The annual carbon tax increase on April 1 has prompted the usual flurry of opposition, amplified by Conservative Leader Pierre Poilievre’s “axe the tax” rallies. But what’s new this year is that even some former provincial carbon tax supporters are throwing in the towel.
Both positions rest on denial.
Much has been written about the selective and exaggerated arguments of the axe-the-tax camp. Conservatives and other opponents usually neglect to mention that eliminating the carbon tax (a.k.a. “fuel levy”) would also mean eliminating the tax rebates. Contrary to the argument that the carbon tax is increasing the cost of living, the federal carbon tax system in eight provinces puts money in most families’ pockets by delivering rebates greater than their carbon tax payments.
Most Canadians don’t believe that, but it’s easy to check. Anyone can calculate their family’s tax payments by multiplying gasoline and natural gas consumption by carbon tax rates per unit of each fuel (or just use this online calculator). In provinces subject to the federal carbon tax, quarterly rebates are delivered to one adult per household, usually via direct deposit. Rebates will increase in April by the same percentage as the tax.
What about inflation? The Bank of Canada estimates the carbon tax accounts for 0.15 per cent inflation, a tiny fraction of cost-of-living increases that have battered Canadian families in recent years. Even fuel price increases are mostly due to Russia’s invasion of Ukraine, not the carbon tax. Calls to suspend the April 1 increase at best ignore the real causes of the affordability crisis, and at worst seek to win Canadians’ support via false solutions.
But what about that Parliamentary Budget Office report that concluded the combination of carbon tax payments and “economic costs” of pollution reductions in response to the tax will exceed the rebates by 2030? PBO’s analysis simply ignored corresponding benefits, including subsidy programs for EVs and heat pumps, healthier air and the impact of Canada’s contribution to mitigating climate change. The benefits the PBO ignored are the whole point of the carbon tax — or any other climate policy.
Unlike the axe-the-tax camp, the towel-throwers accept overwhelming research that finds carbon taxes work, but they’re weary of the political battle. It doesn’t bode well for our democracy if politicians concede that Canadians will be won over by misleading or false claims. But for now, let’s consider what those who support climate action propose as the alternative to a carbon tax.
The case for regulation instead of a carbon tax is that although it is a more costly way to reduce emissions, it garners more political support. Few are willing to state the quiet part out loud — regulations generate less opposition because many voters are oblivious that the costs of emissions reductions will be passed on to them as consumers.
Regulation works. We applaud the host of measures in place and under development to complement the carbon tax. But after decades of studying environmental regulation and climate policy, we fear that a real carbon tax is being incorrectly compared to an idealized vision of regulation.
Regulation is slow. To replace the carbon tax, Canada would need many different regulations to cover diverse emissions sources, from barbecues to furnaces, lawnmowers to transport trucks, small houses to commercial buildings. Each must be technically detailed. We’ve never seen a regulation finalized in less than four years. Given that, axing the carbon tax can be expected to set Canada back several years as we try to make up the lost emissions reductions.
Regulations need to be regularly updated to drive continued emissions reductions. When the first generation of environmental regulations was adopted in the 1970s, the plan was to update them every five years. It didn’t happen, not least because each of the regulations took about five years to develop. Infrequent revision not only slows progress in reducing emissions, but weakens business incentives to invest in technological innovation.
Regulation is also more challenging politically than it seems. Industries, facing the prospect of regulation, lobby to weaken proposals. Invariably, concessions are made along the way. But because the devil is in the very technical details, they tend to be underreported (if at all), with voters none the wiser.
While consumers today may be oblivious to the costs that will be passed on to them, industries anticipating declining sales or product bans will alert consumers and invest in campaigns to rally public opposition. They’re no more likely to fight fair than carbon tax opponents. “Spike the hike” will be replaced by “They’re coming for your barbecue.”
We’d all like to believe someone else should pay to fix this mess. After all, we’ve played by the rules, worked hard and paid our taxes. Alas, fixing climate change demands a transition across all sectors of an economy that still largely runs on fossil fuels. Big industrial polluters contribute less than half of Canada’s emissions. The rest are small sources like homes, motor vehicles and small businesses.
