Canada’s climate plan is worse than no climate plan – CTF

by Aaron Wudrick, Federal Director

It was the right call. In the mercurial waters of Trump-style trade negotiations, the real litmus test for Canada was never going to be about getting a better deal. Rather, it was about whether the deal Canada could get would be better than no deal at all.

Having successfully applied this sound reasoning to trade negotiation, the Trudeau government should deploy it once again when it comes to another area where international co-operation is essential: climate policy.

As a collective action problem that knows no borders, climate change can only be effectively tackled on a global level. This necessarily means that the impact Canada can have is unavoidably dependent on the actions taken by other countries. In particular, large emitters such as China, the United States, the European Union, India, Russia and Japan (who collectively account for approximately two-thirds of total global emissions) matter the most. It is also the reason that international forums, including the annual United Nations Climate Change conferences are central to coordinating climate change mitigation strategies.

The obvious problem, of course, is that these forums haven’t yet yielded anything approaching a sufficient strategy. The much-vaunted 2015 Paris Agreement contains no enforcement mechanism for targets, which makes it highly unlikely that they will be met. The United States – which alone accounts for 15 per cent of global emissions – has pulled out of the agreement altogether, while China (25 per cent of global emissions) may be able to hit them only because their agreed national target was feeble in the first place. This reflects the biggest problem with the Paris Agreement: national emissions targets were set such that even if every country were to keep its commitments, total emissions reductions would still fall far short of the amount needed to sufficiently limit global temperature increases.

No less an authority than the United Nations itself has sounded the alarm, releasing a report in early October that suggested a carbon tax of up to US$5,500 per ton ($7,183 CDN) may be necessary to limit temperature increases to 1.5 degrees. If that sounds extreme, it’s because it is.

A tax of this size would work out to an eye-popping $834 of carbon tax on a 50-litre gas fill-up, or around 143 times higher than the maximum $50 per ton the Trudeau government plans to impose on noncompliant provinces by 2022.

But surely doing something is better than nothing, critics insist. We can’t just sit on our hands. But to be blunt, that depends on whether what we do will make any difference, in which case sitting on our hands might be as good a pastime as any.

Applying the same reasoning as in NAFTA, the test for Canada’s climate plan should be whether the benefits to Canada outweigh the costs. And it’s clear the carbon tax being planned by the Trudeau government does not meet this test.

The costs include squeezing the budget of Canadian families in the form of higher prices as well as making Canada a less competitive place to do business – especially with respect to our neighbours to the south.

And the benefits? Canada is not on pace to hit even its own (insufficient) Paris commitments. Based on the latest UN report, to do its share to keep temperature increases to 1.5 degrees, Canada would need to go much further and cut its current level of emissions in half in just 12 years.

Some back-of-the-napkin math illustrates the impossibility of Canada trying to stop climate change in the absence of coordinated worldwide action. The UN report suggests that a global emissions reduction of 45 per cent by 2030 is needed, amounting to approximately 24 billion tons. Canada’s share would represent around 200 million tons – or just 0.8 per cent of world emissions.

This is the argument Canadian carbon taxers are making: that securing 0.8 per cent of global reductions is worth punishing millions of Canadians and destroying Canada’s economic competitiveness. They are asking Canadians to make massive, tangible sacrifices in their everyday lives – not to “save the planet,” but to achieve a mathematical rounding error that will be rendered meaningless in the highly probable event that most other countries don’t also follow.

Canadian carbon tax crusaders need to put their money where their mouths are. If they’re truly committed to arresting climate change, they shouldn’t be wasting time grandstanding on a $50 tax that does zilch for the climate while picking Canadians’ pockets. They should either go all-in and acknowledge massively higher carbon taxes are necessary to achieve lofty emissions goals while working overtime to get a global deal that will actually stop climate change – or admit they’re the ones content to sit on their hands.

For more information call:

Aaron Wudrick, CTF Federal Director            Cell: 613-295-8409

Email: awudrick@taxpayer.com                   Twitter: @awudrick