Climate change policy: will love prevail?

Author:Richards, John
Position::ELECTION
 
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Among the "real change now" promises of the Liberals is to make a substantial contribution to reduction of Canadian greenhouse gases, to break with the Harper tradition of climate change scepticism and the Chretien-Martin era of climate change symbolism without substance. Given that the UN is convening the next major conference on climate change at the end of November, Trudeau's government cannot ignore this file.

To date (writing in late October), Trudeau is relying on the fragile interprovincial dynamic that emerged over the last year. The provinces have agreed to let a hundred flowers bloom: some will undertake explicit carbon taxing; some will join interstate/interprovincial markets in emissions trading; some will enact tougher sectoral regulations; some will subsidize green innovations. Trudeau has invited most of the Canadian political elite to join the Canadian delegation in Paris. Invitations have been extended to Tom Mulcair, Elizabeth May and interim Tory leader Rona Ambrose, to the premiers and to leaders of national environmental groups.

Relative to Harper's legacy, this is an improvement. And it is natural, in the postelection honeymoon phase, to hope that love will triumph over self-interest. Maybe the fact that summer 2015 was the hottest on record will help. It generated unprecedented forest fires across northern and western Canada--here in Vancouver smoke from the fires intermittently interfered with the pleasure of a Starbucks latte on a thousand outdoor patios. However, being a practitioner of the "dismal science" (economics), my instinct is that love will not triumph; "real change" requires "real change" in financial incentives.

Immodestly, I invite readers to dig up my editorial in the last issue of Inroads on the Tories' two "big ideas." (1) The first of these ideas was to turn Canada into a low-tax country. They succeeded. In terms of taxing effort, Canada fell over the last decade from its rank as a typical OECD country to its present rank at the bottom quartile (three quarters of OECD countries tax more aggressively). For the time being, Canadians still subscribe to this first idea. The evidence? During the election campaign, the Liberals championed a personal tax increase for the "1 per cent" but accompanied it with an offsetting cut for the "middle class." To offset its tax-and-spend reputation, the NDP promised balanced budgets subject to a modest corporate tax increase. It is an understatement to conclude that...

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