The choice Canadians face is not between our current lives with and without a carbon tax. It’s whether to invest in mitigation today to avoid worse impacts of climate change in the future — and creating a competitive low-carbon economy while we’re at it. It’s akin to investing in RRSPs or RESPs, which also entail modest payments today to ensure a better future.
Canada may end up “axing the tax,” and in so doing, taking money away from the majority of Canadian households. There are other ways to achieve our climate goals. But at the end of the day, there is no magical policy that will reduce carbon pollution without costs.
And the viability of any approach will turn on Canadians’ willingness to make modest changes in our lives. Both the axe-the-tax camp and the towel-throwers are choosing short-term political wins over an honest conversation with voters about their role in building Canada’s future.
As an associate professor of climatology at the University of British Columbia, Simon Donner studies why the climate matters to society, as well as ecosystems like coral reefs. His group’s work provides insight into the causes and effects of climate change, public attitudes, policy options at home and abroad and what can be done to adapt.
Kathryn Harrison is a professor of political science at the University of British Columbia. She has a bachelor’s degree in chemical engineering from the University of Western Ontario, master’s degrees in chemical engineering and political science from MIT, and a PhD in political science from UBC. Harrison studies environmental, climate and energy policy, federalism and comparative public policy.
Comments
This is a very thoughtful and well explained piece, but it seems Canadians prefer negative and emotional stories - and fiction is ok too. I think most Canadians didn't buy into the anti-vax fiction and misinformation embraced by the freedom convoy. These loud and obnoxious protesters refused to wear masks or social distance, which were effective public health precautions and a pro-social act of kindness. Convoy types wanted the majority to accept their strange views that were steeped in ignorance and science-denial. Yes, they were suffering during covid and this caused them to lash out, but it wasn't a picnic for the rest of us.
I mention this because the freedom convoy is assembling west of Calgary on the trans-Canada highway with their gas-guzzling trucks and sketchy RVs. There isn't much difference between this encampment filling the roadside pullouts and the Coutts border blockade. Some of the signs have changed to "Axe The Tax!" but there's still the usual "Freedom!" and "Eff-Trudeau" nonsense. It's very telling that Poillievre has mobilized his base to save us from measures designed to address a climate crisis that is affecting everyone and spreading misinformation and hate in the process. Sounds familiar doesn't it?
Well said.
My sentiment exactly. We make money off the carbon tax, because we axed the jet set vacations and invested in solar and than an EV. Currently we've helped our son retrofit and solarize his family home....so even though they still drive gas guzzlers, they too will see a profit.
Climate change should by now be called global heating.....as many western Canadian penny wise and pound foolish 'ax wielders' are going to discover this summer. In Alberta it goes beyond denial. We elected a premier who put a moratorium on renewable projects, intends to charge EV drivers $200 a year when they register their vehicle, and has just added 4 cents to our gasoline tax.
But hey.........those are revenue generating moves. She can open a War Room against the planet with that money, while finger pointing about a 3 cent carbon tax rise that will put more money into Canadian pockets.
I sometimes wonder if we don't deserve to go extinct. Even Alberta ND's don't seem to have the brains....or the jam, to stand up for what is a good policy. And as for remembering that when the Notley government was in power, we had our own made in Alberta price on carbon that worked even better than the federal plan???? Jist ferget about it.
I wonder whether a class action suit against the EV tax would have a chance in court. I'm going to ask around.
In that light, I wonder how many hours in the board rooms of wind and solar companies who have invested in Alberta were used discussing suing the Alberta government over their losses and opportunity costs. It's curious why they haven't so far.
"Anyone can calculate their family’s tax payments by multiplying gasoline and natural gas consumption by carbon tax rates per unit of each fuel"
This calculation includes only direct fuel charges and omits indirect carbon costs embedded in goods and services. I.e., actual carbon costs are higher. Nevertheless, the rebate includes both direct and indirect fuel charges.
"Rebates will increase in April by the same percentage as the tax."
If that were true, rebates would increase by the same percentage in each province. Not so.
