Unpopularity of carbon taxes probed by panel of experts

Panelists at a Haskayne School of Business event on carbon taxes agreed action must be taken on climate change, but differed on whether such taxes are the answer.

The issue has been polarized by a wave of populism that has swept the world, said Dr. Aseem Prakash, PhD, keynote speaker at the recent Global Energy Challenge: Carbon Tax Unpopularity from France to Washington State. Although Washington is a part of the U.S. where “liberal politicians are getting elected by huge margins,” carbon tax initiatives in the state are failing to gain approval, he said.

Prakash, who is the director of the Center for Environmental Politics at the University of Washington, further pointed to what happened in France. After criticizing the U.S. for withdrawing from the Paris climate accord, French president Emmanuel Macron was confronted by France’s Yellow Jacket protests over fuel tax hikes, forcing him to roll back his own climate policy.

Such policies must be “for everybody, including people who work in coal mining or in fossil fuel — and until their interests are accounted for, they will oppose” them, said Prakash, adding the word “tax” tends to be a taboo word in politics, including Alberta.

“You call it a carbon levy. You don’t call it a carbon tax officially,” he said, drawing laughter from the audience of 94 people.

Not a left or right issue

A lively discussion moderated by Dr. Harrie Vredenburg, PhD, Suncor Chair in Strategy and Sustainability at Haskayne, followed the keynote address. Experts from the Fraser Institute, the Pembina Institute and the School of Public Policy offered a diversity of perspectives on climate policy.

The introduction of any tax tends to provoke opposition, said panellist Dr. Trevor Tombe, PhD, who is an associate professor of economics. A federal Progressive Conservative government fell from power in the early 1990s after launching the GST, although GST represented an overall cut in taxes, he said. Yet the GST survives until today.

About a decade ago, a Progressive Conservative government in Alberta implemented the first ”fairly broad” carbon price in North America — a carbon tax on large emitters “that still exists to this day,” he said. Such taxes are “not a left or a right issue” and indeed “are a lot more popular than we appreciate,” said Tombe, who is also a research fellow at the University of Calgary’s School of Public Policy.

Panelist Dr. Kenneth Green, PhD, resident scholar and chair in energy and environmental studies at the Fraser Institute, said he believed in climate change, but added the risks were “mostly hydrological” and could be mitigated using things such as conventional engineering. He said he was “opposed to carbon taxes” and that it has not been shown they are more efficient than regulations in reducing emissions.

In any case, Green doesn’t believe “a world with millions of people living in energy poverty can afford to significantly reduce global greenhouse gas emissions, and will require a few decades of research before we can actually consider that.”

People get 'suspicious'

But as a senior fellow at the Pembina Institute, panellist Dr. Sara Hastings-Simon, PhD, said carbon taxes can accomplish multiple goals. Besides their primary purpose of reducing emissions, revenues can be used for everything from addressing deficits to promoting innovation, she said.

“But what happens as a result of this is that it actually becomes quite confusing when you go to communicate it,” said Hastings-Simon, who is also a research fellow at the University of Calgary’s Global Research Initiative. People are being asked to hold different ideas at once, causing them to become “very suspicious,” she said.

Such suspicions mean academics must be moral leaders about climate change, said Prakash, adding he would be paying the carbon offset for his Calgary trip.