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Carbon tax unnecessary to reach
greenhouse reduction targets: SFU report

> Canada’s commitment of 30 per cent reduction by 2030 better achieved by more flexible regulations

Tatum Miller
The Peak

 

recent report out of

SFU suggests that
Canada could achieve its
emissions targets without
implementing carbon taxes.

This comes after Canada’s
Environment Minister,
Catherine McKenna, said
the federal government
is ready to introduce
provincial carbon prices.

The report, titled [s Win-
Win Possible?: Can Canada’s
Government Achieve Its Paris
Commitment ... and Get Re-
Elected?, was authored by
Mark Jaccard, Mikela Hein,
and Tiffany Vass from the
School of Resource and
Environmental Management.
It caught national headlines
after it was released last week.

Jaccard has a PhD in
economics, is a Fellow of the
Royal Society of Canada, and has
served on the Intergovernmental
Panel on Climate Change, and

BC’s Climate Action Team.
Jaccard said, in an interview
with the CBC, that his question
for investigation was “how
big would that [carbon] price
have to be” to achieve the 2030
Paris Agreement targets?
Jaccard reported that it
would start at BC’s price, $30 per
tonne of COz—or seven cents
per litre of gasoline—and would
eventually rise to $200 by 2030.
That would be the equivalent of
adding four cents per year per
litre of gasoline for the next 14
years. The report argues this
would be politically untenable.
The Canadian government
has committed to ratifying the
Paris Agreement by April 2017.
This would mean reducing
greenhouse gas emissions by
30 per cent below 2005 levels
within the next 14 years.
“We have to reduce
emissions, which means
that we must have effective
policies that succeed
politically,” Jaccard wrote.
Canada has “widely missed

emission targets for 2000,
2005, and 2010,” continued
Jaccard. He remarked that
the latest government reports
show “the 2020 target will
also be widely missed.”
Jaccard told the CBC that
the motivation behind the
report was “frustration with
[...] energy-climate economists
who tell politicians “the only
way to reduce greenhouse
gas emissions is to ‘price
carbon, meaning a carbon
tax like we have in BC and in
Alberta, or the cap-and-trade
in Quebec and Ontario.”
Politicians like Prime
Minister Trudeau and
Minister Catherine McKenna
“buy into that language,”
according to Jaccard.
Economists’ message to
governments is to “do things
as cheaply as possible, and
emissions price [...] is the
best policy—it is the most
economically efficient policy,”
said Jaccard. But research from
political science and sociology

”

explains “distortions of reality”
when carbon taxes are imposed.
Jaccard’s report drew from
behavioral economics, political
science, and social psychology
to present alternatives to
pure carbon pricing.
BC is often looked at as
a success story of carbon tax
implementation, suggesting it
could happen anywhere. “In
fact, it’s happened nowhere
else,” Jaccard told CBC. Former
BC premier Gordon Campbell
lost 20 points in the polls after
his Liberals introduced the
tax, according to Jaccard.
California is reducing its
emissions through “regulations
that are quite flexible” on car
and fuel retailers, Jaccard said.
This means that car retailers
have to sell a certain percentage
of cars that are electric, or else
pay fines. For example, if Tesla
sells only electric cars, they
can trade their extra sales over
the quota to other retailers
like Chrysler, which sells

primarily gasoline vehicles.

 

As Jaccard writes, flexible
regulation also avoids the
“temptation” for governments
to use emissions pricing
revenues inefficiently.

“The goal of climate policy
is to transition our economy
away from devices that burn
coal, oil, and natural gas.

We already have all of the
technologies and energy forms
needed to achieve near-zero
emissions economy-wide,” the
report said. The transition,
however, will increase costs of
energy services like heating,
vehicle use, and electricity.

Because electricity prices
vary significantly between
provinces and regions, data
showed it would be best
for the federal government
to implement the flexible
regulations along with “modest
assistance” to a few provinces
with high electricity costs.

As stated early on in the
report, “Carbon pricing is a
choice, not a necessity, for

effective emissions reductions.”

Photo courtesy of Province of British Columbia