I am an environmentalist. That is, I’m someone who believes in sustainable sustainability—prudent environmentalism that makes sense and is in harmony with a person’s lifestyle and economics. I suspect that most of us fit this description with only a few outliers on the ends of the spectrum.
Most of us want to enjoy a lifestyle of relative convenience and ease, but not at the expense of destroying Mother Earth. We want to buy goods that have been responsibly produced, shipped, and marketed to us. We are prepared to make compromises and even reasonable sacrifices.
From this perspective, I’m trying to make sense of the various carbon tax proposals being debated right now.
Carbon taxes have had small to moderate success around the globe in convincing industries to rethink their production plans for the environmental good. This is not difficult to comprehend, as any business faced with rising costs looks for a more cost-effective model. That’s just good business sense.
When a business producing large carbon outputs is taxed, it passes this extra cost on to the customer. Ultimately, the tax is always paid by Joe Public, the end user, who must then decide if the higher price is palatable or whether they should make different buying decisions.
This is the first reason that carbon taxing hasn’t achieved wide success: the end result is that the cost of a product increases in a non-competitive marketplace. When an oil refinery is taxed and passes this on to the consumer, the consumer has limited opportunities to make a more environmentally friendly choice. Sure, we may make slight adjustments to our driving habits. If we’re in the process of shopping for a car, we may prioritize fuel economy a little higher. But the long-term impact is negligible, as we have seen that fuel usage fluctuates very little based on the price. When prices go up, usage doesn’t go down much.
Largely this is due to the second reason: what happens to the taxes collected on carbon? The government’s media releases don’t give us much detail. But if history is any indicator, we’ll see the creation of a new agency or government program, or the beefing up of an existing one, with administration carving off a share in the name of environmentalism. Will these programs and this new pool of money be directed towards changing our long-term consumer habits? If we believe the intent professed by our government, this is the bar by which we must measure their success. If the new money is simply directed towards wider “green” initiatives—which may be good but not produce long-term change—then we should hold the government to account.
Manitobans now get to ponder Premier Pallister’s refusal to sign on to the federal carbon pricing plan, opting instead for a made in Manitoba solution. If we view his proposal with the same critical lens, additional questions arise.
Most notably, why not go with the federal plan? If Manitoba really produces very little of the carbon load (less than five percent), what negative impact is produced by adopting the federal plan? And what advantage is there to picking a fight with the federal government that may ultimately end up in a legal battle?
Our provincial government touts “fairness” as their reason. And yet we still don’t know where the money will go, and right now it appears to be nothing more than a way to inject more revenue into a strained provincial budget. Maybe this is just a good opportunity for them to blame a problem on the feds when they are later “forced” to meet the additional tonnage charge in 2022.
Ultimately, as a taxpayer, I find myself annoyed by this shell game, and as an environmentalist I am discouraged. I don’t think it’s reasonable to expect a full and detailed disclosure of the plans for these taxes, but a basic overview of the government’s intentions would be in order. A good many taxes have been levied with good intentions, and ultimately they end up filtered into general government revenues to prop up the budget.
We are not averse to paying for value when we make consumer choices, be it a service or a product. We should expect the same for our tax “choices.”
It’s time to ask the right questions about the government’s end goals rather than just accept the rhetoric presented and be fooled by the red herring of intergovernmental conflict.
