Chambers of Commerce Dither over Cap and Trade

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by Steve May

(SUDBURY)  Dr. David Robinson, Laurentian University Professor of Economics and Economics for Northern Ontario blogger, is calling on Ontario’s Chambers of Commerce to support the only really workable solution for carbon pricing.

Dr. David Robinson“What we want is a painless way to price carbon,” says Robinson. “And we have one.  It’s called carbon fee and dividend.  It’s simple, cheap to implement, and it solves almost all of the problems that Ontario’s Chambers of Commerce are complaining about.”

Twenty Chambers of Commerce from around Ontario, including the Sault Ste. Marie Chamber of Commerce, recently came together to urge the Province to defer implementing the cap and trade scheme.  Citing the Auditor General’s report that indicates cap and trade will cost businesses and households about $8 billion between 2017 and 2020, the coalition of Chambers expressed concerns related to the provincial economy.  However, in their press release, the Chambers failed to mention “climate change”, or identify a preferred means of pricing carbon.

“Dithering isn’t an option,” says Robinson. “I’m glad that Ontario’s Chambers of Commerce have finally realized that the provincial Cap and Trade policy is a bundle of mistakes.  But if calling for more talk about fixing the unfixable is the best they can do, the Chambers should stop giving advice and start studying the solution.

“There is no way we can back away from carbon pricing,” says Robinson. “People are already dying from the effects of climate change. The Chambers need to take seriously the cost of further delay for the rest of the world and for our own children.”

“Since the Chambers are concerned about the province’s economy, they should be looking for real, workable proposals for carbon pricing,” says Robinson. “Luckily, economists like me are around to help out.  We can show then that a carbon tax is a better way to price carbon.  We can show them how easy it is to convert the Province’s Cap and Trade system to a carbon tax. The Province’s dirty little secret is that the only effective part of their system is already a carbon tax. When the Province sells permits to the gas distributors or fuel companies it is just collecting an indirect tax on consumers.

“But after collecting the tax, they have to give the money back to consumers,” says Robinson. “That is the trick that makes it all work. Then consumers can buy just as much as they could before the tax.  The tax encourages people to shift to low-carbon sources, and they get to re-spend any tax they do pay.”

The Chambers of Commerce also cited the election of Donald Trump to the United States presidency as a reason for Ontario to delay action on Cap and Trade.

“They say they are afraid that, if Canada puts a tax on our goods and Donald Trump doesn’t, it will hurt our industries,” says Robinson. “But now that the federal government is at the table with a framework to price carbon pollution nationally, protecting ourselves from Trump will be easy.  We just level the playing field through border tax adjustments.

“When Alberta ships oil to the USA, we give the company back any tax we’ve collected,” says Robinson.  “We don’t try to tax the carbon content of what people consume in other countries.

“We Canadians will pay a tax for any carbon emitted in producing what we consume, no matter where it comes from – and we get the money put back into our pockets. We don’t penalize our producers if the politicians in other countries are not as smart as ours are.’’

“The Chambers were right to knock the provincial Cap and Trade scheme,” says Robinson. “They were wildly wrong to think that Cap and Trade can be fixed. Since we have a better system available and it is actually easier to implement than any Cap and Trade scheme, the Chambers really need to finish doing their homework.   Let’s address the Chamber’s concerns with a carbon tax, a 100% dividend for consumers, and border tax adjustments. We don’t have time for more dithering.”