"This coming year, the rebates will increase by 24% in Saskatchewan, 27% in Manitoba, 31% in Ontario and 43% in Alberta. The law requires that 90% of carbon price revenues be rebated to families. Each year, the rebates are adjusted up or down in each province depending on whether the amount paid in the previous year was above or below that 90% threshold." (CP, 2023)
Rebates are calculated based on projected revenues, and adjusted annually in accord with the previous year's rebate payout.
"PBO’s analysis simply ignored corresponding benefits"
The PBO's calculations that the federal carbon price implies net economic costs are based on a comparison to a hypothetical scenario with no carbon tax and no other climate policy to replace it. Hardly realistic.
Even if the Conservatives "axe the tax", federal and provincial governments will still retain other climate policies, which will still incur costs. Rules, regulations, and subsidies tend to be less direct, visible, efficient, and more costly than carbon pricing.
"But didn’t the PBO say that the carbon levy would leave the average Canadian worse off?
"Yes. And no.
"Last March, the PBO looked at two things: the fiscal impact of what it calls 'the federal fuel charge,' and the economic impact.
"Calculating the fiscal impact is fairly straightforward, and the PBO found that the vast majority of people will receive an annual rebate worth more than the tax paid. It called the rebates 'broadly progressive.'
"And that should have been that. But then the PBO decided to estimate the economic cost of the tax. And in designing its analysis, the PBO did something odd. Instead of comparing the economic impact of the carbon tax with other carbon-reduction policies, it compared the cost of the carbon tax to the cost of doing nothing.
"By that measure, the PBO found a small negative economic impact, which will leave most Canadians slightly worse off, even if they get a carbon rebate worth more than their carbon taxes.
"The PBO didn’t do an apples-to-apples comparison. It compared the economic cost of the carbon tax apple with the economic cost of buying nothing, and found that an apple costs more than nothing. It’s like a study of which grocery store offers the lowest food prices concluding that the best way to save money on groceries is not to eat." (Globe and Mail, 2024)
"… University of Calgary economist Trevor Tombe also said, however, that it's hard to imagine a real-life scenario with no form of national climate policy.
"'If we were to think about eliminating the carbon tax today, we shouldn't be thinking about replacing it with nothing,' Tombe said.
"'We still have targets around lowering emissions, targets that all parties at least rhetorically support … and so if we're going to be achieving the same target but with tools other than carbon pricing, which is generally the most efficient way to incentivize emissions reductions by individuals and businesses, then we'll be replacing that system with something that has greater economic costs.'"
"If not a carbon tax, then what?" (CBC, 2023)
Geoffrey (who sings from the same hymnal as I) wrote:
"Rules, regulations, and subsidies tend to be less direct, visible, efficient, and more costly than carbon pricing."
I dispute, strongly, that carbon taxes are direct, other than directly affecting the per unit price of oil, gas, etc. It's not the unit price of a fossil that's the problem; the problem is the emissions resulting from production and consumption.
If you seek "direct", then you want policy instruments that relate explicitly to emissions. Who cares what the price is (with caveats)?
I think carbon taxes are popular policy options simply because they’re easy; not because they’re magically effective.
Jevon's paradox comes up regularly, and it applies to carbon taxes as much as anything. If an end user gets more, carbon-taxed bang for the buck, they will use more product and create more emissions, increasing taxes notwithstanding. I believe this is why oil companies don't mind carbon taxes; they can still keep selling more stuff even as taxes increase.
Oh, but oil companies don’t like caps. They REALLY don’t like caps. Which is a great reason for caps being the (DIRECT) policy Instrument of choice.
Aside: speaking of oil self-interest, have you ever wondered why gas stations started charging for air 20+ years ago. (Yes, kids, compressed air at service stations used to be free, and available at every pump, rather than hidden in some corner of the lot and accessible at ~$1 per minute). Find my hypothesis below.
If you want direct, here are two prerequisite observations:
1. Many Canadians have a lot of disposable income, and they are using it to travel. Or buy bigger homes. Or, still, guzzling SUVs and crossovers. Carbon pricing is undoubtedly an annoyance for most. But it’s not a showstopper. They have a lot of money to spend and can afford to continue their lifestyles. Concurrently, a great many other, less wealthy Canadians forego travel, home/ vehicle upgrades and other, “taken for granted” luxuries of the Global North, even though they receive net carbon rebate benefits thanks to the taxes paid by the profligate rich.
