Setting price for carbon a good strategy

Pembina Institute favours the levy on carbon pricing stating it provides cost certainty

  • Tue Oct 18th, 2016 11:00am
  • News

By Jordie Dwyer

A levy on carbon is the right way to go, according to one environmental lobby group.

The Alberta-based Pembina Institute which also is an advocate for reducing fossil fuel usage favours the levy stating itprovides cost certainty and takes the decision-making out of the hands of government.

“There is a clear consensus, among business and economists, that putting a price on carbon is the best approach,” said SaraHastings-Simon, the institute’s clean energy program director.

“The alternative is direct regulations that will be far less effective. The carbon pricing option gives business the flexibility torespond and change, rather than having regulations imposed on them that can’t be anticipated or a new government couldchange.”

She added it is that market approach letting business pick what they can do to reduce emissions and buy-in is moreeffective and less costly.

“It’s better for business to decide than it is for government to be making those decisions for them,” Hastings-Simonsexplained.

The fact that the levy has the support of some of Canada’s largest emitters such as Suncor and Unilever, according toHastings-Simons, is an example this is the right road to travel.

As for consumers, the institute does not deny it will hurt some, but admitted the provincial rebate will lessen the hit tothose in the low and medium income categories.

“In Alberta, 55 per cent (of people) are in that category and there will be a real impact on them. You can’t wave your handsin the air and say they do not matter,” she said.

“However, the rebates ensure those people are protected and they might even provide some incentive for them to chooseoptions that will reduce their carbon emissions.”

She suggests that as the price rises as in the federal government plan the impact will be addressed by both businessand taxpayers.

“It’s important that the plans not start out at like $100, as no one would have a chance to make changes like to a homeor car. It’s about enabling people to do better. Everyone prefers clarity instead of regulation,” explained Hastings-Simon.

Alberta’s official opposition, the Wildrose Party, are against the carbon levy calling it a ‘tax’ that leader Brian Jeanstated last week they would repeal it if they were elected as the next government and that it would cost Alberta’s an averageof $1,000 each.

Meanwhile, the only evidence the Wildrose has produced in defence of their position comes with the claim of a leakedgovernment document from June. In it the Wildrose claim that it shows the levy would mean a drop of 1.5 per cent inprovincial gross domestic product along with a decline in oil exports, a loss of 15,000 job and a $4 billion drop inhousehold income.

However, neither the provincial government nor the Wildrose have come up with anything to back up or refute thatinformation.

Starting in 2017, Alberta will apply a $20 per tonne price on carbon rising to $30 in 2018 while the federalgovernment will impose a carbon floor price of $10 in 2018 that will increase to $50 by 2022.