On the way from Dubai to Quebec, I reflect on the highlights of my stay at COP28, my fourteenth. I have been able to attend multiple conferences on many subjects, and identifying what emerges is not so easy. However, one thing struck me: the fact that manufacturers are calling for a carbon tax.
Not just hearing from multiple stakeholders — including the CEO of Rio Tinto and a representative from Suncor — that they need and want a price on carbon. Subjecting all companies to the same constraints is the only way for them to create a balance between them. And they will then be able to distinguish themselves by their creativity in the way they respond to a new constraint that will be imposed on them, the carbon tax.
While I heard these leaders of multinationals calling for a price on greenhouse gas (GHG) emissions, something was happening at the same time in Canada that seemed incongruous to me: the Conservative Party of Canada, under the leadership of Pierre Poilievre, carried out actions aimed at delaying the adoption of bills in Ottawa, under the pretext of demonstrating its opposition to the carbon tax, thereby claiming to defend the companies subject to it.
In doing so, Mr. Poilievre is defending companies that do not wish to be defended. On the contrary, they are eager to do their part in the fight against climate change.
I have difficulty explaining this position of the Conservative Party. Unless it does not recognize the existence of climate change, the government must implement policies to reduce GHG emissions. However, what options are available to the government to act? There are a few: raising public awareness, pure and simple regulation, subsidies for certain activities, a price on GHG emissions, for example by imposing a tax on GHG emissions.
Awareness ? The population is now more than aware of the issue. There is no point in investing more resources into it. Those who have not understood at this point will never understand. Regulations ? Preservatives are by nature allergic to it. Moreover, it often has the effect of choosing winners and losers, and a Conservative government is normally rather reluctant to play this role. He prefers to let the market take its course. The subsidies ? Even more than regulation, they involve choosing winners and losers. Furthermore, in addition to being deemed ineffective, they are hated by the conservatives since they are likely to widen the budget deficit.
As for the price on GHG emissions, it has the characteristic of ensuring that it is market forces which will determine where emissions will be reduced and who will do it. The reductions will be made first in the sectors of activity where they cost the least. It’s called efficiency and, normally, it’s the mantra of any good conservative. Efficiency, the market which determines actions, no need to choose winners and losers, no cost to public finances: the carbon tax brings together all the conservative criteria to make it their tool of choice in the fight against climatic changes. Conservatives should love it.
Obviously, if you are climate skeptic, it’s another story.