Environmental campaigners often struggle to convince the wider public about the need to combat climate change. Whilst most people agree with the principle of protecting the environment in the abstract, they are suspicious of many of the suggestions that environmentalists put forward to tackle the problem of climate change. This is partly due to the hypocrisy of large numbers of political leaders and celebrities, who fly on private planes and have large houses while telling the rest of the world to cut back on energy use.
It is also due however to the nature of the proposals, which tend to consist of higher taxes, more regulation and greater government spending. Since climate change is a long term problem (albeit with short term effects), it is difficult to convey the need for instant action, so the focus shifts to the negative aspects of the plan (higher taxes), as well as the continued growth in emissions in places like China.
This is why any green proposal should always be tax neutral, so that any increase in taxes on one thing (such as fossil fuels), should be balanced by a tax cut elsewhere. This has the benefit of demonstrating to the public that climate change is not just an excuse to raise taxes. It is heartening therefore to see the results of such a system, introduced in a Canadian province in 2008. British Columbia introduced a carbon tax in this year, and all the major parties as well as businesses were against it:
When arguing for the carbon tax, Mr Campbell faced the same political obstacles that have stymied such plans elsewhere. Only environmentalists were enthusiastic. Businesses feared it would add to costs and slow the economy. The leftish New Democratic Party (NDP) worried it would hurt the poor. But these fears have proved groundless. “The carbon tax has been good for the environment, good for taxpayers and it hasn’t hurt the economy,” says Stewart Elgie, a professor of law and economics at the University of Ottawa.
It helped that the law introducing the levy required its proceeds to be recycled back to individuals and companies as cuts in income taxes. The new tax was initially set at C$10 ($10) per tonne of carbon-dioxide emissions, rising by increments of C$5 per year to C$30 in 2012. It seems to be working as planned. Since 2008 fuel consumption per head in the province has dropped by 4.5%, more than elsewhere in Canada. British Columbians use less fuel than any other Canadians. And British Columbians pay lower income taxes too.
Would such a system here solve all environmental problems in a stroke? No, but it is better than the situation at the moment.
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Filed in: Economics,Environmentalism