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Questions remain about carbon tax, economic growth

On Friday last week, Premier Christy Clark released the Climate Leadership Plan. One of the truisms in government is bad news is released on Fridays so that by Monday it will be old news and out of the 24-hour news cycle.
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On Friday last week, Premier Christy Clark released the Climate Leadership Plan.

One of the truisms in government is bad news is released on Fridays so that by Monday it will be old news and out of the 24-hour news cycle. Perhaps the Premier was thinking the Plan might play well as she didn't shy away from the release. However, she did choose August during the Olympics when domestic news is at a low. Certainly her government got roasted by critics on Friday.

The Climate Leadership Plan starts with a message from the Premier saying "British Columbians are proud to be recognized worldwide as leaders in the fight against climate change. We have proven that you can cut emissions while creating jobs."

Have we really proven this?

Consider the government's own data. In 2007 and 2008, the province produced slightly more than 64,000 kilotons of Carbon Dioxide equivalents. (The use of carbon dioxide equivalents is necessary as the province monitors methane, nitric oxide, and other greenhouse gases beyond just carbon dioxide.)

By 2009 - within a single year - our provincial emissions dropped to just over 61,000 kilotons. They have been climbing ever since. So, yes, if you take 2007 and 2015 as benchmark years, the total emissions of our CO2 equivalents is down. But did that have anything to do with the government's carbon tax or policy changes? Wasn't it simply a matter of the global economic collapse in the 2008/09 time period?

That said, one could make the argument the recovery of the provincial economy has not seen emissions return to 2008 levels. However, that presupposes our economy has recovered which is a questionable proposition.

Yes, there are more people at work in the province than prior to 2007 and our GDP is keeping track with Canada as a whole but what is really happening to our economy?

The forest, logging, and related service industries are in a steady decline - from over 26,000 workers in 2001 to fewer than 17,000 today. The total value of housing starts is just getting back to 2007 levels in constant dollars. Manufacturing exports are slowly recovering as well but still not back to pre-2008 levels. However, the service industry is booming - both in terms of dollar value and number of employees, as is construction - provided you are looking for work in the lower mainland.

Part of the picture is a shift in the structure of our economy which arises out of the recession of 2008. It is not hard to see that the British Columbia of the future will not have the same economic drivers as the British Columbia of the past.

This may be a good thing. It might not. But it is doubtful that any of it is tied to the choices the government made about carbon emissions or the introduction of the carbon tax.

Indeed, it would appear the tax has been neither a benefit nor a bust for the province as a whole and when speaking about the economy, the government tends to focus provincially.

A job is a job from a provincial government perspective. It doesn't matter that someone used to have a high paying job working in the forest industry and is now barely making ends meet while working at a big box store. From a statistical point of view, looking at employment numbers, those two positions are the same.

Is Premier Clark right then when she says: "we have proven that you can cut emissions while creating jobs"?

At face value, it would appear so but as they say, the devil is in the details.

Maybe more to the point, who's to say what would have happened to our economy if the carbon tax hadn't been introduced? Maybe we would have led Canada for the past nine years instead of being a middle of the road province.

Or maybe we would have fallen further behind.

There are way too many variables at play in trying to understand the relationship between singular policies and economic outcomes. It is virtually impossible to make a simplistic correlation saying "we have proven that you can cut emissions while creating jobs."

Yes, our emissions fell. Yes, our economy has continued to grow. But is there a causal relationship?

I suspect the answer to that question really depends on where one sits in the political spectrum.

Of course, the one point the government hammers home is this is a "revenue neutral" tax. They will only increase the carbon tax "if every dollar is returned to citizens in the form of tax relief. In that way, we tax the pollution we don't want and use the money for what we do want - money in people's pockets, jobs and opportunity."

But if the tax is really that good for the economy, why not increase it now?