The conservative case for a carbon tax

National Post ^ | 2008-07-08 | Jonathan Kay

[Clive]

When the federal Liberals lose the next election and Stephane Dion is forced to resign, the words "Green Shift" will no doubt appear prominently in the first paragraph or two of his political obituary. As a cautionary tale, it will rank right up there with John Tory's disastrous religious school funding proposal in Ontario. Ironically, the legacy of this self-described green zealot will be to kill serious environmentalism in this country for years to come.

That's too bad, because the concept of a carbon tax actually makes sense --even, dare I say, to conservatives.

I am talking here about a pure carbon tax -- a per-chemical-unit surcharge applied at the retail level to the sale of gasoline, home heating oil, natural gas, coal or any other fuel that yields carbon dioxide. Consider the benefits, from a traditional, conservative perspective.

1) A carbon tax can actually make government smaller. Right now, Western governments control and tax the use of carbon fuels through a bewildering variety of economic interventions. These include everything from fleet-wide fuel economy standards for auto manufacturers, to ethanol subsidies, to small-car purchase rebates, to alternative-power research grants. By monetizing the social cost of carbon usage in a generic way, a carbon tax could replace all of these programs through one simple microeconomic mechanism. Overnight, a whole army of green lobbyists, bureaucrats and environmental consultants could be turned away from the public trough.

2) A carbon tax is a (relatively) flat tax. Since a carbon tax is essentially a consumption tax, it would help chip away at the massive bias against the wealthy contained in our "progressive" income tax system. That's because wealthy people typically spend a lower percentage of their income on consumption than do the poor and middle-class. If a carbon tax were applied in a truly revenue-neutral way -- with revenues offset by across-the-board reductions in income tax or, better yet, capital gains and business taxes -- Canada would be a nation far more welcoming to the successful and the talented.

3) A carbon tax can help create a more socially humane, family-friendly society. Many people casually associate the word "conservative" with unfettered capitalism. That is a fallacy. A true conservative in the Edmund Burke mould is suspicious of any revolutionary creed that challenges the established qualities of a humane society, especially a creed -- such as unbridled materialism -- that corrodes family life and human spirituality.

The auto-dependant, air-conditioned, eight-lane suburban lifestyle made possible by cheap oil has created a nightmare not only for our environment, but also for family dynamics and civil society as a whole. Millions of Canadian fathers and mothers now spend little time with their families -- because their early mornings and evenings are spent alone, in metal boxes, fighting traffic.

Modern suburban developments have no sidewalks -- because no one walks. Nor does anyone spend time mingling in mixed-use, high-density commercial areas. They are too busy navigating that other alienating creature of cheap oil: the mega-mall.

A carbon tax would improve society along conservative lines by encouraging people to live closer to their places of work. It would discourage the inhabitation of large, impersonal swathes of tract housing in favour of higher-density apartments and townhouses located closer to parks, schools and downtown shops -- the traditional breeding grounds of civil society.

4) A carbon tax would fight terrorism and rogue power. This point cannot be repeated often enough -- especially for the benefit of those red-meat conservatives cruising around with right-wing bumper stickers affixed to the back of their eight-cylinder Suburbans and Escalades: When we pay US$140 a barrel for oil, we are enriching some of the most dangerous regimes on Earth -- including Saudi Arabia, Venezuela and Iran. At worst, this means we are literally funding the nukes and terrorists that threaten to blow up Tel Aviv and London. At best, it means sucking up to the likes of Vladimir Putin and Saudi Arabia's royal family. Simply put, it is impossible to maintain any semblance of a principled foreign policy when your #1 enemies are also the pushers feeding your oil addiction. A carbon tax wouldn't end this dependency entirely, but it could significantly move the West's effective demand curve for oil

downward. And it would mean that a greater share of the West's energy needs could be satisfied by homegrown sources. Billions in windfall profits would be redirected from the coffers of Hugo Chavez and Mahmoud Ahmadinejad to those of George W. Bush and Stephen Harper.

All this is to say that Dion wasn't crazy to think that a case could be made for a carbon tax -- in principle, at least. Unfortunately, the Liberal leader lost his nerve. The plan he came up with is so full of spurious, politically inspired hedges and add-ons that it squanders all of the above-listed benefits.

