A new order of things the case for pricing carbon.

Author:Richards, John

There were respectable reasons to vote against the Liberals in the recent federal election. Doing so because of their carbon taxing proposals was not one of them. That many Canadians voted against Stephane Dion's "Green Shift" and that both Jack Layton and Stephen Harper thought it electorally advantageous to oppose carbon taxing says something deeply depressing about Canadians' refusal to grapple with a major international problem.

For two decades, Canadian politicians have combined earnest rhetoric on the threat posed by climate change with a refusal to endorse any effective policy response. We Canadians pride ourselves on having signed the Kyoto Accord and deride the Americans for refusing to do so. But what is our record on curtailing emissions? The honest answer is "abysmal." The year 1990 is the benchmark from which the accord measures countries' progress. Since then, emissions in Canada have risen at a faster rate than the world average, faster than in the United States-where emissions grew at a rate well below the world average. No one expects Canada to meet its Kyoto target of 6 per cent below 1990 levels by 2012.

Over the last decade, federal and provincial politicians have tried unsuccessfully to reconcile the imperative to act with the reluctance of Canadian consumers to change energy consumption patterns or Canadian producers to invest in less carbon-intensive ways of supplying energy. Governments have announced targets for reduced emissions-targets far in the future that require no immediate change in corporate or individual behaviour. (On this theme, I invite readers to turn to the contribution to this section by Mark Jaccard, Nic Rivers and Jotham Peters.) Simultaneously, as a salve to our collective conscience, governments have devised ad hoc "green" subsidies and have financed rhetorical appeals to take the bus, turn down the thermostat and so on. (Rick Mercer's "one tonne challenge" television ads come to mind.)

If you don't, why should we?

Canada is one country among many. And as figures 1-3 illustrate, it is not alone in having an abysmal emissions report card. In 2005, the top ten emitters-Canada ranked seventh were responsible for two thirds of all emissions, with more than 40 per cent attributable to just two countries, the United States and China. That year, the United States ranked first and China second, but since 2005 China's rapid industrial growth has inverted this ranking: it now exceeds the United States in total emissions.


In economists' jargon, public goods are those whose services cannot be denied to anyone once they are in place (think lighthouses). Since no one can be denied access to public goods, private firms cannot readily charge a price for their use, and markets undersupply them. An adequate supply requires government intervention. A stable earth atmosphere, a necessity for survival of life on the planet, is the ultimate public good. But denying access to the atmosphere as a "dump" for greenhouse gases is an exceedingly difficult collective coordination problem for governments to tackle. Reducing world emissions to levels consistent with acceptable--it still disruptive--temperature increases will require international diplomacy of a high order.

It is tempting for Canada to enter into this diplomacy with a self-serving reading of figures 1 and 2, and to ignore the implication of figure 3. Using figure 1, we can make the argument that, at 2 per cent, our emissions are a small share of the...

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