2. It's a mathematical reality that, if a certain variable X (calculated, say, by summing up several other variables xsub1 .. xsubn) has a maximum allowed value – let’s call it… oh… a cap, then all of the xsub components must themselves be capped. Thus, if X represents the total emissions permitted for country, and each xsub represents an individual, then each individual must be capped. It can’t be otherwise.
Thus, if you want direct, not to mention equitable policy, then give everyone a capped carbon allowance to spend (or sell) as they wish. This is easier to conceive of for people than it is for businesses; it's not obvious to me how such carbon allowances would be handled in the commercial space (“pay to play”, perhaps?).
And what about putting a price on air at the gas station?
Are you aware how much effect that tire air pressure has on gas mileage? Do you think it's in the oil companies' interest to make it easy for customers to maintain correct pressures. Spoiler: NO!
https://tinyurl.com/2myave6t
Direct, as in a clear, straight-line link between the consumer responsible for combustion emissions and the consumer cost of those emissions. The consumer pays for his choices — and can make his choices in full knowledge of the costs. The relationship between my consumer choices and my costs is direct and linear.
Where the costs of rules, regulations, and subsidies are shifted to taxpayers, there is no link between my fossil fuel consumption / emissions / choices and the costs I bear as a taxpayer. I.e., taxpayers end up paying for other people's consumer choices as well as for society's and industry's choices.
EV subsidies. Transit funding. Carbon capture and storage subsidies. Heat pump subsidies. Government investments and subsidies for renewable energy and R&D. SMRs from start to finish. Fuel switching for marine shipping and power plants. Subsidies for municipal infrastructure upgrades, including solar panels. Methane regulations (stopping fugitive emissions and leaks). Financial supports for coal workers and communities.
While many such regulations and subsidies may be useful and necessary, there is no direct relationship to my own consumption habits — and therefore no personal incentive to reduce my own emissions.
KP: "If an end user gets more, carbon-taxed bang for the buck, they will use more product and create more emissions, increasing taxes notwithstanding"
Mystifying. Please explain.
KP: "Oil companies don’t like caps. Which is a great reason for caps being the (DIRECT) policy Instrument of choice."
A direct policy measure for industry, but not for consumers. The higher production costs are passed on to consumers, but the costs are hidden.
I don't know how you would cap consumer emissions. First, you would be need to be able to track, count, and measure them for every consumer. Then you would need to enforce the cap on millions of consumers.
The complication and expense would far outweigh its utility. Far simpler just to internalize the costs and charge accordingly. Hence, carbon pricing.
Geoffrey Pounder wrote:
“Direct, as in a clear, straight-line link between the consumer responsible for combustion emissions and the consumer cost of those emissions. The consumer pays for his choices — and can make his choices in full knowledge of the costs. The relationship between my consumer choices and my costs is direct and linear.”
The direct connection of a carbon tax is to the price of, say, oil. At best, and what is hoped for, is that price with eventually, indirectly “encourage” a reduction in emissions by reducing the amount of the stuff a consumer buys and burns.
Which leads to my apparently mystifying paragraph, and Jevon’s paradox; a topic we’ve previously gone around the bush on.
It's simple. In the face of rising gas prices (due, for the sake of argument, to rising carbon taxes) let’s say a consumer decides to buy a more fuel-efficient vehicle whereby the efficiency permits, say, the consumer to achieve what is desired (a trip to the cottage) without increased cost. Perhaps the newfound efficiency actually reduces the cost to get to the cottage compared to what it was prior to an increase or two in carbon taxes. So, more bang for the buck. Perhaps encouraging more cottage trips.
“A direct policy measure for industry, but not for consumers. The higher production costs are passed on to consumers, but the costs are hidden.”
Mine was a reference to a consumer cap/ allowance. I had indicated that I believe challenges exist with an implementation in the commercial space. It’s pretty clear, nonetheless, that reducing national emissions each year requires, effectively, a cap on econony-wide emissions. Wouldn't you agree?
“I don't know how you would cap consumer emissions.”
Aren’t you wishing for an effective cap via carbon prices? If not, explain to me their point.
