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12 décembre 2018décembre 12, 2018

Quebecers don't want to pay for the carbon tax

The Globe and Mail, p. B4

Quebecers don't want to pay for the carbon tax

The Pact for the Transition in Quebec and the latest IPCC report on the effects of climate change have given rise to much debate in recent weeks in Quebec. The Montreal Economic Institute asked Leger to poll the opinions of Quebeckers regarding carbon taxation and the province’s greenhouse gas (GHG) reduction targets. The results of the poll will certainly give residents and decision makers some things to consider.

When it comes to the principle of the new carbon tax, 62 per cent of Quebeckers are in favour, while 25 per cent are against. This support in principle climbs to 76 per cent if the tax allows the GHG reduction targets to be fully reached. Only 37 per cent of Quebeckers, though, continue to support the tax if it does not allow those targets to be fully reached.

However, even though they are prepared under certain circumstances to support the taxing of carbon, only 40 per cent of Quebeckers would be prepared to pay more for a litre of gasoline from this tax. A little less than a quarter of Quebeckers (24 per cent) are ready to pay up to 5 cents more a litre, and less than 9 per cent up to 10 cents. And only 2 per cent of Quebeckers are prepared to pay up to 50 cents more a litre, yet this is the minimum needed for Quebec to fully reach its GHG reduction targets, according to studies.

How can we reconcile these results? Even though Quebeckers agree with the GHG reduction targets, and some have signed petitions to that effect, they undoubtedly find that they are already sufficiently taxed, to put it mildly. The idea of an additional tax, which would have to be very high in order to really be effective, puts them off completely.

What may seem at first glance like a contradiction on the part of Quebeckers is simply a manifestation of their rationality when an idea such as the carbon tax is brought into the real world, with its associated costs. In sum, when presented with both the benefits and the costs, Quebeckers massively reject the suggestion of a carbon tax set at a level likely to have the sought-after impact on the consumption of fossil fuels.

This observation is not unique to Quebec. The massive “yellow vest” protests in France started with the proposal to increase the carbon tax on gasoline and diesel by a few cents a litre. Of course, the taxation level is already much higher there than in Quebec, but the phenomenon should serve as a warning to governments: There’s a limit to overtaxing people.

If the carbon tax cannot be raised to levels that would allow the targets to be reached, what solutions remain? A part of the answer is surely the elaboration of good public policies. Yet we are often far from this ideal. Subsidizing the McInnis Cement plant in the Gaspé region helped create the province’s biggest polluter. Subsidies for the purchase of electric vehicles, for their part, cost a fortune for each tonne of GHGs not emitted. As for the money spent by the Green Fund, its (lack of) impact on the reduction of emissions in the province speaks for itself and represents an inexcusable waste of taxpayer money.

The real solution resides in technological transition, and these transitions take time. For example, coal, which started to be used in a major way around 1800, reached its peak in the world’s energy mix around 1910, even though less-dirty oil had started to replace it by the end of the 19th century. Yet in 2018, coal still represents about 25 per cent of primary energy. The same transition is now happening for oil. The arrival of new technologies that emit less GHGs will happen, but it will take time.

We can of course make laudable efforts to reduce our CO2 emissions, but the solution lies above all in technological innovation and good public policies, not higher taxes.

Germain Belzile est chercheur associé senior à l'IEDM. Il signe ce texte à titre personnel.


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