Much hot air emitted in carbon tax debate

Done properly, industry should be able to cope with emission restrictions

PATRICK ROSS THE GATEWAY

EDMONTON — No one needs a memo from Greenpeace these days to realize that environmental issues currently occupy a central position in the public agenda. Liberal leadership candidate Michael Ignatieff knows this as well as anyone. Ignatieff has seized upon the imaginations of supporters and opponents alike with his proposed solution to climate change: curtailing greenhouse gases through the application of a carbon tax.

According to the Global Policy Forum, carbon taxes are designed to correct the free market’s failure to account for the external costs that the consumption of fossil fuels places on society in terms of environmental damage. Ignatieff’s plan is designed to address these externalities by encouraging individuals and industries to use lower-carbon fuels.

His plan has drawn comparisons to Pierre Trudeau’s infamous National Energy Program, which to this day remains a point of contention between the Federal Liberals and Alberta. Ignatieff, for his part, insists that he would take steps to protect Alberta from the economic effects (some even suggest economic ruin) that a carbon tax could inflict. But even Ignatieff’s fellow Liberals have raised concerns. Stéphane Dion — who, it should be noted, is a former federal environment minister and one of Ignatieff’s opponents in the ongoing Liberal leadership campaign — remarked, “The first sentence he said is, ‘We need to protect Alberta.’ And in the second sentence he said ‘carbon tax.’”

The federal Conservative Party, on the other hand, has announced plans to make strict California-style emissions standards mandatory for automobile manufacturers in Canada. An agreement with automakers is currently in place; these standards are voluntary, however. The Conservatives’ plan would take effect in 2010, when the current agreement expires.

Buzz Hargrove, president of the union of Canadian Auto Workers, has his share of complaints about this plan. He claims that it would be catastrophic for the Canadian automobile industry. Yet supporters of the tax who acknowledge that it could ruin Western Canada’s energy-based economy insist that it should be permitted nonetheless. Perhaps it should be equally okay to implement a plan that could harm the car-manufacturing industry, which, like the energy industry in the West, makes up a significant portion of Eastern Canada’s economy.

The ridiculous squabbling can ultimately be reduced to a single point: fossil fuels don’t become carbon emissions until they are actually burned. A carbon tax may seem like a novel idea — especially to those who are hostile to the oil industry. However, regulating emissions at their actual source — where the fuels in question are consumed, then spewed into the air as carbon dioxide — makes a lot more sense, and will have a very real and measurable effect on carbon emissions. Yet one must still recognize that the fuels themselves are a necessary component to this process. Perhaps both components should be addressed.

It certainly couldn’t hurt to create actual incentives for Canadian industry to reduce their consumption of hydrocarbons and, by extension, their carbon emissions. A carbon tax could have precisely that effect using a revenue-neutral model under which taxes collected are returned to the industries that paid them, depending on each particular company’s success in reducing emissions. Then this model must actually be followed. Unfortunately, past experiences with the expected disbursement of such tax revenues — for example, gasoline taxes — don’t quite inspire confidence to this end.

Climate change is too critical an issue to allow it to be embroiled in petty bickering between the East and the West. This could be the perfect issue on which to reach a compromise. Perhaps Western leaders should strike a bargain with their Eastern counterparts: let them have their carbon tax, so long as it’s accompanied by the plan for California emissions standards. Taken together, the two proposals could become a bi-partisan plan for decisive action, and actually help stem the imminently catastrophic tide of climate change.