There are limited base uses for fossils for individuals:
1. Transportation fuels (gas, diesel, methane).
2. Home heating (methane, some electricity)
(I thought I had 3 obvious ones but can’t think of the third)
It’s easy enough to conceive of a system that periodically allocates/ deposits to each person a carbon allowance. Deductions are made from the individual carbon account when purchases are made. One could carry a “carbon card” (used at the pump much like a rewards card) or simply link a carbon account to a payment card. The receipt shows both the price for the gas and the carbon deduction.
For home heating, the carbon account is linked directly to the fuel account at the supplier. Same reporting on the receipt of both fuel cost and carbon deduction.
Ideally, it would also apply to such things as cruises, airline travel, and any other fossil-fueled transportation (not to mention embedded carbon in finished goods. We are so quick to chastise China for their emissions while ignoring the fact that a portion of those, commensurate with the quantity of our imports, are OUR offshored emissions.)
If a person has beaucoup disposable income, they can buy as much fuel as their piggy bank holdings permit, regardless of carbon prices. If, instead, they have a personal carbon allowance, they are capped.
Last one.
“The complication and expense would far outweigh its utility.”
If carbon taxes are not sufficient to the task – I generally support taxation on pollution, to be clear – where lies their utility?
G P, I have no idea if you believe we can get out of this without behaviour change; I don’t. Carbon taxes, because they might cause some rejigging of personal and family expenses rather than a clear and present reduction in emissions, can be, perhaps, considered as merely reshuffling the deck chairs. If you disagree, please show me the graph that elucidates – with supporting empirical evidence – the expected annual reductions in national emissions via carbon taxes sufficient to do the job.
Good discussion. You're making me think.
JEVON’S PARADOX
Jevon’s Paradox notwithstanding, it is a stretch to suggest that rising fuel prices will increase fuel consumption overall. Especially given the proliferation of non-fossil fuel alternatives. Jevon’s Paradox efficiency rebounds may offset some of the decline, but I see no evidence to suggest that such marginal increases will exceed it.
Allow me to quote the world's authority on the subject (Wikipedia) [phrases highlighted in all caps]:
"The issue has been re-examined by modern economists studying consumption rebound effects from improved energy efficiency. In addition to reducing the amount needed for a given use, improved efficiency also lowers the relative cost of using a resource, which increases the quantity demanded. This may counteract (TO SOME EXTENT) the reduction in use from improved efficiency. Additionally, improved efficiency increases real incomes and accelerates economic growth, further increasing the demand for resources. The Jevons paradox OCCURS WHEN THE EFFECT FROM INCREASED DEMAND PREDOMINATES, and the improved efficiency results in a faster rate of resource utilization.
"CONSIDERABLE DEBATE EXISTS ABOUT THE SIZE OF THE REBOUND in energy efficiency and the relevance of the Jevons paradox to energy conservation. Some dismiss the effect, while others worry that it may be self-defeating to pursue sustainability by increasing energy efficiency. Some environmental economists have proposed that efficiency gains be coupled with conservation policies that keep the cost of use the same (or higher) to avoid the Jevons paradox. Conservation policies that INCREASE COST OF USE (such as cap and trade or GREEN TAXES) can be used to control the rebound effect.
"… The Jevons paradox occurs when the rebound effect is greater than 100%, exceeding the original efficiency gains."
The effect from increased demand does not always predominate. The rebound effect is not always greater than 100%. Increasing the cost of use, e.g., through carbon pricing, limits the rebound effect.
If fuel costs drive the adoption of more fuel-efficient vehicle, presumably the cottage owner would purchase a more fuel-efficient vehicle even without carbon pricing. Gas is plenty expensive already.
Or the cottage owner might purchase an EV — and reduce his fuel consumption even more. By 2035, he will not be able to buy a new ICE vehicle in Canada (if the current plan remains in force).
The ultimate goal is not to replace ICE cars with more fuel-efficient ICE cars, but with public transit and EVs. Likewise, heat pumps replace gas furnaces. The most fuel-efficient alternatives avoid the use of fossil-fuels altogether.
Other adaptations/modifications reduce energy use in toto. More home insulation, better windows, weather stripping, smart thermostats, energy-efficient appliances and lighting, etc. No one with a gas furnace will burn more gas if they increase their home's energy efficiency. To maintain the same room temperature, they will consume less.
