You Say Tomehto; I say Tomahto
There have been claims that the federal carbon pricing backstop will harm small business, among others. Nothing could be further from the truth. Our earlier articles on the IGES sustainable lifestyles report clearly reminds us how climate change is already a huge financial cost to society. The social and health costs are even greater. The health care and especially small business sectors have had significant opportunities, and still do, to reduce their carbon emissions, through efficiency, technological, structural, financial and other mechanisms. Further, failure to take deep actions today, as was regularly warned for the last three decades, will cost more in the future. We are now in that earlier future. Waiting another year, let alone a decade, will substantially raise these costs, and add untold suffering and pain to many millions of Ontarians.
[if !supportEmptyParas] [endif]
As we explained in an earlier article, the federal carbon pollution pricing backstop itself is comprised of a fuel charge that reflects a cost of $20 per tonne of CO2 equivalent in 2019, with steadily-rising rates to effectively reduce greenhouse gas emissions. This is done with the intention that greenhouse gas emissions will lower. The carbon tax is revenue neutral, meaning the money that contributes to the tax is returned to individuals and families when they file their taxes. Industries that reported more than 50 kilotonnes of CO2 equivalent in 2014 or a subsequent year to the Greenhouse Gas Reporting Program fall under an output-based pricing system which prescribes greenhouse gas emission limits that if exceeded demand compensation for polluting but also exempts them from imposed fuel charges.
[if !supportEmptyParas] [endif]
While smaller industries can apply to be a part of the output-priced emissions system, this policy leaves a lot of room for improvement because it permits large industries to advantageously position these polluters to maintain global trading partnerships, placing economics in front of the environment. In other words, this system simply levels the global playing field to the lowest common denominator, allowing large Canadian polluters to continue externalising their pollution costs, distorting both global markets and consumer information. That said, the emissions limit imposed by the output-based pricing system is still better than nothing, and will help to ensure Canada reduces its greenhouse gas emissions.
[if !supportEmptyParas] [endif]
Strangely, despite the political rhetoric the current provincial government is claiming, the current provincial government in Ontario is introducing a carbon tax on large emitters that exceed a yet-to-be-established provincial standard. Claims that the federal carbon pricing program will distort the Canadian market are without merit, since this new program in Ontario may level the playing field between small and large emitters. Nevertheless, the devil is in the detail, and this as-yet-to-be-revealed intensity-based system has been criticised as ineffective precisely because it manages the intensity of emissions, rather than the emissions themself. Why is the Ontario government costing taxpayers by fighting carbon pollution pricing on the one hand and imposing a similar program on the other hand? No one can be certain, but it is consistent with the political cognitive dissonance climate change generates.