Oil execs to Harper: Price our carbon, already!

Canada has been slipping in world rankings in some key areas: environmental protection, of course, but also competitiveness and innovation. The only thing propping up our competitive business environment is over a decade of corporate tax cuts, making us one of the lowest corporate-tax regimes in the developed world, but feeding our massive deficit and growing national debt.

Are there other ways we could become more competitive, spur innovation, create jobs and (dare to dream) even address environmental issues at the same time? Amazingly, a single measure would accomplish all three, recommended by the OECD, the NRTEE, environmentalists, economists, oil companies, and now even tar sands developers. In fact, only one person stands in the way of this miracle measure: Prime Minister Stephen Harper.

That measure? A carbon price. By putting a fee on carbon emissions, or imposing a cap and auctioning permits, all actors in our economy (businesses, individuals, institutions) would be encouraged to innovate in providing goods and services at a lower energy cost. One thing that hurts our competitiveness is that we are among the worst energy-wasters in the world! While energy consumption can drive a higher lifestyle, wasting energy helps no-one.

By refunding all the revenue through a dividend or tax cuts, a carbon price puts no overall burden on us. That’s why the $30 per tonne carbon tax shift in BC hasn’t done any harm to their economy. In fact, while a carbon price squeezes margins for the worst polluters, it rewards any company that gets more efficient, and puts money in the pocket of citizens who avoid waste. Globally, the effective price of carbon already shows that we have a long way to go in raising our carbon price before we would become uncompetitive as an energy exporter.

Beyond how a carbon price creates jobs and saves resources within Canada, it’s also going to be a key element of our international trade strategy. Other nations are already looking askance at our tar sands product, even before we build massive new pipelines to export it. Major campaigns are under way to exclude this carbon-intensive fuel (even leading to bizarre reactionary PR campaigns trying to spin dirty bitumen as “ethical oil”).

Putting a price on carbon will bring transparency and legitimacy to our energy industry and head off potential trade barriers, as has been noted by fossil energy companies around the world, including in Canada. As our own national Chamber of Commerce notes, it will also improve the efficiency of our tax system and enhance our competitiveness.

Furthermore, with the federal government signalling long term infrastructure spending grants in the spring budget, we need a carbon price to ensure that this long-lasting infrastructure is built to the highest energy-efficiency standards to extend those savings over coming decades, and not lock in wasteful technologies or approaches.

Even Mr. Harper has been consistent, saying as early as 2007 and as recently as this week that he supports the “polluter pay” principle. So enough hot air, just do it!

Published as my Root Issues column in the Barrie Examiner under the title "Time for us to start pushing polluter pay principle"

Erich Jacoby-Hawkins is a director of Living Green and the Robert Schalkenbach Foundation.