Confused about carbon pricing? Time to clear the air

Published: September 4, 2019

beautiful green country road Photo by extremechan/Shutterstock

A lot of us cottagers are already seeing the effects of climate change. More frequent wildfires and flooding, invasive species, reduced water quality, more extreme weather events. Despite all the news coverage it’s hard to get the story straight. So let’s clear a few things up:

Why introduce a carbon tax?

First of all, it’s not a tax so much as it’s a price, a pay-to-play for polluters who’ve been contributing to greenhouse gas emissions—which create myriad costs to society—but have mostly been free of financial responsibility for those emissions. What’s more, we’re way beyond the point where we’re debating if climate change is happening and fast moving beyond the point where we have time to prevent all but the most catastrophic consequences. Sounds extreme, but that’s what we’re hearing from climate scientists and the economists and, well, even the insurance agencies. The vast vast majority of whom insist that climate pricing is one of the best ways to begin to get the climate crisis under control.

What’s the difference between carbon pricing and a carbon tax?

Carbon pricing is just another name for the carbon tax.

And though you might not realize it, carbon pricing has already been rolled out across the country, thanks to the Liberals who consider carbon pricing a key part of their strategy to help Canada meet its Paris Climate Agreement commitment.

A lot of us haven’t really noticed, which is part of the point, says Jason Dion, lead researcher for Canada’s Ecofiscal Commision, a non-partisan think tank headquartered in Montreal. “It’s designed to start low and ramp up slowly over time so people will have time to adjust,” he says.

In fact, before carbon pricing was a federal initiative, it was in place in Alberta, British Columbia, Quebec, as well as in the US in the 1980s (which successfully used “pollution pricing” to combat contributors to acid rain).

Carbon pricing is based on the understanding that humans are motivated by costs and savings. By increasing the price on products/services that contribute to greenhouse gas emissions, we are less likely to use those, or to use them as frequently. If the cost of fuel goes up, we are likely to drive less and/or a more fuel-efficient vehicle. If the cost of heating or cooling our homes goes up, we’re more likely to adjust our thermostats, or better insulate our homes. Making changes to reduce our purchase of items with the carbon pricing in place can help us break even or receive a rebate greater than the amount we’ve paid in the tax. What’s more, making changes that reduce our emissions (and our carbon tax) are cost-effective in other ways.

Skeptics of the tax need look no further than British Columbia, which has had the tax in place since 2008. Not only has the province reduced its emissions by as much as 15% more than expected without the tax, the province reports that between 2007 and 2016, its real GDP is up 19%.

“Carbon pricing and a thriving economy are not at odds, and that’s completely consistent with economic research,” says Dion. Indeed, a significant number of economists around the world, including 27 Nobel Laureates, support carbon pricing.

What are carbon offsets? How are they different?

Carbon offsets are a way of mitigating emissions that we’re already creating. It’s completely voluntary whereas the tax is not. Most carbon offsets are purchased to offset the carbon costs of flying, a huge contributor to greenhouse gas emissions. Sandra Piroteala, head of operations for Bullfrog Power, which is affiliated with the offset program Less, calls offsets “an imperfect answer to quite a complicated problem.”

Ideally, we should reduce our emissions in the first place, but for emissions we can’t eliminate, offsets are a way to balance the scales somewhat.

Fortunately, there are a number of organizations that will do the work of calculating and verifying to ensure that your offsets are worth the price. Less, for instance, which is the official offset company for Air Canada, offers an online calculator and a list of its Gold Standard-certified offset programs. Third-party verification is crucial, says Piroteala. You want to know that the program is being monitored and is, in fact, doing what it says it is.

I don’t fly to my cottage but I do drive. Should I buy offsets for my cottage commute?

Buying offsets for car travel is getting pretty “granular,” says Piroteala. A better option, she suggests, is to contribute to Bullfrog Power’s green fuel program, which consumers buy into to increase the amount of biodiesel that’s added to the fuel pool. Any car can take in roughly 5 percent of fuel from biodiesel. Bullfrog purchases biodiesel mostly from discarded restaurant cooking oil, and produces biodiesel to be added to the fuel available at the pumps. It’s a quick and easy way to green your cottage road trip.

And, of course, when it’s time to purchase a new vehicle, choose one that is fuel-efficient as possible while still meeting your needs.

In summary…

As Dion says, “climate change presents a real threat including to Canada’s cottage country, from invasive species to Lyme disease to the ash borer, to a greater risk of wildfires and floods, the risks of not acting are really high. Carbon pricing is a way to do something, to drive down these climate change risks that are real and material to Canadian cottagers.”

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