What a carbon tax can’t do

The federal carbon tax is poor way to galvanize public support for climate action. Canada needs a climate plan that embodies the idea of the common good

Photo by Anthony Quintano via Wikipedia Commons

For the last four decades, the gospel of small government has reigned supreme. But the pandemic has challenged this, as countries around the world have been forced to mobilize vast state resources to combat the disease. In Canada, it seems that all of this public sector activism has only whet the people’s appetite for more of the same. Recent polling has shown that a strong majority of the country’s citizens are not waiting for a return to the pre-pandemic status quo; they want more government intervention to address pressing social and economic needs. This shift in attitude is good news in a world full of bad news; there seems to be no end to the crises that call out for bold action today.

The most urgent and dire of these is the threat of climate change. Only the state, acting in an interventionist mode, has the financial resources, administrative capacity and legislative authority to produce a serious plan to fight the climate crisis. But just as importantly, an interventionist state is capable of initiating a plan that generates a sense of solidarity and common purpose in the population – a necessity if the plan is to succeed.

Here again our government’s role in fighting the pandemic proves instructive. Canada’s relief efforts, while far from perfect, have aimed largely to help ordinary Canadians by getting money into their hands quickly. In the U.S., Congress approved an astonishing $4 trillion in spending to deal with the pandemic, but a strong resistance to “big government” redistributive schemes meant that the lion’s share went to bailing out corporations. And unlike in Canada, where temporary relief efforts are backstopped by universal healthcare, in America there are 44 million people who lack any kind of health insurance at all.

The inadequate American pandemic response has done nothing to calm the political, economic and racial tensions that already plagued the U.S. Nor has it inspired confidence in the machinery of state: a number of polls have shown a steep decline in American levels of trust in government over the course of the pandemic. In Canada, we’ve seen a very different trend. Although attitudes may now be shifting thanks to recent delays in the vaccine roll-out, polling throughout 2020 revealed rising levels of trust in government. This trust was borne out in the fact that Canadians have been much more supportive of government-mandated health protocols and more willing to bear the inconveniences and privations that they impose on their lives.

A common criticism of interventionism is that it breeds self-seeking individuals who (to riff on a famous American) ask only what their country can do for them and not what they can do for their country. But the fact is that state programs that are guided by notions of justice and fairness can help to nurture a sense of a common good and breed feelings of shared purpose. A nation that does little to address the inequities within its borders, on the other hand, can give rise to widespread symptoms of anomie and fragmentation.

State programs that are guided by notions of justice and fairness can help to nurture a sense of a common good and breed feelings of shared purpose.

A serious national climate plan would build on this lesson and incorporate policies capable of embodying an idea of the common good. The centrepiece of the Liberal Party’s current climate plan, the federal carbon tax, is poorly suited to this purpose. Many fiscal conservatives like carbon pricing as a policy response to global warming because it is a market mechanism that relies purely on the self-interested actions of consumers to curb carbon use. But it is hard to whoop up public enthusiasm around something as abstract as an economic signalling instrument. More to the point, self-interest as a motivation sits in uneasy tension with feelings of loyalty or commitment to the larger whole.

Not surprisingly, the carbon tax is unpopular with many Canadians, something the government has tried to remedy by promising a rebate to most households in excess of what they are taxed and, as a sweetener, by opting to send those rebates as quarterly cheques, rather than as an annual tax credit. These inducements may yet succeed in selling the Canadian public on the deal, but inasmuch as they constitute a narrow appeal to the self-interest of individuals, they will never generate the sort of popular support that Canadians express for public healthcare.

Inasmuch as carbon tax rebates constitute a narrow appeal to the self-interest of individuals, they will never generate the sort of popular support that Canadians express for public healthcare.

Climate policy is more likely to gain this sort of support if it produces concrete outcomes that are felt in the lives of ordinary Canadians and that can be associated with the goals of justice and equity. Such a plan would, for instance, need to provide good, secure income opportunities in local, low-carbon agricultural production, renewable energy projects like hydrogen and geothermal development, and cleantech industries like decarbonized steel and concrete. It would also need to invest in care work like teaching and nursing – climate-friendly jobs that, as the pandemic has taught us, we underfund at our peril.

A climate plan that invests in these areas – without letting private industry run away with the profits – could dramatically reduce our carbon footprint while also addressing the wage stagnation and economic inequality that have become endemic in recent decades. It could also address long-standing regional and cultural divides. In Alberta, for instance, where many view the federal carbon tax as a direct attack on the oil industry that has served as their province’s economic backbone, a dramatic investment in clean industry would go a long way to calming economic fears and easing resentments. A green economy could also help us to address wrongs against Indigenous Peoples in Canada, helping to create new economic opportunities on lands that have too often been treated as a resource storehouse or thoroughfare for extractive industries.

In recent months there have been small signs that some of this may come to pass. A federal budget is anticipated this spring, and the Liberal government has provided indications that it will assume a more interventionist role in fighting climate change.

If it recognized that it also has a role to play in creating unity and a sense of shared purpose in the country, it might be emboldened to act more quickly.

Scott Staring has a PhD in Political Science and is a professor in Georgian College’s Liberal Arts department.

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