gas sector, continues to achieve breakthroughs in recovering hydrocarbons with the fewest unwanted side effects. The expertise being accumulated at the cutting edge of drilling and extraction also holds the key to future success in energy solutions like geothermal and hydrogen. One can be smitten by solar panels while simultaneously pursuing the goal of a zero-carbon barrel of oil, a real objective being pursued now in our energy sector. Funding a federal innovation super-cluster dedicated to that goal is one concrete step.

Building on Canada’s long history of atomic energy innovation, linked to our abundant uranium deposits, provides another realistic pathway to decarbonization that politicians must find a way to embrace.

On the knowledge front, energy information isn’t disseminated very effectively today, and not only because most people are afraid of math. The culture war on university campuses isn’t just about pronouns and Palestine: it is also degrading our energy discourse. Investing in programs and thought leadership in the cultural pathways of energy evolution should be recognized as a priority alongside engineering and geophysics.