(Montreal) Late Tuesday afternoon, 165 economists, professors and department directors from the country’s main universities signed an open letter to correct the facts on “carbon pricing”, because currently, according to them, the public debate on the subject “is not healthy” and is not based on reality.
It was a professor emeritus at Simon Fraser University, Richard George Lipsey, who sent an email to his colleagues across the country on Tuesday asking them to sign the letter.
In the first paragraph of the letter, the man who is an officer of the Order of Canada summarizes the key points of the approach as follows: “As economists, we are concerned about the significant threats linked to climate change. We encourage governments to use economically sound policies to reduce emissions at low cost, address Canadians’ affordability concerns, maintain business competitiveness, and support Canada’s transition to a low-carbon economy. Canada’s carbon pricing policy does all of this,” writes Professor Lipsey.
According to the director of the economics department at Laval University, Stephen Gordon, “it is almost unanimous” among economists that carbon pricing is the best way to fight climate change.
But the Conservative Party of Canada sees things differently. For example, its leader Pierre Poilievre does not miss an opportunity to try to convince voters that this measure does not reduce GHGs, and that it is the main cause of inflation.
Mr. Poilievre calls for the government to simply eliminate carbon pricing.
At no point in the letter do the economists refer to Pierre Poilievre, but they do respond to the CCP leader’s allegations.
Claim: Carbon pricing will not reduce GHG emissions
“Not only does carbon pricing reduce emissions, but it does so at a lower cost than other approaches,” according to economists who indicate that “it is a matter of common sense” because “when something costs more (in this case, fossil fuels), people use less of them, it’s a question of fundamental economics.”
Carbon pricing is the least expensive approach because it allows people and businesses the flexibility to choose the best way to reduce their carbon footprint, reads the letter, which also points out that other methods, ” such as direct regulations tend to be more intrusive and rigid, and cost more.”
Claim: Carbon pricing raises the cost of living and is a major cause of inflation
According to the economics professors who signed the letter, the sharp rise in inflation in recent years has been caused primarily by the pandemic (disrupted supply chains, rapid growth in the money supply and pent-up demand) as well as the war in Ukraine.
PHOTO MARTIN CHAMBERLAND, LA PRESSE ARCHIVES
The sharp increase in inflation in recent years was caused mainly by the pandemic and the war in Ukraine, according to the signatories.
“This is why most advanced countries – whether or not they have a price on carbon – have experienced very similar inflation,” recall the signatories.
They also point out that “most families receive more money in rebates than in carbon pricing, especially those with low and middle incomes.”
Claim: Carbon pricing harms the competitiveness of Canadian businesses
According to the dozens of economists who signed the letter, Canada’s carbon pricing system is designed to “help businesses reduce their emissions at low cost, while remaining competitive in the new low-carbon global economy.”
For sectors that emit the most GHGs, such as oil, steel and cement, there is an “output-based” carbon pricing system, meaning that “companies with the lowest emissions pay less while that the companies with the highest emissions pay more, which provides a strong incentive for all companies to reduce their emissions.”
PHOTO TODD KOROL, REUTERS ARCHIVES
For sectors that emit the most GHGs, such as oil, steel and cement, there is an “outcome-based” carbon pricing system.
Economists point out that the system is designed to keep industries competitive by “ensuring that the price of carbon does not hinder their ability to remain profitable and generate jobs in Canada while being competitive internationally” .
They also believe that carbon pricing stimulates innovation by encouraging the creation and adoption of low-carbon technologies.2which helps Canadian businesses “across all sectors remain competitive in the global transition to a low-carbon economy.”
Claim: Carbon pricing is not necessary
According to the signatories, “the critics are right”, Canada could achieve its GHG reduction objectives while abandoning carbon pricing, but “it would cost much more”.
They point out that the biggest opponents of carbon pricing do not propose alternative policies to reduce GHGs.
“Canada faces many economic challenges. In a resource-scarce world, it seems unwise to abandon carbon pricing, only to replace it with more costly methods of reducing emissions – or, worse yet, take no action to reduce emissions,” it says. read in the letter.
The economists conclude by writing that “carbon pricing is the lowest-cost way to reduce emissions, spur green innovation, and support Canada’s transition to a clean, prosperous economic future.”
Of all federal policies to combat climate change, the carbon tax is both the best and the least understood and if we eliminate it, either we will not be able to reduce our emissions or it will cost us a lot. more expensive. Probably both at the same time.
Charles Séguin, professor at the School of Management Sciences at UQAM
Professor Stephen Gordon added that he felt “disheartened” by the misinformation circulating about carbon pricing.
“There are a lot of things being said about the carbon tax, it is still not well understood among the population, so any attempt to explain why economists are almost unanimous in supporting it, we must do it, because so far it seems that we are losing the battle,” he explained.
The example of acid rain
The director of the economics department at Laval University recalled that it is a system similar to carbon pricing which made it possible to reduce sulfur dioxide (SO2) emissions and thus practically solved the problem of acid rain.
According to Environment Canada, by 2020, sulfur dioxide emissions in Canada and the United States had decreased by 78% and 92%, respectively, compared to 1990 emissions levels.
Called to react to the economists’ letter, the Conservative Party of Canada redirected The Canadian Press to a press release in which the CCP indicates “that instead of providing the relief that Canadians desperately need, Justin Trudeau has decided to increase the carbon tax again on 1er april. This will further increase the cost of living at the worst possible time.”
The PCC press release mentions that “Justin Trudeau’s tax increase is contested by 70% of the population and 70% of prime ministers.”