During the federal election campaign, economists across Canada felt immense frustration at the way some of the political parties distorted basic economics to criticize the Liberal Party's Green Shift and the platform of the Green Party. Outrageous statements such as "the carbon tax will cause a recession and thereby break up the country" or "a cap-and-trade system only affects big polluters and won't change prices for Canadian households" are patently false and prevent a thoughtful discussion of the challenges of adopting meaningful policies to reduce greenhouse gas emissions. Rather than simply vent, Ross Finnie of the University of Ottawa, David Green of the University of British Columbia and I composed the following letter pointing out the basic economics of carbon pricing versus other regulatory approaches and sent it to colleagues across Canada. We were heartened by the response. To paraphrase from a recent column by Jeffrey Simpson, it is hard to get economists to agree on what day of the week it is, let alone come together to strongly support carbon pricing to protect the environment. The principles the letter endorses can help guide policy development at the federal level in Canada. Now that the election is over, we hope our leaders can agree on a meaningful greenhouse gas policy that includes an efficient and effective carbon-pricing component to help us significantly reduce greenhouse gas emissions.
Director, Graduate Public Policy Program
Simon Fraser University
This letter, signed by 255 economists, was released during the federal election campaign. Further details are available at www.econ-environment.ca
One of the few issues on which most economists agree is the need for public policy to protect the environment. Why so much agreement? Because in the absence of policy, individuals generally don't take the environmental consequences of their actions into account, and the result is "market failure" and excessive levels of pollution. Environmental degradation diminishes the quality of life for all of us. And without a healthy environment, we can't sustain a healthy economy. We, the undersigned, have therefore joined together to express our shared views on effective policies to address climate change.
We are non-partisan and will undoubtedly be supporting different parties in this election. Our goal is not to criticize or praise one party or another, but rather to offer our collective views, as economists, to help inform public debate on these matters at a critical time--during a federal election campaign.
What needs to be done
While Canada clearly cannot solve the climate change problem on its own, we need to do our part, and this requires immediate and...