Jevon's Paradox has its limits. Who uses ten times more LEDs to light the room because they are more efficient? Who heats his house to 35° because it costs the same now as it used to cost to heat the house to 18°C? Who eats twice as much broccoli when it sells for half price? Who drives to work more than once a day after he buys a more fuel-efficient car? Who cooks his frozen lasagna at twice the temperature for twice as long because power rates drop? Who plays his stereo twice as loud after he installs solar panels?
Jevon's Paradox may yet apply: If our global per capita carbon/energy and resources footprint is halved, but population doubles, our net footprint remains unchanged.
If cheaper EVs with half the lifetime emissions replace ICE cars, but car use doubles, especially in the developing world, our total driving footprint remains the same.
Is it fair to blame/credit the carbon "tax" for the Jevon's Paradox effect? Jevon's premise is the adoption of more efficient technologies with the same benefits at lower per-unit cost. While higher fossil fuel prices may spur the creation and adoption of more efficient technologies, the rebound effect fundamentally depends on the new technology.
In reality, the carbon tax accounts for a small fraction of fuel taxes and fuel cost increases. In Canada, the carbon tax adds 17.6 cents so far to the cost of a litre of gasoline --- far less than the normal volatility of gas prices.
CONSUMER CAP
KP: "Aren’t you wishing for an effective cap via carbon prices?"
Indeed. Effectively, carbon pricing creates a virtual cap, not an actual one.
KP: "If a person has beaucoup disposable income, they can buy as much fuel as their piggy bank holdings permit, regardless of carbon prices."
Only to a certain point. Once the greener non-FF alternatives become cheaper (ticket price and/or lifetime cost), even millionaires will tend to choose the cheaper alternative. Electrified options are often more reliable, with fewer parts, and lower maintenance and repair costs. Why pay more for an inferior product?
How to account for the energy consumed and charged by one household for the benefit of another?
Tom organizes a car pool with three buddies to drive to work downtown. Tom drives the car. Tom fills the tank. Tom uses his personal carbon card at the gas station.
Bob uses his snowblower to clear his elderly neighbors' sidewalks and driveway. Bob buys the gas.
Rick uses his riding mower in his lawn care business. Rick buys the gas.
Dorothy bakes cakes and pies for school bakesales. The pastries are baked at her house, but consumed by other families. Dorothy uses her oven. Dorothy pays the power bill.
John grows a vegetable garden.
Tim shops at Sobey's.
Bill likes to eat out.
How to account for the emissions embedded in their different food choices throughout the year?
How to account for emissions embedded in groceries, furniture, electronics, clothing, recreation, etc.? Such an accounting system would be horrendously complex.
The real-world complexities and variations in our energy consumption habits preclude the consumer emissions cap you propose.
KP: "If carbon taxes are not sufficient to the task … where lies their utility?"
By itself, carbon pricing is not sufficient to the task. No one I know proposes carbon pricing as a silver bullet. It is one tool in the tool box. Essential, but not the only one.
KP: "Please show me the graph that elucidates – with supporting empirical evidence – the expected annual reductions in national emissions via carbon taxes sufficient to do the job."
To obtain that data requires two experiments:
1) In our current real-world scenario with carbon pricing.
2) In a contrafactual alternative-reality without carbon pricing.
Obviously, both experiments cannot be run at once. The best one can do is compare two similar nations, one with and the other without carbon pricing.
Meanwhile, population growth obscures the carbon pricing effect on emissions.
The current carbon price is too low. To be effective, the price on carbon pollution needs to rise far higher:
"Secret briefing says up to $300-per-tonne federal carbon tax by 2050 required to meet climate targets" (National Post, 2017)
Sorry I missed your previous comments from a year ago on Jevons Paradox and personal carbon allowance. I found them now.
A couple more issues with the personal carbon allowance:
I take the (diesel) bus five stops to Main Street. My neighbor takes the bus and LRT across the city to work. How to account for our different carbon shares?
In my apartment building, the gas-fired boiler provides heating. Another hot water heater for tap water. Heating consumption varies with apartment size and tenant. The number of tenants varies (vacancies).
