A lot has been written in Canada about the recently-revealed Conservative Plan to Combat Climate Change.
Most of that (including my own first take) focused on the carbon tax part of the Conservative Party of Canada’s plan, which is just another rhetorically packaged tax-and-rebate scheme that has become the norm for carbon-tax implementation.
Governments levy a tax on greenhouse gas (GHG) emissions in some form and rebate some of the revenue to the public in some other form, generally oblique and opaque. Direct rebates seem unpopular across the political spectrum for some reason.
The carbon tax aspect of the new plan may be newsworthy because of the political optics surrounding the embrace of taxes. But the rest of the plan is more interesting from a public policy standpoint because it also embraces most of the same non-tax-climate policy ideas that have been extensively shown to be ineffective at reducing greenhouse gas emissions (much less influencing the climate).
They are economically inefficient in terms of achieving cost-minimization (in line with a lower tax economy), economically harmful and, to use a popular term, inequitable. They impose costs on people generally without regard to that person’s contribution to the unwanted activity of generating greenhouse gas emissions.
Worse still, many of these non-tax carbon policies are also regressive, impacting lower-income people more than they do those who are better off. We have space here for only four examples, but there are more.
Electric vehicle mandates
Setting aside the general understanding that it’s bad public policy for the government to be picking technological winners and losers in market economies (even mixed-market economies), electric vehicle mandates are inherently inequitable and regressive.
They use tax dollars to heavily subsidize the costs of purchasing electric vehicles primarily for the economically better off, at the cost of raising transportation costs for those who can’t afford still-pricey boutique electric cars that are mostly of use for white-collar commuters in highly developed countries.
Worse still, they export the environmental nightmare that accompanies the production of critical elements used in electric car manufacture to developing economies plagued by lax environmental standards and horrific child-labour economies.
Low-carbon fuel standards
A low-carbon fuel standard is basically just another form of carbon tax: a government is going to mandate that manufacturers produce goods using more expensive forms of energy than are otherwise available, passing that cost on to the consumer.
Worse still, like other schemes that create markets for offset credits, manufacturers can purchase credits instead of buying the higher-priced low-carbon fuels.
The government creates a massive arena for fraud, graft and corruption, as has been seen with carbon offsets and energy production.
National energy strategy
Modern industry is virtually all about transforming resources with energy, as it always has been. Perhaps it has gone unnoticed by our governing class, but Canada has a rather wide variety of climates, industrial capabilities and access to energy resources, including access to trade routes (pipelines) and proximity to nearby lower-cost import.
Situations like Canada’s call for more use of local markets to develop and distribute power at a price and with the reliability characteristics people need in any given place, not less.
Government simply can’t process the knowledge of place and time in a competent way to manage a power grid that spans a vast continent of wildly different climatic and energy-resource regions.
The new Conservative plan also embraces the idea of having the government promote the construction of more energy-efficient buildings and to encourage consumers to make their homes more energy-efficient.
Again, experience shows these ideas perform badly in the market, with program costs far exceeding any benefits of reduced energy use in commercial or residential markets. Costs exceed benefits, the ultimate fail of bad public policy.
The new Conservative plan is remarkably similar to pretty much every past plan to combat climate change, whether dressed in conservative or liberal phrasing.
Underneath the can-do language of determination to control climate change are a raft of what has consistently been shown to constitute bad public policy. They waste money, are economically inequitable and in many cases do more harm than good to the very things they claim to be protecting: the global climate and human well-being.
Kenneth Green is a research associate at the Frontier Centre for Public Policy.
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