Writing in the National Post late last year, Randall Denley poked fun at the federal Liberal carbon tax exempting Quebec because of that province’s far less onerous cap and trade program, adding snidely “Of course, Quebecers are missing out on the Liberals’ deal of a lifetime: a tax that actually gives you back more than you have paid.” He then went on to cite a statistic of vital importance to the real state of the climate debate. “The top-five best-selling vehicles in Canada are all pickup trucks or SUVS.” In short, Canadians are not convinced that global warming is a crisis requiring them to change their behaviour or even other people’s. Which ought to make alarmists uneasy. They seemed to be winning hands down, with no politician in the land daring to challenge “the science”. And yet it turns out a great many people were just pretending to be convinced so as to avoid being shamed and bullied. Privately they’re not buying it.
For instance we are certainly not buying electric vehicles, figuratively or literally. Denley writes that “in Ontario, they are only about one per cent of total sales.” And it’s not just transportation. “Eighty-one per cent of Ontarians heat their homes with natural gas. Those are the choices that people make, knowing all they do about climate change and even with a carbon tax already in effect.” Which surely makes you wonder what people really “know” about climate, that is, how much they believe the hype.
As Denley pointed out, the notion of a tax that pays you “is the essential selling point of Prime Minister Justin Trudeau’s latest climate change charade” because “Imposing thousands of dollars of costs on Canadian households would be political suicide without the rebate.” But “What is surprising is that otherwise intelligent people are accepting the government’s assertion that the cost-free carbon tax will massively change consumer behaviour and achieve the promised emissions reduction.”
Maybe they aren’t. Some architects and advocates for the policy seem to have the proverbially dangerous little knowledge of how economics works, because if climate change is an “existential crisis”, which isn’t even what existential means, it is necessary to bring in a carbon tax that prices fossil fuels out of reach, which is impossible no matter how much the levy is per tonne if you just hand all the money back to people to buy gas with. As Denley also observes, “Existing federal and provincial gas taxes cost Ontarians just over 40 cents per litre. The changes Trudeau just announced will add 27.6 cents between 2022 and 2030…. Even when fully implemented in 2030, the cost of gasoline in Ontario will still be less than the $1.405 per litre Torontonians were paying (and still filling up on) in 2014, barring a substantial increase in the price of the commodity itself. The real threat for Ontario comes on the day when a future federal government, after careful reflection, determines that a plan that costs you nothing will produce nothing. Then, with great sadness and regret, it will phase out the rebate part of the carbon tax.”
Perhaps they will. But they might be driven to do something more drastic, because the problem with carbon taxes, for all their basic economic elegance, is that they don’t just have to be large enough to be politically damaging to have an impact. Given the difficulty, a word here meaning primarily the enormous cost, of getting around and heating your house by any other method (for instance, you have to retrofit or replace your furnace), even a carbon tax that did leave us a lot poorer might have a very limited impact on our decisions. And paradoxically the fact that we are still a very wealthy society despite, one might say, the best efforts of governments across a wide range of files to squander what we produce, we will be able to afford gasoline by sacrificing other things until the cost becomes very high indeed. So it may be necessary to ban internal combustion engines and gas furnaces, resorting to regulatory means because a simple pricing scheme turns out, in practice, not to be so simple.
Doing so risks political and economic catastrophe. For instance Britain’s new climate strategy may make it literally illegal to sell millions of existing houses because they won’t have a sufficiently appealing “Energy Performance Certificate”. When voters discover this measure they are liable to be displeased. But alarmist politicians who have repeatedly insisted that drastic action is pain-free, right down to a tax that gives you back more than you paid in, will have great difficulty defending or even explaining such policies if they don’t start thinking and talking a bit more clearly now.