Last week, BC’s New Democratic Party put a misleading attack on the province’s world-leading carbon tax shift at the center of its long-shot campaign to regain control of the province’s government in the May 12 elections. The campaign officially kicked off today.
As I said in October, I hope this argument won’t work. The NDP—a party Sightline proudly advised and collaborated with during its last term in power—is playing fast and loose with the facts. Some people I respect in the province are steaming mad. Here’s BC conservation advocate Tzeporah Berman in today’s Globe and Mail: “There is no question that environmentalists should be punishing the NDP for their regressive position on climate change. . . . Many environmentalists, like me, feel betrayed by Carole James.” Berman campaigned for the NDP four years ago. Why the enmity?
Because the NDP has taken aim at what is perhaps the single most progressive and environmentally responsible climate policy in the province—and one of the best in the world. The first specific complaint the party platform levels against the governing Liberal Party’s policies (on page 3) is the assertion that they “increase taxes for average families by tripling the gas tax.” This claim is demonstrably false, as I’ll show.
“Gas tax?!” Hmmph. NDP leaders surely understand that BC’s climate policy is a carbon tax, not a “gas tax.” A carbon tax covers gasoline, it’s true, along with all other fossil fuels. A gas tax only covers gasoline. By the NDP’s logic, a retail sales tax would also be a gas tax if it covered gasoline (along with other things). The party is using “gas tax” to unfairly incite voters to opposea a smart policy.
In fact, the first legislative priority listed in the platform—also given pride of place in party leader Carole James’s op-ed in today’s Vancouver Sun–is to scrap the carbon tax shift: “Gordon Campbell’s gas tax is unfair and it doesn’t work. Working people pay, while big polluters are let off the hook and greenhouse gas emissions continue to rise. The NDP will scrap the tax.” .
Let’s pull that apart:
We are a nonprofit. Donate now to support more research like this!
“Gordon Campbell’s [carbon] tax is unfair.”
No, it isn’t. The carbon tax policy, which includes legally mandated income tax credits and income tax rate reductions, is economically fair. The net effect is to raise after-tax income for the vast majority of low-income and middle-income families in the province. That’s the conclusion of economists Marc Lee of the Canadian Centre for Policy Alternatives and Toby Sanger of the Canadian Union of Public Employees—two organizations ideologically aligned with the NDP. They did the best analysis of the tax shift’s fairness. The only substantial fault they found with the fairness of the carbon tax shift is that, in a few years, as the tax rate on carbon rises, the tax credit for low-income families will need to rise, too. Marc Lee told The Tyeehe supports the carbon tax shift, especially if it’s adjusted in future years.
“It doesn’t work.”
Yes, it does. Mark Jaccard—perhaps Canada’s leading expert on climate policy, a professor at Simon Fraser University, and a repeat appointee to policy-making posts in past NDP governments—just published an analysis of the NDP’s critique of the carbon tax shift and the NDP’s own alternate plan. He concludes unequivocally that the carbon tax shift does “work.” By raising prices gradually, it encourages everyone in the province to squeeze carbon out of the energy system. It stems emissions far better and more cost effectively than anything the NDP has proposed to do.
“Big polluters are let off the hook.”
Big polluters? They pay the carbon tax the same as everyone else. No carbon tax or cap- and-trade system anywhere in the world is more comprehensive in its approach to climate-disrupting gases. I repeat: it is THE best carbon tax in its design, bar none. It treats virtually every user of fossil fuels in the province equally, whether they’re businesses or families. In fact, in design (although not yet in tax rate) BC’s carbon tax is better than the carbon taxes in the social-democratic countries of northern Europe to which the NDP often looks for inspiration. Gordon Campbell’s carbon tax is more comprehensive and uniform than Norway’s carbon tax. It’s better than Denmark’s. It’s better than Sweden’s.
Yes, the BC carbon tax does not yet extend to some businesses that emit certain minor greenhouse gases—compounds other than carbon dioxide. But that’s a practical problem of pollution measurement and tax administration, not policy design, and the province’s policy is as good as any climate pricing system in place anywhere else in the world in covering these pollutants. A year ago, what’s more, British Columbia committed to adding these pollutants to the tax base as doing so becomes practical.
Elsewhere, the New Democrats have claimed the carbon tax shift runs roughshod over rural families, playing into fears in the province’s north. It does not: it’s even-handed between rural and urban areas. Nic Rivers, a PhD candidate at Simon Fraser University, analyzed energy use in metropolitan and small town British Columbia. He found the impacts of the carbon tax on household budgets to vary little with geography. The colder climate in the province’s north, for example, increases home heating energy use there, compared to metro Vancouver. But the difference is so small that the monthly effect of the carbon tax amounted to less than $1 a month last year. (Mr. Rivers published his analysis in the April 29, 2008 Vancouver Sun. His column doesn’t seem to be online.)
The New Democrats claim that they care about curbing climate change: they say they will replace the carbon tax shift with a cap-and-trade system that only covers big, industrial companies. Of course, the Campbell government has already legislated the province’s participation in the Western Climate Initiative—the largest cap-and-trade system in development in North America. As we’ve argued, doing both the tax shift and cap and trade is better than doing either separately. Mark Jaccard’s academic analysis of this NDP alternative concludes that the NDP cannot achieve the quick emissions reductions they promise by targeting only the roughly one-third of climate-disrupting pollution that flows from heavy industry in the province. Or, more accurately, the NDP can only hit its emissions goals from industry alone by essentially shutting down a chunk of the province’s manufacturing base that employs 60,000 people.
If the New Democrats want to contest Gordon Campbell’s climate-change policy credentials, they have plenty of legitimate arguments at their disposal: the Liberals’ support for expanding the oil and gas industry, for twinning the Port Mann Bridge, and for the highway-expanding megaproject Gateway. Instead, they have systematically misrepresented the facts, doing a disservice to the province’s voters, not to mention the global quest for systemic solutions to the climate crisis.
I had hoped that the New Democrats would let last year’s overblown criticisms of the carbon tax shift fade into the background during the election. After all, energy prices have dropped and the economic crisis is now the main public concern. Instead, the party appears to be making its carbon-tax distortions a centerpiece of its campaign strategy. That’s more than disheartening. It’s deceptive and cynical. As the science of climate change looks ever more dire, it also appears downright dangerous.