Our premier dumbs down the discussion on carbon pricing

I don't think anyone can really dispute that life in the North poses unique challenges in terms of reducing our carbon footprint. It is colder and darker here. We run our furnaces and leave our lights on more. 

I don’t think anyone can really dispute that life in the North poses unique challenges in terms of reducing our carbon footprint. It is colder and darker here. We run our furnaces and leave our lights on more. Our food and everything else we consume has to be shipped a great distance, and if we ever want to travel outside the territory the jet we ride on will contribute some more carbon dioxide to the atmosphere. Long winter nights make using solar energy to supplement the grid less realistic.

And perhaps most importantly, if we ever want to wean ourselves from the federal teat we’re going to need some economic growth.

But living in the North shouldn’t be an excuse for doing nothing either. Premier Darrell Pasloski has made hay in recent weeks by voicing his opposition to any sort of national carbon pricing regime, using the excuse that life in the North is hard.

I find the premier’s opposition disappointing for several reasons but primarily because he contributed to widespread misconceptions about carbon pricing, which remains a poorly understood tool in the CO2 reduction toolbox. And like critics of carbon pricing who went before him, Pasloski simply assumes it will be a drag on the economy and ignores the many options policy makers have to ensure that carbon pricing doesn’t become “just another tax grab.”

Carbon pricing starts from the assumption that we are going to continue to emit carbon dioxide, but starts to steer society towards lower emissions by making the emitter – that would be all of us – actually pay a price for our emissions.

Prices influence behaviour. That is Economics 101. When something is cheap we use lots of it. When it is expensive we seek out alternatives to reduce our usage.

Remember when gas prices were north of a $1.30 a few years back? People were actually thinking about how much oil they used. Expensive fuel made alternatives more competitive. It made it more worthwhile to retrofit your home to make it more efficient or install solar panels. Suddenly big gas-guzzling vehicles didn’t seem like such a good idea.

We humans are incredibly price conscious. High prices create a disincentive towards high carbon practices. Carbon pricing increases the price. That part of it really isn’t that complicated.

There is an assumption in the premier’s opposition that carbon pricing inevitably means that there will be a net increase in the tax burden of Canadians which will be drag on the economy.

But here is the truth of the matter: it doesn’t need to be that way. In fact, government can return every dollar it collects through carbon pricing to its citizens if it is ideologically inclined to do so.

There is no question that carbon pricing has the potential become a tax hike. But it doesn’t need to be. Details matter and there are few limits on the policy possibilities.

Government can offset the new revenue it receives through carbon pricing by reducing income taxes or the GST. If we are concerned that carbon pricing will disproportionately affect the poor – as B.C. was when it implemented its tax several years ago – there are ways to deal with that, like enhancing the low income GST refundable tax credit or establishing new rebates.

If there are concerns that carbon pricing will hit the North particularly hard, there are ways to mitigate this as well. The federal government could enhance the northern residents deduction, or transfer money to territorial governments to reduce territorial income tax.

If you are a conservative and your goal is truly to ensure that the government does not take greater portion of the economic pie, you should focus on ensuring that is the case, not reject carbon pricing outright. Pasloski and others should focus on holding Prime Minister Justin Trudeau to account if what he ultimately introduces is not revenue neutral.

Or better yet, the naysayers should take the federal government up on its offer to act within their own provincial and territorial jurisdiction so they truly have the power to ensure that is the case. Oh yeah, we missed that part. All indications are that the federal government is willing to let each province and territory do its own thing so long as there is some minimum price paid for emissions.

It is strange in a way that conservative politicians have become so vocally opposed to carbon pricing, as it is actually a relatively “conservative” approach to the issue of climate change. It recognizes the inevitability of some level of CO2 emission. It allows consumers to have a choice in how they reduce their emissions. It even creates an opportunity for each of us to reduce our own taxes by modifying our lifestyles to be less reliant on fossil fuels. One would think that taxing carbon emissions would be preferable to taxing income – where we can only reduce our tax burden by earning less.

I’m no utopian. Some amount of emissions are necessary with current technology and infrastructure anywhere you live, and it is defensible to say that level is even higher here. But just like residents in the south, much of our emissions are optional. They are the consequence of lifestyle choices we make like large, energy inefficient homes; gas-guzzling vehicles that we drive to work by ourselves; and a disinterest in making investments in technologies that could reduce our consumption of fossil fuels.

If we accept the scientific consensus of human caused climate change, putting a price on carbon emissions would seem to be a moderate, reasonable approach to the issue. It leaves you and I as consumers and economic actors in the driver’s seat in terms of how we tackle the issue.

Otherwise – and particularly in a new world of cheap oil – we have very little disincentive to reduce our carbon footprint.

Kyle Carruthers is a born-and-raised Yukoner who lives and practises law in Whitehorse.

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