Clear the Air

Climate change has been called everything from a hellscape to a hoax. Both characterizations are political dead ends: the former because it feeds a sense of futility (“What’s the point?”) and the latter because it excuses business as usual (“Drill, baby, drill”). Between these extremes, however, is the promise that we can take steps to lower emissions and adapt to a hotter planet. After all, hope comes in doing, and it can be found in small, everyday acts, like driving less or eating local, and in large-scale public policies, including a price, or a tax, on carbon.

No one says pricing carbon will solve the climate emergency, because it won’t — there being no magic bullet. As the name suggests, a carbon tax is just that: a tax on carbon. If you want to burn coal, oil, or natural gas, it’s going to cost you, at the smokestack or at the pump. But industry can lower its tax burden by investing in efficiencies and economies, and consumers who don’t want to pay more to fill their tank can buy a smaller car or even an EV. In other words, a carbon tax is a market signal designed to nudge behaviour in a low-carbon direction.

If that nudge is simple in theory, it’s difficult in practice. How do you set a price that is both effective and reasonable? How quickly do you raise that price over time? How do you ensure that an industry doesn’t lose market share when its competition in other jurisdictions doesn’t face a similar cost? How do you protect citizens who can least afford a new tax? And how do you sell it to voters who see only higher prices on their home heating bills? Thomas F. Pedersen takes aim at such questions in a new book on what he calls Canada’s “most consequential policy debate.” Long story short, he knows his field, and he knows how to communicate it, making The Carbon Tax Question an accessible read on an important topic.

An emeritus professor at the University of Victoria and an expert in the impact of climate change on oceans — including ocean acidification, which should keep all of us up at night — Pedersen has no interest in hellscape visions or in nonsense about deep-state hoaxes. Optimistic and forward-looking, he’s focused on solutions. As the first executive director of the Pacific Institute for Climate Solutions, Pedersen drew on the language of opportunity when he championed new approaches in energy, transportation, and forestry. “People often hear about the doom and gloom of climate change,” he has said, “but they don’t hear enough about the opportunities — to do things better, to generate new economic opportunities and to move toward a more sustainable society. We have all the pieces to do that.”

A big piece of the puzzle — of that more sustainable society — is carbon pricing. To this end, British Columbia became the first jurisdiction in North America to implement a carbon tax in 2008, when Gordon Campbell, a Liberal premier and an unlikely climate hero, levied $10 per tonne on (almost all) emissions in the province. Although it was set to rise by $5 per year, it was also designed to be revenue neutral, meaning it would be offset by reductions to other taxes. Meanwhile, lower-income households were promised a provincial climate action rebate to be paid quarterly with the federal goods and services tax credit.

Not everyone was pleased. Industry worried about competitiveness, voters grumbled about higher gas prices, MLAs fretted about the next election, and some environmentalists said the policy didn’t go far enough. Of course, as soon as the tax was announced, it was politicized. The provincial NDP, an otherwise centre-left party with a broad commitment to the environment, insisted that it was an unfair money grab. It wasn’t, although that didn’t stop the New Democrats from calling on the premier to “axe the tax.” To his credit, Campbell stuck to his guns, exercising real political leadership.

From 2008 to 2009, politics in British Columbia saw some peculiar contortions, to say the least. The right had tacked left when the conservative Liberals introduced the carbon tax, then a new and bold policy instrument; and the left tacked right when the New Democrats promised to scrap it, briefly finding a bedfellow in the Canadian Taxpayers Federation. According to the political scientist Jamie Lawson, the New Democrats were prepared to risk votes in urban environmental circles to court votes in resource communities. In Pedersen’s words, it was a “particularly odd time in BC’s odd political history,” a history that includes a cast of . . . well, unique characters: William Smith, who changed his name to Amor De Cosmos, meaning “lover of the universe”; W. A. C. “Wacky” Bennett, who built a political dynasty on his outsize personality; and Bill Vander Zalm, known as “the Zalm,” who literally lived in Fantasy Gardens, a religious theme park.

Despite its politicization, the carbon tax survived the 2009 provincial election. But when Christy Clark succeeded Campbell in 2011, after he was forced to resign over a broken HST promise and a simmering scandal over missing emails, she halted the planned increase, claiming it was necessary to make life more affordable and industry more competitive. Clark didn’t axe the tax, exactly, but she did rob it of its impact over time. With lovely understatement, Pedersen describes Clark’s decision as an “unwelcome” policy direction.

With access to some of the key players and a knack for sharing just the right amount of detail, Pedersen tells a compelling story. Unfortunately, he loses the thread with three chapters on Australian climate politics. Yes, Australia is an infuriating case study in dysfunctional climate policy, and the execrable Tony Abbott — a climate change agnostic who became prime minister in 2013 on an axe-the-tax platform — deserves all of the aspersions Pedersen casts on him (though I’m not sure it’s fair to canines to liken him to an “obnoxious yapping dog”). But comparing British Columbia, a subnational jurisdiction, with Australia, a national one, is like comparing apples and oranges. Yes, they’re both fruit, but they’re different kinds of fruit.

Turning to the federal carbon price, Pedersen blames Justin Trudeau for his failure to clearly and consistently explain it, especially its revenue neutrality, and for allowing Pierre Poilievre to fill the mediascape with a simple and unambiguous promise to axe what he dismisses as, borrowing from Abbott, a “great big tax on everything.” Maybe — but I’m not convinced that poor comms is entirely to blame.

Trudeau has faced a relentless chorus of premiers who hate what they see as a job-killing tax, who have campaigned against it, and who have taken him to court over it. Doug Ford even mandated that every single fuel pump in Ontario carry a large, bright, red-white-and-blue sticker reminding drivers, and thus voters, of the federal carbon price and its impact on the cost of gasoline. An Ontario court struck down the Progressive Conservatives’ law in 2020, concluding that it was unconstitutional to require private retailers, on behalf of one level of government, to “stick it to” another level of government. By then, the seeds of distrust had been sown in Ontario’s electorate. (The federal carbon price and its many subplots will be the subject of graduate student research for the foreseeable future, making it the tax that launched a thousand theses, perhaps including one called “The Sticker and the Damage Done,” on Ford’s shameless politicization of carbon pricing.)

Meanwhile, the former New Brunswick premier Blaine Higgs never hid his contempt for carbon pricing. When pressed for an alternative solution to the climate crisis, he offered LNG, insisting that natural gas is a transition fuel to a greener future. It isn’t, as Pedersen makes clear, but that didn’t stop the Progressive Conservatives in Fredericton. Why let science get in the way of making Saint John, just down the road, an LNG export terminal? Higgs’s attempt to turn the recent provincial election into a referendum on Trudeau’s “failed, job-killing, paycheque-destroying policies” didn’t work. In turning the federal carbon price into a provincial third rail, he kept Susan Holt, now the Liberal premier, from touching it. In fact, she deliberately avoided the topic and, for that matter, climate change. (The English-language leaders’ debate was a master class in climate silence: if we all agree not to talk about it, maybe it will go away.)

I’ll end where Thomas Pedersen began, in British Columbia, where an NDP premier has vowed to scrap the provincial carbon tax once Ottawa scraps the federal backstop that is the Greenhouse Gas Pollution Pricing Act. If Pierre Poilievre is elected, and if David Eby fulfills his promise, any future edition of The Carbon Tax Question will have to be titled The Carbon Tax Answer, and that answer will be no.