It is time to end the concept that we should all get to pollute for free. Since the environmental awakening began we have struggled with the notion that pollution costs and that cost should be integrated into the cost of a product or activity. Economists would term environmental costs to be ‘externalities’. That is, they are treated outside of the costing of production. Yet the costs are real, its just that it is always assumed that someone else will pay that cost. The cost may arise in health care costs due to air pollution, water treatment costs, remediation of spoiled landscapes etc. By not integrating that cost into the cost of production it always transfers it to someone else. The hue and cry should be ‘internalize the externality’.
That is what the Carbon Tax does and it is widely held by economists that it is the most efficient way to accomplish this. So why is the Canadian political landscape so littered with anti-carbon tax sentiment. Prime Minister Justin Trudeau has reflected on the fact that pollution shouldn’t be free (MacLeans, November 2018, p22). His approach is well reasoned and one of the best ways to address the problem. It harnesses market forces to incentivize everyone to be more efficient in our use of fuels and our release of greenhouse gases. The Canadian Buisiness Council issued a statement supporting the use of the Carbon Tax, https://thebusinesscouncil.ca/news/business-council-statement-on-the-proposed-federal-carbon-pricing-and-rebate-system/. The name Carbon Tax doesn’t do it well though. In reality, it should just be labelled the Pollution Tax if you pollute, you pay the tax.
There are those that cry that it is just a burden on the taxpayer and a cash grab by the big government. However, a polluter is just transferring costs upon others without absorbing any of them. And the term polluter applies to all of us. Those SUVs that are so commonplace now pollute the air and contribute to climate change. Shouldn’t the owner bear some responsibility for the impact they are having? The homeowner that heats with oil (author included) should bear the cost of pollution the air. Every kilowatt generated with oil or coal should have the cost of that air pollution integrated into. Every industry that is energy intensive and derives that energy from the burning of fossil fuels should have the cost of that pollution integrated into their cost structure.
As climate change alters our environment and forces us into adopting expensive adaptation strategies, that revenue can be used to implement strategies to adapt to the future 2.0 Degree or worse world that we are headed for. Perhaps that is a better way to describe this. An Adaptation Tax, required to prepare us for an already warmer world.
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