A carbon tax is not without some appeal: polluters pay for the damage they cause. That’s the theory.
The New York Times—not known as a bastion of conservative thought—wrote, “It’s [carbon tax] probably the most glamorous—and certainly the most unlikely—use of the tax code since Al Capone got hooked for tax evasion.”
But does it work? Has it worked anywhere else? If you listen to the Liberals, NDP and the Green Party, the answer is an unqualified “yes” on both counts. As with most things those parties tell us, however, there is more to the story than they let on.
On the question of “Does it work?” the better answer is, yes sometimes. As to the second question “Has it worked anywhere else?” the better answer is, again, a qualified one: yes, in Denmark—but it has been less than a success elsewhere.
Since about 1991, carbon tax in one form or other has been implemented in Sweden, Denmark, Norway, Finland, the Netherlands, Italy, the United Kingdom and New Zealand. In the United Kingdom, for example, tax now represents two-thirds of the pump price for gasoline (ouch). However, I cannot find evidence that indicates that the tax has led to large declines in carbon dioxide emissions in most of these countries. In fact, in the case of Norway, emissions have actually increased by 43 percent per capita.
Denmark is one country in which carbon taxes have led to a large decrease in emissions—per capita carbon dioxide emissions were nearly 15 percent lower in 2005 than in 1990.
Denmark’s secret: tax the industrial emission of carbon and return the revenue to industry through subsidies for research and investment in alternative energy sources, cleaner-burning fuel, carbon-capture technologies and other environmental innovations. Does this sound even remotely like any carbon tax plan being proposed in Canada—I don’t think so.
Denmark kept true to its core philosophy: reducing emissions was the goal, therefore, you impose a carbon tax, but you never want to collect it. In other words, if you want lower emissions, the goal of a carbon tax is to prompt producers to change their behavior, not to allow them to continue polluting while handing over cash to the government.
It will not be easy for a Canadian government to do as Denmark has. How do you prevent policy makers from turning the tax into a cash cow, as seems to be the primary objective of the Liberals and the Greens?
Stéphane Dion says that he guarantees that the carbon tax will be tax neutral. But the last tax guarantee I heard was from the Ontario arm of the Liberal Party. They made a “written” guarantee during an election to not raise taxes, but once in office promptly implemented a new tax.
Regardless of their reason, and even assuming they had a good one at the time, it’s now five years later, the Ontario budget has been in surplus, yet the tax is still imposed. And do I need to mention the federal Liberals’ promise to dump the GST? Their deputy prime minister resigned her seat in parliament over that lie.
Any promise that the carbon tax will be tax neutral is a canard.
Mr. Dion promises that the average family earning $60,000 combined will receive $1,300 back in tax under the Green Shift. In my estimation, a family of two to four individuals including children will incur far more than $1,300 in costs of gasoline, home heating, cooking, and other essentials due directly to the imposition of a Liberal-style carbon tax.
Think of it, in the UK they pay two-thirds of the pump price for gasoline—this alone would amount to more than $1,300 a year for the average family.
Then, where will the reminder of the tax go? Income redistribution and more expensive social programs like universal day care, that’s where.
Let's be very clear, Green Shift is less about reducing green house gas and more about financing a socialist agenda, which includes massive income redistribution.
God help the Canadian middle class.