This is why, ultimately, Dion will deserve to be sacked: His proposal is controversial and divisive without actually being courageous or principled.

The most obvious flaw in Dion's plan is that it would grandfather in all the goodies the Liberals have implemented or promised in the past -- including incentive funds for renewable power, home retrofits, "green manufacturing," "low-carbon farm and forestry practices" and so on. Dion also has larded up his plan with poverty-fighting provisions, including new child and employment credits. So much for fiscal streamlining.

A further problem is that Dion didn't have the guts to slap the tax where it would do the most good: on you and me.

Carbon taxes are effective only if they influence our decisions about where and how we live -- since that, ultimately, is what drives a market economy. But looking Canadians in the eye and telling them that they have to buy smaller houses and cars is tough. So instead, Dion's Green Shift is all about soaking Canadian "polluters" -- i. e., the upstream companies that produce the products and energy you and I need.

True, the $40 tax to be levied on each tonne of greenhouse gas emissions would largely get passed on to consumers. But because the tax won't be levied at the most logical place -- the retail level -- it won't affect the carbon inputs embedded in foreign imports. So, while shafting Alberta, it does little to inconvenience Saudi sheikhs or Russia's state-run oil company.

In the same cop-out vein, the plan contains a "Green Rural Credit" to soften the blow for people who live in rural and northern areas, where energy needs are higher. But if the very point of a carbon tax is to motivate people to live a lower carbon lifestyle, why would you simultaneously subsidize their decision to live in the land of frigid cold, ATVs and pickup trucks? Either you want people to use less carbon or you don't.

Dion's plan is a disaster because it carries all of the massive political costs associated with the label "carbon tax" -- without actually delivering the associated benefits. Whether you stand on the left or right, it's hard not to see this as a firing offence.

jkay@nationalpost.com

[Clive]

The problem is that a carbon tax as now conceived is "in addition to" rather than "instead of". It is a tax grab, pure and simple, tarted up in politically correct rhetoric.

[BuffaloJack]

Carbon is not the problem. The problem is Socialism and its need to take your money and give it to others.

[Tarpon]

So what is the current federal and state gas tax if not a
‘carbon tax’

Pay more in taxes and government will pretend to control the weather — A hoax anyone with a working brain can see through.

[xcamel]

Carbon Scam Ping - (POGW) Oxymoron of the day award...

[marron]

Its just a flavor-of-the-month tax. For the tax-addicted, any reason is a good reason to tax. You don’t even have to know what you’re going to do with the money, something will present itself, something always does.

Medieval medicos used bleeding for everything. If the patient recovered, its because you bled him sufficiently. If he dies, maybe you didn’t bleed him enough quickly enough.

[Always Right]

The problem is that a carbon tax as now conceived is "in addition to" rather than "instead of".

Exactly, and even if it was a replacement there are serious problems with the idea.

[radioman]

"a carbon tax could replace all of these programs through one simple microeconomic mechanism."
lol...
Pure snake oil. It could but it won't. We've never had one tax replace another. They are always a tax on top of a tax.

[Grimmy]

I wonder how many BTUs we could get from roasting a Green Zealot? That is a renewable energy source right there.

[weegee]

“Modern suburban developments have no sidewalks “

BS. However modern urban renewal projects have no yards. 3 story tinderboxes that maximize population density.

[from occupied ga]

That's too bad, because the concept of a carbon tax actually makes sense --even, dare I say, to conservatives.

Nope. Taxes only make sense to those who are too lazy to work for what they want and desire to use the power of the state to take it from others.

[weegee]

When we pay US$140 a barrel for oil, we are enriching some of the most dangerous regimes on Earth -- including Saudi Arabia, Venezuela and Iran. At worst, this means we are literally funding the nukes and terrorists that threaten to blow up Tel Aviv and London.

Whether we buy their oil or Europe or China or India buy it, the oil will be sold.

The oil is NOT evil. The people pumping it have evil goals. Pretending that they do not exist is not the answer.

The ticking timebomb must be defused. Taxing ticking clocks is not the answer.

