Last week, the prime minister met with the premiers to discuss climate change.
This was not an earth-shattering meeting. It was just the first of what will likely be many discussions to come.
The prime minister and premiers did emerge from the meeting with a consensus and the decisions to work towards a national climate change plan.
This plan will include a mechanism for the pricing of carbon.
In other words, more work will need to be done.
The question of carbon pricing is an interesting subject. After all, it is not about the cost of acquisition of the carbon content but the ultimate disposal of the carbon after utilization. In the case of gasoline, for example, carbon pricing is supposed to account for the carbon monoxide and carbon dioxide emissions resulting from combustion.
But what exactly is the price supposed to represent? Is it the cost to clean up the carbon emissions? The cost associated with damage caused by the emissions? The cost incurred from the perceived harm from the emissions?
At $30 per tonne, what exactly is the money supposed to be paying for?
The B.C. government has declared their carbon tax "revenue neutral."
It isn't used for general revenue, but returned to low income families and senior citizens in the form of a subsidy to pay for the higher cost of fuel.
They are collecting revenue with one hand and giving it back with the other.
That would not seem to be a very efficient process but if that is all they were doing with the revenue, it might be acceptable to some people.
However, the majority of the money is handed back to corporations in the form of tax subsidies. The middle class is paying for the production of carbon dioxide generated by consumer goods and the revenue is being handed out to corporations to do with as they please. I don't mind buying goods from corporations, but I resent having my taxes inflate their bottom line.
That said, the question of what to do with the money generated from either a carbon tax or a cap-and-trade system has not been answered nationally. Indeed, which system we should employ is still in limbo.
A carbon tax is generally viewed as being simpler to implement and can provide a stable tax base with a measure of predictability.
It has the advantage of being directed at the ultimate consumer. But a carbon tax affects all consumers regardless of income and this can seriously impact low income earners. Further, tax revenue is often not used for the purposes it was collected.
A cap-and-trade system is politically more palatable as it is addressed at the big industries generating large quantities of emissions. It has a floating price point which should allow for the price of carbon to be set by the market and not by the government.
But a cap-and-trade system can also stifle innovation and development of new low carbon alternatives.
There is little advantage to innovation if the price of carbon is not sufficient.
Put simply, if the cost of a new technology is $60 per tonne, it is cheaper to simply play the cap-and-trade game.
Either system has the potential to significantly impact the consumption of fossil fuel - provided no part of the collected carbon revenue can be or is returned to any party involved in proportion to the amount collected from that party.
This simply negates the benefits of the pricing policy.
Over the next few months our federal, provincial, and territorial officials will work to draft a plan of action before meeting again in October. What the pricing mechanism will be remains to be seen and will likely be a point of considerable contention.
However, I would suggest the other key areas emerging out of last week's conference might be a better place to focus their energy.
What clean technology exists? And can Canada find a market for innovation and research which will lead to the development of good paying Canadian jobs? I would suggest the answer is "yes" but it will require using some of the money from carbon pricing to pay for the start-up costs.
Are their specific opportunities to slash emissions? At what cost? I would suggest not.
Most industries have already been working very hard in this area. After all, the consumption of carbon has a price, too. Decreasing demand for carbon increases profitability and corporations don't pass up any chances of improving the bottom line.
Do we have a strategy for dealing with a changing climate and severe weather events? I would suggest the answer is no, and we are not likely to have one as no one is really sure what the future holds.
One thing is certain: as the world gets warmer, more people are going to want to move north.
