Pierre Poilievre is leading anti-carbon tax rallies around the country, ginning up support for an old-fashioned tax revolt. In response, Justin Trudeau went to Calgary and trumpeted — believe it or not! — his love of free markets. [emphasis, links added]
After explaining the economic logic of using a carbon tax to reduce greenhouse gases, the prime minister slammed regulatory approaches, which, he said, “all involve the heavy hand of government. I prefer a cleaner solution, a market-based solution and that is, if you’re behaving in a way that causes pollution, you should pay.”
He added that the Conservatives would instead rely on the “heavy hand of government through regulation and subsidies to pick winners and losers in the economy as opposed to trusting the market.”
Amen to all that!
But someone should tell Trudeau that his government’s Emission Reduction Plan mainly consists of heavy-handed regulations, subsidies, mandates, and winner-picking grants.
Within its 240 pages, one does find a carbon tax. But also 139 additional policies, including Clean Fuels Regulations, an electric vehicle mandate that will ban gasoline cars by 2035, aggressive fuel economy standards that will hike such cars’ cost in the meantime, costly new emission targets specifically for oil and gas, agriculture, heavy industry and waste management, onerous new energy efficiency requirements both for new buildings and renovations of existing buildings, new electricity grid requirements, and page upon page of subsidy funds for “clean technology” firms and other would-be winners in the sunlit uplands of the new green economy.
Does Trudeau oppose any of that? Hardly. However, the economic logic of a carbon tax only applies when it is used on its own.
Trudeau defends the carbon tax today in Alberta. Says he's opposed to a state-directed economy favoured by Tories.
Says they want to use the "heavy hand of government through regulation and subsidies to pick winners and losers in the economy as opposed to trusting the market."… pic.twitter.com/BBjY1Jvrnn— Noé Chartier (@NChartierET) March 13, 2024
He doesn’t get to boast about the elegance of market mechanisms on behalf of a policy package that starts with a price signal and then destroys it with a massive regulatory apparatus.
Trudeau also tried to warm his Alberta audience to the carbon tax by invoking the menace of mild weather and forest fires.
In fairness, it was an unusual February in Calgary. The month began with a week of above-zero temperatures, hitting five degrees Celsius at one point, then there was a brief cold snap before Valentine’s Day, then the daytime highs soared to the low teens for nine days, and the month ended with soupy above-zero conditions. Weird.
Oops, that was 1981.
This year was weirder: February highs were above zero for 25 out of 28 days, eight of which were even above 10 degrees C.
Oops again, that was 1991.
Granted, February 2024 also had its mild patches, but not like the old days.
Of course, back then warm weather was just weather. Now it’s a climate emergency and Canadians demand action.
Except they don’t want to pay for it, which is the main problem for politicians when trying to come up with a climate policy that’s both effective and affordable.
You can only have one of those two. Take your pick: effective or affordable, affordable or effective. In practice, of course, we typically end up zero for two, with both [ineffective and unaffordable policies].
You can claim your policy will yield deep decarbonization while boosting the economy, which almost all politicians in every Western country have spent decades doing. But it’s not true.
With current technology, affordable policies yield only small temporary emission reductions.
Population and economic growth swamp their effects over time, which is why mainstream economists have long argued that while we can eliminate some low-value emissions, for the most part, we will just have to live with climate change.
Trying to stop it would cost far more than it’s worth.
Meanwhile, the policy pantomime continues. Poilievre’s anti-carbon tax rallies are popular, but what happens after we axe the tax?
If he plans to replace it with regulatory measures aimed at achieving the same emission cuts, he really should tell his rallygoers that what he has in mind will hit them even harder than the tax they’re so keen to scrap.
Or does he have the courage to do the sensible thing and follow the mainstream economics advice?
If he wants to be honest with Canadians, he must explain that the affordable options will not get us to the Paris target, let alone to net zero, and even if they did, what Canada does will have no effect on the global climate because we’re such small players.
Maybe new technologies will appear over the next decade that change the economics, but until that day we’re better off fixing our growth problems, getting the cost of living down, and continuing to be resilient to all the weather variations Canadians have always faced.
Read more at Financial Post
All correct Ross but how to you fight IRRANIONAL FEAR??