In 2019, while the US was distracted, Canada implemented a big ol' national carbon tax -- and in the subsequent election, voters overwhelmingly affirmed it. I talk with two of the key players about how it got passed & what it means.
David I was disappointed you didn't share that there are 5 different bills in the House and Senate using carbon fee and dividend. HR 2307 The Energy Innovation and Carbon Dividend Act has 95 co-sponsors. Several Republicans (Romney, Graham, Murkowski) have publicly stated the benefits they see from this approach. It isn't as bleak as you painted it. The carbon border adjustment, that is the price added to products imported from other countries is a key part of protecting domestic manufacturers as well as exporters. I suggest you have a discussion with a representative of Citizens Climate Lobby to help listeners understand the US version of what Canada has passed. It does provide for a monthly check, so people know exactly where the money is coming from.
I look forward to listening to this podcast. My brother was involved in the predecessor carbon tax enacted in BC in 2008 so I have a personnel interest in this story.
Towards the end of the podcast there was the comment that when the price gets to $170 per ton hopefully the big dividend checks keep coming. If people just use the dividends to pay for more expensive fossil fuels what’s the point?
But they won’t. People will always seek the least cost options. As the tax goes up, when buying a car, they’ll consider how much gas will cost and choose the more fuel efficient car, hopefully an EV. The payoff for energy retrofits will shorten. When it comes time to replace their furnace or hot water heater, the total cost of ownership of a heat pump system will be much less than a fossil-based system, so it’ll be an easy choice. Plus, only consumers will get the dividends. The largest users of fossil fuels won’t. So utilities will be highly motivated to get off coal and gas to avoid paying the rapidly increasing tax. Same for trucking and shipping companies. Airlines will buy more fuel efficient planes, or switch to biofuels or green hydrogen. Businesses will demand green electricity because it’ll be cheaper, and will invest in energy efficiency to avoid higher costs. Companies that use lots of steel and cement will seek low carbon alternatives. Suppliers who can produce them will thrive; those who can’t will fail. Bottom line is the tax gives everyone a price signal to seek low carbon options; the dividend just protects low income consumers during the transition, and those who can transition more quickly will come out ahead.
Excellent response Brian. We all (virtually) respond to price. The beauty of the carbon price is it incorporates the cost of fossil content into every single product we use and thus when people make that lower cost choice they are selecting for a lower fossil carbon content, regardless of their perspective on climate change.
Nice episode - but my approval may be heightened because I’m a Canadian. To add to the unicorn characterization you developed of Canada over this episode, I’m sharing a topical link related to your Feb 11th chat with Rebecca Dell on decarbonizing industry. Ontario just announced funding to electrify its’ steel industry (a bright move for the province which has been a recent climate action dud).
I would have like to hear the thoughts of the Canadians on the failure of the first attempt at a carbon tax in the state of Washington. It was designed after the BC carbon tax in giving most, if not all, the revenue back to the people. It was opposed by almost all environmental groups including the Sierra Club, 350.org, et al. It was opposed because the revenue was not directed to combat climate change. So the question would be; was there similar opposition from the left in the 2019 election in Canada. If not, why not.
There was little to no opposition to the carbon tax from environmental groups in the 2019 election because most recognized that returning the tax to the population at large was the key to selling it politically. In many provinces the rebate is returned preferentially to people whose income is below a mid level threshold i.e. the carbon tax/rebate is progressive. In B.C., where I live, if you have a family income above about $60,000 (the threshold varies depending if you are single or in a family) you do not receive any rebate.
In Canada the left - right labels apply broadly on climate issues but not so cleanly as they seem to do in the US. Here in BC the carbon tax was introduced by a well to the right of centre government in 2008. There is a small Green party in Canada that has received up to 7 % of the national vote though it did poorly in the 2019 election because of leadership infighting. The Greens make environmental issues central in their platform and are progressive on social justice issues. The Green party explicitly rejects left - right division of the political spectrum. The party founders included mildly libertarian types though they are no longer prominent in the party. Some Green party members I know, I don’t think they are representative, have donated to the recent ‘truckers’ protest against vaccine mandates. They did so even though it was clear that the protest was led and organized by far right extremists intent on overthrowing the government, the same folks now basking in attention from Trump, Tucker Carlson et al. Another wing of the federal Green party is avowedly ecosocialist.
Thanks for illuminating the right-left divide on addressing climate change in Canada. As you probably know the second attempt at a carbon tax in Washington which addressed the issues of environmentalists also failed. obviously, the right-left divide in US is much wider in the US both to the right and to the left.