How to account for each tenant's carbon share? If there are three people in the apartment, do we allocate a third of the apartment's share to each tenant?
How to compare the apartment dweller's heating emissions with the homeowner's across the street? What if I move from my apartment to a house halfway through the year?
How to account for the heating emissions of a five-member household with a two-member household? What if Junior goes to college for eight months? What if the grandparents stay the whole summer?
No accounting system can possibly capture the actual complexities and variations of real-life situations. Horrendously expensive even if it were possible.
1/4
In reply to Geoffrey Pounder:
It’s good to hone one’s arguments. But it’s work!
First, I think we are interpreting Jevons with some nuanced difference. Whereas I believe you are going on unit price of the good, I am focused on the cost of the resulting desired service provided by what is spent; i.e. the difference between “I’m going to buy some oil today” and “I’m going to the cottage today”.
“… it is a stretch to suggest that rising fuel prices will increase fuel consumption overall.”
I take your point but I suggest it’s not “rising fuel prices will increase fuel consumption overall” but “fuel consumption overall increases despite rising fuel prices”. What has happened to gas prices over the past, say, 50 or 60 years? I recall my mom stopping in at the local Esso station and asking for “two dollars worth”. I think that was about 4 gallons, but I don’t remember. I do recall that “two dollars worth” was good for a couple of days. Likely before the ’73 oil embargo. Global oil supply and demand has roughly doubled since then.
World oil supply and demand, 1971-2018 – Charts – Data & Statistics - IEA
https://www.iea.org/data-and-statistics/charts/world-oil-supply-and-dem…
Crude Oil Prices - 70 Year Historical Chart | MacroTrends (I haven’t tried to verify the data for this chart)
https://www.macrotrends.net/1369/crude-oil-price-history-chart
Gasoline price history in Canada (I believe this is not adjusted for inflation. Could find only since 1990).
Monthly average retail prices for gasoline and fuel oil, by geography (statcan.gc.ca)
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000101&pickMe…
cont...
2/4
I’m on-board with the notion that efficiency increases (i.e. decrease in the amount of a good needed for a specific service) ought to be offset with per unit price increases to, ideally (I think), maintain the cost for a given service with an eye to foiling Jevons. Electricity is a good place for this. But prevailing wisdom is that electricity should be cheap, and always plentiful.
Regardless, in discussing Jevons, I think it is key to differentiate the unit cost of a fuel and the cost of fuel needed to provide a given service.
“The most fuel-efficient alternatives avoid the use of fossil-fuels altogether.”
Given that about 2/3 of the energy, in a fossil fuel that is combusted for motive energy, is wasted (as heat), I agree. And, more generally, that amount of wasted energy (because fossils comprise so much of our total energy supply) equals about 2/3 of the total primary energy supply. It’s mind-boggling.
https://flowcharts.llnl.gov/commodities/energy
https://flowcharts.llnl.gov/sites/flowcharts/files/styles/orig/public/E…
That’s all I’ll say about Jevons.
You raised some questions about how a personal carbon allowance would work in a sharing economy (mow the neighbour’s lawn, etc.). My pithy response is: how does a sharing economy work now when one person pays an expense for a service provided to a neighbour? One doesn’t have a bottomless bank account for Good Samaritan activities; one wouldn’t have a bottomless carbon account, either.
cont...
3/4
Details of actually “paying back” or “gifting” carbon would need to be worked out. But, what would be the problem with a carbon e-transfer, just to pick a current analogue?
There is an enormous amount of embedded carbon in the products we buy. For example, building materials:
According to Architecture 2030 (I trust their publications, but there is lots of material on the topic), just three building materials – steel, concrete and aluminum – account for 23% of global emissions. You don’t think 23% needs to be accounted for?
Embodied Carbon Actions – Architecture 2030
https://www.architecture2030.org/embodied-carbon-actions/
Data to the rescue: Embodied carbon in buildings and the urgency of now | McKinsey
https://www.mckinsey.com/capabilities/operations/our-insights/data-to-t…
How Much Embodied Carbon Is In Your Building? | Buildings
https://www.buildings.com/resiliency-sustainability/article/10185869/ho…
If carbon is so important, than it is necessary to track carbon in supply chains. And, through data collection and economic forcings, make changes to supply chains accordingly to reduce emissions. If we can audit supply chains for other purposes (slavery and labour practices, fishing practices, forestry practices, etc.) we can maintain carbon balance sheets. Supply chains are very complex. Our society is very complex. The need to track carbon is great. It is entirely doable to have a dollar price and a carbon price on products. (And I realize that complexity in a society is not always a great thing).
cont...
