As expected, Justin Trudeau and Jonathan Wilkinson (along with Steven Guilbeault for good measure) announced the next round of climate action to get us to the Paris targets, and it includes a rapidly increasing carbon price, which immediately had conservative premiers like Doug Ford and Jason Kenney go into full meltdown about how this was going to crush the economy and make life unaffordable for people – never mind that it’s designed to be revenue neutral. We even had political show hosts try to frame this issue as “can we afford climate action when the economy is terrible?” which is both irresponsible in that it presents a false binary and a wrong expectation that climate action is costly as opposed to able to provide cost savings. As part of this, a more enhanced rebate for those provinces subject to the federal price was announced so that people will be getting larger quarterly front-loaded rebates so that they can offset their increased costs and make smarter choices and keep more of their money.
This is basically PM Trudeau putting down a clear marker of what it takes to meet our targets for 2030 and beyond. If you want to promise more reductions, you're going to need even more stringent policies. Don't want policies this stringent? You won't meet the targets.
— Andrew Leach (@andrew_leach) December 11, 2020
And, to wrap this up, a little bit of disclosure: while I did not advise specifically on today's announced package (I learned details yesterday), I have provided advice on this file in general to the PM, to cabinet, and to ECCC officials over the past year.
— Andrew Leach (@andrew_leach) December 11, 2020
If you emit one fewer tonne of CO2, you end up with the carbon price savings as your reward. You get the rebate regardless, and it has no effect on the cost savings from reducing (or the cost to you of increasing) emissions. https://t.co/ZNzBDd12Lo
— Andrew Leach (@andrew_leach) December 11, 2020
If the CPC were to make that point and argue for a border adjustment so that the carbon tax is more uniformly applied, I'm pretty sure they'd find many economists willing to support them. https://t.co/Vm2rYwr5sd
— Stephen Gordon (@stephenfgordon) December 11, 2020
Some will frame the higher CTax as "making life more expensive". This is not the case. Given the large rebate, most families will see higher disposable incomes as a result not lower.
See this from @jenwinter_YYC and I some time ago. We'll need to update. https://t.co/UmDuMe6SYd pic.twitter.com/VFnqZNPWyD
— Trevor Tombe (@trevortombe) December 11, 2020
Nice! My quick-and-dirty estimate was pretty bang on! Here's the relevant table from the government report on rebates by province pic.twitter.com/Br51bEJdgE
— Trevor Tombe (@trevortombe) December 11, 2020
https://twitter.com/MikePMoffatt/status/1337535225245655041
Meanwhile, Heather Scoffield declares the plan to be bold, but worries that there is no alternative to a carbon price if the Supreme Court of Canada strikes down the current one (but that ignores that they could impose it by a different legislative mechanism). Paul Wells is also surprised by the audacity of the plan, given that this government likes to try and take the easy route rather than make the politically hard sell of carbon pricing.