David I was disappointed you didn't share that there are 5 different bills in the House and Senate using carbon fee and dividend. HR 2307 The Energy Innovation and Carbon Dividend Act has 95 co-sponsors. Several Republicans (Romney, Graham, Murkowski) have publicly stated the benefits they see from this approach. It isn't as bleak as you painted it. The carbon border adjustment, that is the price added to products imported from other countries is a key part of protecting domestic manufacturers as well as exporters. I suggest you have a discussion with a representative of Citizens Climate Lobby to help listeners understand the US version of what Canada has passed. It does provide for a monthly check, so people know exactly where the money is coming from.
I look forward to listening to this podcast. My brother was involved in the predecessor carbon tax enacted in BC in 2008 so I have a personnel interest in this story.
Dividend=direct observed benefit
Dividend=direct observed benefit
Towards the end of the podcast there was the comment that when the price gets to $170 per ton hopefully the big dividend checks keep coming. If people just use the dividends to pay for more expensive fossil fuels what’s the point?
But they won’t. People will always seek the least cost options. As the tax goes up, when buying a car, they’ll consider how much gas will cost and choose the more fuel efficient car, hopefully an EV. The payoff for energy retrofits will shorten. When it comes time to replace their furnace or hot water heater, the total cost of ownership of a heat pump system will be much less than a fossil-based system, so it’ll be an easy choice. Plus, only consumers will get the dividends. The largest users of fossil fuels won’t. So utilities will be highly motivated to get off coal and gas to avoid paying the rapidly increasing tax. Same for trucking and shipping companies. Airlines will buy more fuel efficient planes, or switch to biofuels or green hydrogen. Businesses will demand green electricity because it’ll be cheaper, and will invest in energy efficiency to avoid higher costs. Companies that use lots of steel and cement will seek low carbon alternatives. Suppliers who can produce them will thrive; those who can’t will fail. Bottom line is the tax gives everyone a price signal to seek low carbon options; the dividend just protects low income consumers during the transition, and those who can transition more quickly will come out ahead.
Excellent response Brian. We all (virtually) respond to price. The beauty of the carbon price is it incorporates the cost of fossil content into every single product we use and thus when people make that lower cost choice they are selecting for a lower fossil carbon content, regardless of their perspective on climate change.
Nice episode - but my approval may be heightened because I’m a Canadian. To add to the unicorn characterization you developed of Canada over this episode, I’m sharing a topical link related to your Feb 11th chat with Rebecca Dell on decarbonizing industry. Ontario just announced funding to electrify its’ steel industry (a bright move for the province which has been a recent climate action dud).
https://www.cbc.ca/news/canada/toronto/ontario-climate-change-steel-co2-greenhouse-gas-emissions-1.6353814
I would have like to hear the thoughts of the Canadians on the failure of the first attempt at a carbon tax in the state of Washington. It was designed after the BC carbon tax in giving most, if not all, the revenue back to the people. It was opposed by almost all environmental groups including the Sierra Club, 350.org, et al. It was opposed because the revenue was not directed to combat climate change. So the question would be; was there similar opposition from the left in the 2019 election in Canada. If not, why not.
There was little to no opposition to the carbon tax from environmental groups in the 2019 election because most recognized that returning the tax to the population at large was the key to selling it politically. In many provinces the rebate is returned preferentially to people whose income is below a mid level threshold i.e. the carbon tax/rebate is progressive. In B.C., where I live, if you have a family income above about $60,000 (the threshold varies depending if you are single or in a family) you do not receive any rebate.
In Canada the left - right labels apply broadly on climate issues but not so cleanly as they seem to do in the US. Here in BC the carbon tax was introduced by a well to the right of centre government in 2008. There is a small Green party in Canada that has received up to 7 % of the national vote though it did poorly in the 2019 election because of leadership infighting. The Greens make environmental issues central in their platform and are progressive on social justice issues. The Green party explicitly rejects left - right division of the political spectrum. The party founders included mildly libertarian types though they are no longer prominent in the party. Some Green party members I know, I don’t think they are representative, have donated to the recent ‘truckers’ protest against vaccine mandates. They did so even though it was clear that the protest was led and organized by far right extremists intent on overthrowing the government, the same folks now basking in attention from Trump, Tucker Carlson et al. Another wing of the federal Green party is avowedly ecosocialist.
Jake,
Thanks for illuminating the right-left divide on addressing climate change in Canada. As you probably know the second attempt at a carbon tax in Washington which addressed the issues of environmentalists also failed. obviously, the right-left divide in US is much wider in the US both to the right and to the left.
Thanks for featuring this interview David!