4/4
I do think that you go off into the weeds when you talk about imagined scenarios of dread.
Depending on your transit system, you’re likely to pay a flat dollar rate. Or maybe you have zones with fare increments for each zone boundary crossed. It’s not complex, nor is it unexpected that fares aren’t entirely fair: someone traveling 2 kms may be paying the same fare as someone traveling 7 kms. A carbon account is analogous to a bank account.
Apartment living, same thing. Personally, I’d like to see each apartment individually metered for every consumable (heat, water, electricity, internet, etc). It is fairer. It also allows/ forces a person to be responsible for their lifestyle. If Fred in 3B leaves his patio door wide open at -30, his neighbours don’t want to be paying for his heat as is the case with a communal heating bill (included in rent). Again, a carbon account is analogous to a bank account. Same with Junior at college. Or at home. Depending on whether or not ‘everyone’ gets a carbon allowance (from Cindy Lou Hoo to Grandpa) parents can charge junior carbon rent as easily as dollar rent.
“What if I move from my apartment to a house halfway through the year?”
In that statement, and maybe others, what assumptions are you making about when and how often carbon credit are placed into one’s carbon account?
“No accounting system can possibly capture the actual complexities and variations of real-life situations. Horrendously expensive even if it were possible.”
And yet, we somehow make it work with money. :)
Correction :
I said "Given that about 2/3 of the energy, in a fossil fuel that is combusted for motive energy, is wasted" but it's actually worse.
"Only about 12%–30% of the energy from the fuel you put in a conventional vehicle is used to move it down the road..."
https://www.fueleconomy.gov/feg/atv.shtml
A axe-wielding Pierre Poilievre will make sure no carbon related levy or regulation survives his first six months in power. I would bet money that this will be his highest priority.
Next on the list could very well be our medicare system remodelled on anti-science ideology. Then justice as influenced by convoy lawyers and those who hate women. And affordable daycare (see comment on hating women), pharmacare and dental care.
Poilievre's fellow MPs are not the Harper Conservatives who ruled for a decade; he was Harper's chief attack dog who had to be tamed down a couple of notches. I think there is ample evidence in their rhetoric that these are the folks who will make Harper's failed promise to "change Canada forever" (paraphrased) come true.
Is the hatred of Trudeau so deep that the people will allow another party to go nuclear on federal policy? I'd like to think not, but there is so much brimstone being hurled at him that it may seem so, and voters will go with the guy that has nurtured their public rage with no explanation of how he will govern, other than to lift the axe and swing it.
One term under Poilievre would be a shock to everyone left of extreme right. Two terms with the hatchet man would indeed change Canada. Denmark is looking more like heaven with every mention of the word "axe."
Well said.
With Canadians being hit with a double whammy GST called CARBON TAX hitting the farmers with an extra cost of CARBON TAX has to have an effect on the price of groceries and if Joe Public can't see that and drool over TRUDEAU's claim we get more in return than we put in, then we certainly deserve the Government we put in.
Farmers should get a better break from the carbon tax. But don't try to hoodwink us that the price spikes at the pump and in natural gas-fired electricity in Alberta have anything to do with carbon pricing. Pin the blame directly on the fossil fuel industry that takes every opportunity to raise prices for consumers, and delays lowering them for as long as possible.
The carbon tax is at the very bottom of the list of factors causing inflation.
Also, it's now fashionable to blame Trudeau for everything, while ignoring the fact that there really is a rebate on the carbon tax. Trudeau can be blamed for a lot of things -- being weak on climate is my biggie -- but Poilievre is the devil incarnate who could wreak untold damage to the Canadian economy and trash every climate fighting policy, not to mention medicare, childcare, pharmacare, etc. etc. etc.
Your comment makes me wonder if you're OK with that.