I moderated a panel of some of the conservative movement’s most knowledgeable climate policy experts at Manning last Saturday. The panel, entitled “Development and Sustainability,” featured Mark Cameron from Canadians for Clean Prosperity, The Hon. Ed Fast (Shadow Minister for Environment and Climate Change), Jeff Gaulin from the Canadian Association of Petroleum Producers, and David McLaughlin, the Government of Manitoba’s Senior Adviser on Climate Change.
One could say everyone knew that carbon pricing was the most efficient way to reduce emissions and there wasn’t really another choice. Our panel established that everyone only knew that because everyone said that. To paraphrase Ronald Reagan, it’s not what Eco-Fiscal acolytes know that’s the problem, it’s what they know that just ain’t so.
The state of the debate on climate policy in the conservative movement had been a choice between the Liberal Eco-Fiscal consensus on pricing carbon or the Conservative position of no carbon tax.
Our panel agreed to step away from this paradigm and have a genuine discussion on climate policy options. We agreed to take the issue of “the science isn’t settled” off the table. We also agreed to take off the table the idea we should support carbon pricing because the polls said it was the only way to get elected. If you have forty five minutes I encourage you to watch this leap forward in conservative policy thinking on carbon pricing. A quick précis follows below:
First the major policy alternatives were discussed:
– Pricing carbon by:
- a tax that fixes the price and lets carbon float
- cap & trade that fixes the carbon and lets the price float
– Pricing carbon through a border adjustment tax which is analogous of using the GST consumption based approach rather than the M&P production sales tax approach.
– Waiting until we are able to convince our major trading partners to enact a co-ordinated approach (in effect what the European Union did).
– Using regulated mandates such as building codes for energy efficiencies.
– Using emissions intensity caps and letting industry innovate to achieve them (the EPA average fleet mileage approach)
– Using incentive based approach:
- Targeted deregulation and tax cuts for local carbon efficiency
- Tax credits and clean tech subsidies
– Using a global approach to emissions by accounting for our global impacts not just local ones, using offset mechanisms in climate agreements
– Using conservation measures to create, grow, and measure carbon sinks.
Our panel discussed how we could use either a smorgasbord approach of mixing the policy approaches, or one of picking one primary policy approach with the other options complimenting.
Secondly, we reviewed efficiency of carbon taxes to reduce carbon. Many pundits and groups have endorsed that pricing of carbon as the most efficient way to reduce emissions because the market likes to avoid taxes.
However, Scandanavia introduced high carbon taxes in the 1990s and Statistics Norway found that they did not have as large effect as had been expected. Further, the Conference Board of Canada published the first estimates of carbon pricing efficiency in reducing emissions. The results are not encouraging, as they found even a $200/tonne carbon tax would only reduce 12MT of emissions even before accounting for leakage.
Its interesting to note one large LNG plant would do more for global emissions than the entire carbon tax policy.
It seems clear there is room for effective and efficient emissions policies that don’t increase taxes.