Thursday, 1 October 2015

Is Alberta Inching Toward a Provincial Carbon Tax?

The third significant climate change-newsworthy event of last Thursday (in addition to the Pope's address to Congress and President Xi Jinping's announcement that China would institute a cap-and-trade program) was an address by Alberta Premier Rachel Notley to the Montreal Chamber of Commerce, in which she clearly balked at toeing the federal party line on climate change: Thomas Mulcair's call for a national cap-and-trade system. "A national cap-and-trade program may not be our best road forward." Canadians are polite; that was was a rejection. Give 'em hell, Rachel!

I may turn out to be a fool, but I find myself wondering what Alberta, as a province could do, other than a real, British Columbia-style, old fashioned carbon tax. Former Canadian oil executive Dennis McConaghy blogged a month ago that Canadian oil producers should embrace a carbon tax. Privately, Alberta oil executives have long been open to a carbon tax. The late Rick Hyndman, the widely respected senior economist for the Canadian Association of Petroleum Producers, espoused a carbon tax. Rick even quietly worked for Liberal Prime Minister Paul Martin, designing an ultimately ill-fated convoluted cap-and-trade scheme with a price floor and a price ceiling. Hmm, a cap-and-trade with a price floor and a price ceiling ... is that a carbon tax? Rick only smiled when I asked him that question.

We know that a carbon tax would win political points from economists. We know from the British Columbia experience that a carbon tax would win political points from environmentalists. If the Alberta oil industry is aboard (it is), who's left? It is ironic that people have always thought a carbon tax was a political non-starter. In Alberta, it really seems as if there is no place left to go.

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