[Babu]

“The conservative case for a carbon tax”

— oxymoron, by a maroon. There is no conservative case for a new scam tax.

[Sacajaweau]

TAX ON BREATHING....About as smart as ethanol...

[Maelstorm]

The problem with carbon taxes is that they are stupid and unnecessary. You might as well accept the premise of the left.
I personally think a pure conservative position on taxes should be one that does not support the use of taxes as a method of social engineering. A person should not be threatened with higher taxes because they choose to avail themselves of a freedom that is not illegal or offered tax breaks because they behave like good children for the bureaucrats. The citizen is the ruler and should not be satisfied with being treated or allowing their fellow citizens to be treated like children.

[webheart]

jonathan Kay should either quit smoking marijuana, or quit writing after smoking marijuana. None of this makes any sense unless you are stoned.

[USFRIENDINVICTORIA]

I agree with everything in the article.

Carbon taxes are a “least worst” solution to global warming. (There can be no “best” solution to a nonexistent problem.)

Even if they were a tax grab, they would be worth the price, if they prevented any more bans, regulations, and other tools of eco-fascism from being imposed. At least a carbon tax leaves people with some freedom to make individual choices.

Carbon taxes don't have to be a tax grab (I know, I know — I'm skeptical too). The nominally “Liberal” government of British Columbia (it's really an anti-socialist coalition of right-of-centre parties) recently imposed a “revenue neutral” carbon tax. By law (the same law that created the tax) the carbon tax has to be “revenue neutral”. Everyone received an advance rebate this year & the income tax rates were reduced for everyone. It remains a “progressive tax” — rather than a flat tax, because low income people get bigger rebates, or larger tax reductions. The best part — the socialist NDP has come out against it & they are losing the support of their greenies. The tax also woke up a lot of people who were lulled into thinking that we could reduce our “carbon footprint” without doing more than switching to twisty light-bulbs, and banning SUVs.

[glide625]

It’s going to happen whether we like it or not. That’s why my wife and I are investigating retirement to Mexico. The thing I find amusing is that all of these sustainable development/carbon tax/anti-suburban types hype up the benefits of a lifestyle of living in densly developed urban areas where everyone is crammed into Soviet era apt. blocks. I guess that works in low crime, relatively homogenous population countries like Canada, but in a salad bowl country like the U.S. where hatred/violence breaks down along racial lines thus creating a remarkably unstable, volitile social scene, this is a formula for a complete breakdown in civil society. I really don’t understand that. What’s stranger is it’s numerous supporters come out of California where rival race based gangs are fighting for control of huge swathes of territory the gov’t no longer even attempts to control.

[Citizen Tom Paine]

I live in upper NY State. I would dearly love to use loss heating oil and propane each year. Does anyone know of an oil furnace that will heat my house on a few gallons per heating season. I am going to spend at least 2 to 4 thousand dollars this winter to heat a winterized house.

It short increasing efficiency is good for the consumer. However, now I think there is little wiggle room because efficiencies now are near 90 %. Many dollars spent on efficiency research will produce small increases in heating efficiency.IMHO

[theBuckwheat]

If we accept that CO2 emissions must be reduced, then we only get to debate the means. But AFAIK, the entire issue of CO2 HAS YET TO BE PROVED to my satisfaction. At the very least there is a substantial body of evidence, often posted in graph form on FR that CO2 lags ambient temperature, not lead it.

Tellingly, when wonderful advances in alternate fuels such as algae are announced, those who fret the most about CO2 emissions are silent, or only clap for a short time with one hand. In particular algae-based biofuels take the issue of CO2 off the table, for they recycle 100% of CO2 in the fuel. Why is this not good news worthy of much cheering?

This is proof enough for me that there is another agenda at work, and when CO2 must be reduced no matter what, even as India and China are given a pass and even as countries in Europe miss their Kyoto targets without any penalty, then the agenda must be to suppress the prosperity and power of the US.

[weegee]

fighting for control of huge swathes of territory the gov’t no longer even attempts to control.

Yep. Government is failing us and is literally cutting and running from their responsibility to maintain order.

They have partnered with the Nation of Islam in at least one community to "keep the peace".