Carbon pricing a triumph of ideology over reason
Gwyn MorganBusiness Operations Economy General carbon carbon pricing carbon tax corporate tax manufacturing protectionism tax
There couldn't be a worse time to hand another competitive advantage to the Americans.
Canada’s political and business leaders are pursuing an emissions-reduction agenda that will harm our nation’s citizens and economy. And it’s an agenda that defies prevailing world trends.
The COP 22 Marrakech Climate Change Conference began on Nov. 7 and included pro-emissions-reduction delegations from Canada and the US. Imagine their shock when, just 24 hours later, they learned that Donald Trump would be the next US president.
Trump believes that man-made global warming is a “hoax” perpetrated by China and other countries wanting to steal American jobs. He opposes carbon taxes and wants to notch up production of America’s oil resources to reduce imports from the Middle East and Venezuela. And he plans to scrap former president Barack Obama’s deal with Chinese president Xi Jinping to shut down American coal-fired power plants while allowing China to commission several new ones each week.
In Russia (emitter No. 3), environmental matters don’t appear on the radar screen. In India, population growth, corruption and a rich-must-pay attitude means continuing emissions growth.
So the four countries responsible for more than half of global emissions are going to raise, not lower them. Adding other countries with no intention of playing the COP game – including most of Asia, Iran, Saudi Arabia and Venezuela – means emissions from countries representing over two-thirds of global emissions are going to go up, not down.
The African nations’ only objective at COP 22 was to convince others to buy carbon credits in return for their promises to plant or avoid cutting a few trees, with dubious results once the cash is paid.
So who’s left to save the planet from the predicted global warming Armageddon? Just the European Union, Japan and Australia, with a combined global emission share of 15%. And, of course, Canada, with our minuscule 1.6% share.
Prime Minister Justin Trudeau has anchored part of his “Canada is back” rhetoric to fighting global warming. All his mandate letters to cabinet ministers include emissions reduction as a headline item. Tellingly, there was scant mention in those letters of stimulating private sector investment to drive economic growth.
And Trudeau’s recent announcement of a national carbon tax isn’t the only measure hitting consumers and businesses. Note the provincial subsidy programs for green power producers that drive up electricity rates. These measures impose a dead weight on an already struggling economy.
Adding to that economic burden is Trump’s avowed intent to rework the North American Free Trade Agreement, which accounts for 90% of Canada’s trade. There couldn’t be a worse time to hand another competitive advantage to the Americans.
Pricing carbon has always been based on the notion that, while Canada’s emissions are small, we should do our part of a worldwide effort. Yet going it alone while our trading partners refuse would be a triumph of ideology over reason.
We expect that from political leaders, but at least business could be counted on to herald the dangers of those leaders’ ill-advised paths.
So imagine my surprise when a recent morning’s news carried a “Letter to First Ministers from Major Business and Civil Society Leaders,” many of whom I know and respect. It offered support for “putting a price on carbon”.
The statement alleges, “The world’s most advanced players are hard at work forging cleaner, more innovative economies fuelled by a desire to compete in a changing global market place.” With less than 17% of global emissions being restrained?
The statement adds, “Clean technology companies can tap into a fast-growing global market.” A growing market it may be but not for Canadian manufacturers. Take wind power, the darling of the green energy advocates. Five of the top 10 wind turbine manufacturers are in China. America’s GE Wind is the next largest manufacturer.
Ontario’s disastrous green power plan has driven electricity rates in Canada’s manufacturing heartland from among North America’s lowest to one of the highest.
Piling on a carbon tax will make certain beneficiaries of that “fast-growing global market” are not Canadian workers. Far from being a visionary effort to build a “high performance economy,” the statement reads like an economic suicide pact.
The most important responsibility of political and business leaders is to create an environment for Canadians to gain productive employment and continue to enjoy higher living standards.
It’s time for our leaders to heed that 17th century Latin admonition to medical students, primum non nocere. Translation: First, do no harm.
Gwyn Morgan is the retired founding CEO of EnCana Corp., which produces, transports and markets natural gas, oil and natural gas liquids. Distributed by Calgary-based Troy Media © 2017.