Is carbon pricing a politically feasible climate policy? What research says – National

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It had to do the heavy lifting for Canada’s greenhouse gas emissions targets.

And it had to remain an important part of Prime Minister Justin Trudeau’s legacy, both at home and abroad — part of an urgent global push to fight climate change.

But instead of realizing these liberal hopes, carbon pricing has become a major political burden.

Conservative Leader Pierre Poilievre’s crusade against consumer carbon pricing and his promise to “abolish the tax” if he wins the next election has resonated with many Canadians amid an affordability crisis.

The Tory leader has blamed climate policy for driving up the cost of food and fuel, while dismissing or ignoring its supposed benefits, including consumer rebates.

The government has struggled to respond to Conservative attacks, despite the carbon price enjoying broad support among economists.

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Have the Liberals dropped the ball?

Or was the policy always doomed to failure?

Research shows the Liberals may be fighting a losing battle, and some experts are urging policymakers to look for alternative policies to reduce emissions, warning that the threat of climate change is too great to delay action.

“It’s very difficult to find places with high economy-wide carbon prices that haven’t caused a significant political backlash,” said Matto Mildenberger, an assistant professor of political science at the University of California, Santa Barbara.

“That causes political scientists like me to have real concerns about the feasibility of carbon pricing as a short-term strategy to tackle the climate crisis.”

Consumers pay the costs of carbon pricing up front in a highly visible way, Mildenberger said. Its benefits are only reaped in the long term.

Click to play video: 'Increasing the CO2 tax stimulates affordability policies'

An increase in the CO2 tax fuels the affordability policy

The federal government’s Canada Carbon Rebate is intended to compensate voters for the financial burden. According to the parliamentary budget officer, eight in ten families receive more in rebates than they pay in carbon taxes.

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But Mildenberger’s research shows the cut isn’t as effective at bolstering public support as Liberals might hope.

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A study analyzing public support for carbon pricing in Canada and Switzerland found that people are unaware of the rebates they receive and tend to underestimate their value.

Another study looked at the effect of rebates on public support for a carbon tax in the US and Switzerland and found that ultimately there was little impact.

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“Our results indicate that in the absence of political messages, rebates increase public support for carbon taxes in both countries by building support among lower income groups,” the 2022 paper said.

“However, policies are always politicized, and when respondents are exposed to political messages about carbon pricing, the effects of rebates are dampened or eliminated.”

Mildenberger said it’s safe to conclude that discounts haven’t changed people’s perceptions.

“People’s partisan, ideological preferences dominate their perceptions of carbon pricing, far more than the objective costs or benefits derived from the policy.”

Advocates often blame the Liberal government for failing to effectively communicate the policy and rebates to Canadians.

Mildenberger agreed that the Liberals were not doing a good job of selling.

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For example, they didn’t heed attorneys’ advice to send rebates in checks, he said — something that would have tied the money to the policy in a “tangible” way.

But Katya Rhodes, an assistant professor of public administration at the University of Victoria, said blaming communications itself is an oversimplification of the challenge.

Rhodes said some of her research shows that the more information people get about complex climate policies, the more confused they become.

“It is very difficult to be a politician if you introduce a carbon tax. Is it the ideal approach? I wouldn’t do it if I were a politician.”

Rhodes added that trust in government plays an important role in the success or failure of the carbon tax, as we see in countries like Finland and Norway.

Economists say carbon pricing is the cheapest and most effective way to tackle climate change.

By putting a price on pollution, the government is not dictating how emissions should be reduced. Instead, it offers polluters an incentive to invest in emissions-reducing technologies, they say.

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It also encourages consumers to choose goods and services that emit fewer greenhouse gases.

More than 300 economists signed an open letter in March supporting the carbon price for consumers and seeking to dispel misconceptions about the policy.

“I think there are a lot of Canadians who say they are concerned about climate change…. but somehow they think we can reduce emissions without changing behavior,” said Christopher Ragan, director of McGill University’s Max Bell School of Public Policy and one of the organizers behind the letter.

Mildenberger and Rhodes both said they recognize that the carbon tax is theoretically the best choice to combat climate change.

But both are calling for governments to find other ways to reduce emissions because of the political challenge this poses.

Experts say carbon pricing that uses a cap-and-trade system like Quebec and BC may be more palatable because people don’t see the direct costs.

Such systems place an upper limit on the amount of greenhouse gases an organization can emit, but allow them to purchase unused credits from other groups or companies that have not fully used up their allowances.

However, this form of carbon pricing is not politically infallible either.

Ontario Premier Doug Ford halted plans for a cap-and-trade system in 2018, arguing the policy would hurt businesses and raise costs.

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Mildenberger is a supporter of US President Joe Biden’s approach, which relies heavily on government investments and subsidies in the green economy.

He said this emphasizes the economic benefits of fighting climate change “while sidestepping the politics of taxes.”

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But while Canada has tried to keep up with the U.S. by rolling out a range of investment tax breaks, Rhodes said Canada cannot compete with the U.S.’s deep pockets.

Instead, she said Canada could reduce emissions through flexible regulations such as clean fuel standards.

Click to play video: 'Question Time leads to a heated debate about the increase in the CO2 price'

During question time, a heated debate arises about the increase in the CO2 price

In a statement, Environment Minister Steven Guilbeault defended the carbon tax as the most “cost-effective and efficient” way to reduce emissions. He cited department work showing that replacing carbon prices for consumers and industry with subsidies would cost taxpayers billions more.

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“Pierre Poilievre has absolutely no plan to address climate change in Canada and would rather exploit people’s real concerns for his own political gain than admit that eight in 10 Canadians get back more than they pay through the Canada Carbon Rebate,” said Guilbeault.

A change in approach would be a political blow to a Liberal government that has tried to put Canada at the forefront of the global fight against climate change.

In 2021, Canada launched an international challenge to encourage other countries to implement a carbon price, with the aim of bringing 60 percent of global emissions under such a system.

But with the Conservatives maintaining a double-digit lead in opinion polls, the future of carbon pricing is in serious doubt.

“Canadians feel the pain of Justin Trudeau’s punitive carbon tax every day as they buy food, pump gas and heat their homes and don’t need the opinions of pointy ‘experts’ and radical Liberal politicians to know they are much worse off are. Sebastian Skamski, a spokesman for Poilievre, said in a statement.

Conservatives would end carbon pricing, lower the cost of zero-emission energy and approve green projects, Skamski said.

Poilievre has said little else about what he would do, though he has promised to prioritize “technology, not taxes.”

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“I think it’s a shame that you’re going to lose a fundamentally good policy,” Ragan said.

“My big fear is actually that they won’t put anything in its place.”

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