Climate costs

Carbon-price politics an ongoing tragicomedy in Canada

The reason Conservatives are scrambling to find a convincing alternative to carbon pricing is this: carbon pricing already is a right-wing approach.
Photo: Jason Kenney. By michael_swan.
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Perhaps it sounded better in his head.

“We're not climate deniers; we're climate tax deniers,” retorted Jason Kenney, leader of Alberta’s United Conservative Party, in reply to Premier Rachel Notley’s suggestion that the UCP evolve from its history of climate change denial.

What Kenney didn’t realize was that he had just revealed something embarrassing for someone hoping to convince a province he should be its next leader: he has no plan to do anything about the most urgent moral and existential challenge humanity faces.

We’ve just been getting an invisible chunk of their cost paid by someone else.

And that’s because he’d fallen into a trap, the same one that Conservative leaders such as Andrew Scheer, Doug Ford, and Scott Moe (and before him Brad Wall) keep slipping into whenever they reject carbon pricing, deny the benefits outlined in recent reports, or cancel it once in power.

Fossil fuels have always been costly

The reason for putting a price on carbon emissions is straightforward. Markets are able to factor into the price of fossil fuels the cost of finding, producing, refining, and transporting them (as well as incorporating enough profit to appease shareholders). But what they don’t take into account are the real and increasingly apocalyptic costs fossil fuels have on society. This failure to accurately price fossil fuels is an example of what’s known as a market failure, and climate change is, as economist Nicholas Stern famously put it over a decade ago, “the greatest market failure the world has ever seen.”

As long as the cost of fossil fuels is distorted, the market will be lying to us. The solution is, therefore, to progressively raise that cost using either a carbon tax or (more dubiously) a cap-and-trade system so that market actors — individuals, families, firms, and governments — can all base decisions on more accurate price signals. With just a bit of legislation, an economy-wide incentive to move away from the energy system destroying our world could be in place.

So, yes, carbon pricing will make fossil fuels more expensive. But, then, they’ve always been expensive — we’ve just been getting an invisible chunk of their cost paid by someone else, whether it’s poor farming communities paying to hold back the encroaching desert, our unfortunate grandchildren footing the bill to fight centuries of sea-level rise, or a distraught family using their savings to relocate somewhere wildfires haven’t reduced to cinder.

The barren landscape of Conservative alternatives

Now let’s say that, like Canada’s Conservative leadership, you sit on the political right. Let’s also say that, like them, you’re in the habit of making blanket rejections of carbon pricing, of the idea that some minimal market tweaking is acceptable in order to promote more rational economic behaviour.

You’ll very quickly realize you’re in a tight spot. Assuming (possibly unlike them) that you actually care if there’s a future, you have to find some other realistic solution for very rapidly directing carbon emissions down to zero. You can’t turn to more stringent government environmental regulation — you’d find that too leftist — and you certainly aren’t going to question whether we might replace capitalism with something more ecologically rational. So you have to pack up your Ayn Rand McNally atlas and Fraser Institute wilderness survival guide and set off in search of an alternative in lands somewhere even further rightward.

The problem is things get pretty barren out there.

To be on the right and reject a perfectly right-wing solution is to let it slip, like Jason Kenney and co., that you’ve checked out of the most important conversation humanity has ever needed to have.

It’s why federal Conservative leader Andrew Scheer ends up making grand pronouncements about how Canada can meet its (highly insufficient, by the way) emissions reduction target without a carbon tax and then … not suggesting anything in its place.

It’s why the ideas for an alternative to carbon pricing that came out of this year’s Manning Networking Conference, an annual gathering of Conservatives, were apparently five points on a scrap of paper, one of which was to simply set targets (note: targets do not achieve themselves; for that you need actual policies, like, say, carbon pricing).

It’s why in place of a carbon tax, Jason Kenney has proposed a less effective carbon tax.

The reason that Conservatives are scrambling to find a convincing, feasible alternative to carbon pricing is this: carbon pricing already is a right-wing, conservative approach. And to be on the right and reject a perfectly right-wing solution is to let it slip, like Jason Kenney and co., that you’ve checked out of the most important conversation humanity has ever needed to have, and that you have no business being in government at a time like this.

An adult conversation

In a less unhinged context, this would be common sense. The left-right split would not be on whether there ought to be a price on carbon because that would be uncontroversial.

Instead, the main debate would be about what to do with the revenue collected from it.

Those on the right might favour something like the fee-and-dividend system, where the revenues would be returned to each person in an equal monthly amount. Or they might look to B.C.’s early carbon tax model, which aimed to be revenue-neutral by reducing personal and corporate income taxes by the same amount raised by the carbon tax.

Meanwhile, those further to the left would argue we need to understand that the climate crisis is the result of more than just a market failure; it’s also due to having a woefully undemocratic economy.

Placing a price on carbon pollution was a step forward worth protecting. Using it to justify approving more tar-sands pipelines was two unconscionable steps backward.

So, alongside placing more stringent regulations on the fossil fuel industry and putting an end to massively subsidizing it, they would argue we should decide together how to best reinvest carbon pricing revenue. That could include investments for rapidly building the renewable energy infrastructure we require; expanding green, accessible public transit; funding a fair transition for workers in high-carbon industries; welcoming people impelled to move because of climate change; or paying our fair share to the too-predictably underfunded global bodies responsible for financing climate change responses in developing countries.

The fight over carbon price revenue would be messy, even acrimonious. (This is what happened in Washington state in 2016.) And that would be okay because, unlike what’s happening in Canada now, it would at least approximate a tenable, adult discussion.

A liberal distribution of blame

It would be unfair to lay all the blame for the current absurdity at the feet of the Conservatives though.

The Trudeau government has put those of us deeply concerned about climate change in an awkward position. Placing a price on carbon pollution was a step forward worth protecting. Using it to justify approving more tar-sands pipelines was two unconscionable steps backward. It’s hard to imagine anyone rallying to defend a party that would arrange something like that, especially as the Liberals themselves now take steps to reduce the effectiveness of their own carbon-pricing regulations.

Pushing the absurdity into the realm of magic realism were two developments late last month. First was the federal government’s efforts to consolidate provincial support for its carbon-pricing plan. For that, it turned to the same B.C. government it had alienated by imposing the Trans Mountain pipeline. Second was the decision of the Alberta NDP government, the Liberals’ once stalwart ally, to abandon the federal climate plan after the court cast Trans Mountain into legal limbo over the government’s failure to properly consult Indigenous communities.

Thanks to this ongoing tragicomedy where centre-right factions battle over whether to do too little or nothing at all about the apocalypse, Canada has become a shining example of how not to address climate change, and of why a boldly progressive alternative has become a matter of survival.

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