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Carbon tariff: bad. Carbon tax: good.


 

There’s something to the Conservative news release this week slamming Stéphane Dion for proposing a “carbon tariff”—an import penalty on imports from countries that aren’t doing enough to fight climate change.

The Tories point to a recent OECD report warning that such tariffs, which are being mused about in many capitals, might start a damaging trade war. Why would Canada, a big trading nation, want to contribute to a wave of enviro-protectionism?

As far as I can tell, Dion hasn’t talked up the notion of Canada imposing a carbon tariff on the hustings, although he often mentions the risk that Canadian exports might soon face such barriers, imposed by other countries, if we fail to create a credible climate-change regime.

The Liberal green shift policy book, however, does indeed briefly state that “goods from countries that are not pricing carbon will face a tariff reflective of carbon content” when they enter Canada. So fair enough to take a shot at Dion over this dubious proposal.

But since we’re citing the OECD, what does the Paris-based club of modern trading nations have to say more broadly about global warming and carbon taxes?

Well, the 2008 OECD Environmental Outlook report urges “green taxes, efficient water pricing, emissions trading, polluter-pay systems, waste charges, and eliminating environmentally harmful subsidies (e.g. for fossil fuels and agriculture).”

And in case there’s any doubt about what “green taxes” means, the outlook report looks closely at the possibility of a global carbon tax. The OECD’s forecasters did a simulation study to see what it would take to stabilize greenhouse gas emissions—an extraordinarily ambitious aim—and found it could be achieved by a carbon tax equal pegged at half a U.S. per litre of gasoline in 2010, rising to 12 cents in 2030, and about 37 cents in 2050.

This is not an endorsement of the Liberal plan, of course. It’s just another sign among many of how the carbon tax mechanism is widely seen, by all sorts of experts, as a sensible, perhaps indispensable, part of the policy mix if climate change is ever to be seriously addressed. And not “insane.”


 
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