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Why this economist says it’s time for conservatives to stop worrying and learn to love carbon taxes

Aren’t conservatives supposed to *like* market-based policies?

For many conservatives today, few phrases in politics are as noxious as “carbon tax.”

Since the Harper government started scaremongering about “job-killing carbon taxes” back in 2012, you’d be hard-pressed to find an elected member of a conservative party anywhere in the country willing to back the policy in public.

But some conservatively-minded academics like Christopher Ragan – Director at the Max Bell School of Public Policy and Chair of Canada’s Ecofiscal Commission – think this attitude is a big mistake.

PressProgress was recently on hand in Saskatoon to speak with Ragan about carbon taxes and the conversation around them, in Saskatchewan and across the country.

Saskatchewan Premier Scott Moe recently said: “Saskatchewan is making every effort to reduce our emissions…It is our province that will reduce our emissions by 11 per cent in the coming years.” What do you think of the plan to reduce by 11% and what will be the consequence of it?

I don’t know how the 11% reduction is going to happen, but if it is going to happen through regulation, then it’s going to happen at a higher cost than it needed. There ought to be two objectives here. It’s not just to reduce greenhouse gas emissions at any cost. We ought to flip that on its head and say we need to reduce emissions and do it at the lowest possible cost.

And that means it’s going to be a carbon price or, it’s going to be a regulation designed to mimic a carbon price. You might be able to that, but the problem with regulations is that they require a huge amount of information by the government about the private sector, information that the private sector often doesn’t have.  It’s very difficult to design these regulations except in a very blunt way that ends up making them high-cost. So I don’t know where the 11% is going to come from, but if it is not coming from a carbon price – and I think that the current plan is not carbon priced based – then I suspect it is going to be at a higher cost. 

We are here in Saskatchewan and when you think of the past premier Brad Wall and the current premier Scott Moe and their opposition to something like carbon pricing, what’s going on there? If it makes economic sense why aren’t they in favour of adopting it?

One of the things that puzzles me is that people who consider themselves conservative ought to see an opportunity here to both protect the environment as they claim that they want to, but also to reduce the taxes most of them have vowed to eliminate.

This is what EcoFiscal is all about, using price-based market based methods to improve environmental outcomes because we think it is also the best way economically. Environmental protection is a classic example of where the conservatives ought to be taking the lead, where they ought to be saying: “Let’s use a price-based approach. Let’s return the revenues in the form of income tax cuts. It’s not about bigger government.” This is a classic conservative songbook.

But they are not singing it..

They are not doing it. So why aren’t they doing it? I’m just a simple prairie boy and I’m confused…I look at Scott Moe, Jason Kenney, and Doug Ford and it’s even true with the federal Conservatives: none of them are denying that we need to reduce greenhouse gases, but they are against a carbon tax. So my question is: what do they have up their sleeves? I suspect whatever plan they have it is going to cost us more.

You’ve said that you are a conservative but you no longer recognize what the conservatives are. What do you mean by that?

I’ve long been somebody who believes in the power of markets, and that policy should recognize and work with the power of markets wherever possible. I don’t think that markets are always and everywhere wonderful, but I think they are very efficient way to organize economic life. To me that is a perfectly sensible point of view and there’s no nastiness or lack of compassion in it.

Increasingly I see among people who call themselves conservatives in this country and others…I see less of a commitment to relatively free markets, I see growing nastiness and often a lack of compassion, and in some cases an unwillingness to recognize what the facts appear to be. And those three things to me are different than it used to be.

Photo: J. Phagan. Used under Creative Commons licence. 

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