STIRLING: The folly of economists who like Trudeau's carbon tax

On the same day the Bank of Canada issued a ‘fire alarm’ emergency on Canada’s declining productivity, a large contingent of economists issued an Open Letter in support of Canada’s now very unpopular carbon tax and rebate policy. Carbon taxes are set to jump 23% on April 1, 2024, from $65/tonne to $80/tonne. Seven premiers and 70% of Canadians opposed this jump. Dan Kelly of the Canadian Federation of Independent Businesses (CFIB) tweeted that the federal government has failed to rebate carbon taxes to small businesses for five years; now 82% of small businesses oppose the carbon tax.Those pontificating on carbon taxes from their ivory towers never have to make payroll, while juggling spiralling prices due to carbon taxes and regulations.The pro-carbon tax economists make an astounding claim: “Not only does carbon pricing reduce emissions, but it does so at a lower cost than other approaches.”Canada’s carbon tax, as an economic instrument, is not ‘pure’ (meaning fully consistent with economic theory) as the economists would have us believe. A 'pure' carbon tax is one without the imposition of other taxes and regulations designed to achieve the same goal. As Robert Lyman, retired energy economist, has explained, Canada’s greenhouse gas reduction regime has layered on some 400 different regulations, incentives — exactly the onerous, heavy-handed ‘instruments’ that the economists say would be much more expensive than a carbon tax.In reality, we have both a poorly planned carbon tax and hundreds of much more expensive regulations! Not only that, but fuel is essential, as are the hundreds of energy services based on hydrocarbons in a modern economy. There are no viable ‘low-carbon’ alternatives at scale.It is curious that so many economists in Canada seem to be unaware of this.Examples abound of the federal government dropping juicy multi-billion-dollar climate policies subsidies on large companies such as Stellantis, Northvolt and Volkswagen for EV battery manufacturing plants (now totaling $44 billion). Meanwhile, the average citizen has to navigate his or her way through the 400 greenhouse gas (GHG) reduction measures.Small business is the lifeblood of democracy and the sector that can jumpstart the economy in the nimblest manner. Carbon tax and GHG regulations are destroying them. If the Bank of Canada says it is time to ‘break the glass’ on the fire alarm — then unleash the powerhouse of small business entrepreneurs. Axe the tax.Ivory tower economists are blind to this.Citing the Bank of Canada, the economists claim the carbon tax has ‘a negligible impact on overall inflation.’ Professor Sylvain Charlebois’ inquiry to BoC revealed that the bank’s evaluation was overly narrow, in fact “carbon tax contributes to a substantial 16% of our current inflation rate.”The pro-carbon tax economists inhabit a fantasy land where they infer that a carbon tax will reduce emissions and thus prevent the “risk and severity of natural disturbances, such as fires, floods and severe storms.” In fact, that is not the finding of the Physical Sciences report of the Intergovernmental Panel on Climate Change (IPCC) which does not attribute extreme weather or wildfire to human-caused climate change. Likewise, the Parliamentary Budget Officer’s report of November 2022 found that the impact of climate change on Canada’s economy would be negligible. The pro-carbon tax economists claim that wildfires, floods and severe storms might cost our economy $34 billion by 2030 — when the federal government has already spent or committed more than $200 billion on climate change initiatives. Huh? How would a reduction in Canada’s 1.5% of global emissions change that? Further, if wildfire is the risk, why did the federal government grant BC $43 million for wildfire management, while granting three foreign EV manufacturers $44 billion to build plants for polluting, non-recyclable batteries?There’s no emerging global low-carbon economy. The US EIA shows upward trends in oil, natural gas and coal.How can an $80/tonne carbon tax make Canada competitive with China or Mexico where the carbon tax is $4/tonne to $6/tonne? And meanwhile China emits in one month what Canada emits in 20 months. And the pro-carbon tax economists have the gall to say, “(the) federal (carbon tax) took effect in 2019, Canada’s GHG emissions have fallen by almost 8%.” During COVID lockdowns and bankruptcies! Hello!Climate science has long shown that carbon dioxide is not the control knob that can fine-tune climate. This point is beautifully driven home in Martin Durkin’s “Climate: The Movie (The Cold Truth).” We’re actually in a cold climate period. Global boiling, like the ‘climate emergency’ is a marketing ploy to push for a global carbon (tax) and ultimately a global carbon tax law) as Trudeau and Guilbeault promoted at UN Climate Week last September, shamelessly exploiting Canada’s catastrophic wildfire season.This only would benefit green crony capitalists and Big Green philanthropies.Canada cannot ‘hit our climate targets’ with either the carbon tax or the 400 other regulations. As the left leaning Canadian Centre for Policy Alternatives analysis has shown, Canada can only meet NetZero targets through degrowth and deprivation. Hardly the ‘clean and prosperous economic future’ the pro-carbon tax academics promise.

STIRLING: The folly of economists who like Trudeau's carbon tax

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