Destructive Canada Is Introducing a Big Honking Carbon Tax

Why are conservatives objecting to Milton Friedman's very conservative idea?

Destructive Canada Is Introducing a Big Honking Carbon Tax GettyImages-515544148-b416c461b5964f61a21a1c388c1670c5

Destructive Canada Is Introducing a Big Honking Carbon Tax GettyImages-515544148-b416c461b5964f61a21a1c388c1670c5

The Canadian government, led by Prime Minister Justin Trudeau, has just introduced a new plan for a strengthened climate plan that has many interesting features, including billions in energy upgrades, subsidies for electric vehicles, and grid modernization.

But the biggest and most controversial item is the dramatic increase in the carbon tax, ratcheting up every year until it is C$170 (US$132.72) per tonne of carbon by 2030, and would probably increase the price of gas by 25%.1 They call it a "price on pollution."

Carbon taxes are based on the amount of carbon released, so the tax on burning coal would be higher than that on gasoline, which is higher than natural gas. In the Canadian proposal, the funds collected are then rebated back to the taxpayers. The majority of people will actually get more money back than they pay in the tax.1

The basic idea is an old economic principle: as things get more expensive, people look for alternatives that are cheaper, whether it is electric cars instead of gas-powered ones, or heat pumps instead of furnaces, or just driving less. As the Globe and Mail editorial board notes,

"This tax is also like no other because its goal is to change behavior, not to raise revenues. The aim is for people to do such a good job of reducing emissions, and thereby avoiding the tax, that revenues eventually spiral to zero. The carbon tax’s goal is its own obsolescence."

Conservative politicians were immediately outraged, with the Ontario Premier calling it the worst thing you could ever see. This is odd, because carbon and pollution taxes are a very conservative idea. Writing in National Affairs, the very conservative magazine published by the very conservative American Enterprise Institute, Spencer Banzhaf describes The Conservative Roots of Carbon Pricing, noting that "various proposals to tax or price pollution have, from their beginnings, been championed by conservatives and their libertarian allies," including such right-of-center folk heroes as William F. Buckley, Jr., and Milton Friedman, who wrote in his book "Free to Choose" that pricing pollution through "effluent charges" were the best way to deal with the problem. Friedman said:

"Most economists agree that a far better way to control pollution than the present method of specific regulation and supervision is to introduce market discipline by imposing effluent charges. For example, instead of requiring firms to erect specific kinds of waste disposal plants or to achieve a specified level of water quality...impose a tax of a specified amount per unit of effluent discharged. That way, the firm would have an incentive to use the cheapest way to keep down the effluent."

.https://www.treehugger.com/canada-introducing-big-honking-carbon-tax-5092199.

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Destructive Canada Is Introducing a Big Honking Carbon Tax

Destructive Canada Is Introducing a Big Honking Carbon Tax

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