Today, social media was set ablaze with “revelations” from a CBC report written by Paul Haavarstrud, suggesting that the oil industry in Alberta was calling for a carbon tax.
“Big Oil is urging Alberta’s new government to toughen up the province’s environmental policies.
To hear an oil industry chieftain advocate for a carbon tax, as Suncor’s Steve Williams did in front of a downtown Calgary crowd on Friday, may feel incongruous, but consider who those comments were directed to — the NDP — and the situation takes on a tinge of the surreal.“
There’s just one problem, and it won’t take a discerning reader very long to figure out precisely what it is. In fact, one needs to read no further than what Williams actually said.
“We think climate change is happening,” Suncor CEO Williams declared. “We think a broad-based carbon price is the right answer.”
Apparently Halvaarstrud read “carbon pricing” and began to read his own fantasies into it. The key phrase is, and remains “carbon pricing,” and a carbon tax is but one means of implementing carbon pricing.
Carbon pricing is far from an unthinkable concept from any perspective. But there’s an obvious tension in the argument over who will set that price. Under a carbon tax — clearly Halvaarstrud’s preference — government sets the price, government takes all the proceeds, and business pays the cost. Under cap-and-trade, the carbon price is set by the free market, benefit is reaped by those firms that are able to lower their emissions, and the cost is paid by those firms that are not. Hybrid systems mix features of the two.
The existing Specified Gas Emitters Regulation is something of a hybrid, combining caps, reductions targets, and trade features with penalties that require companies who fail to meet the requirements to pay into a technology fund which has made Alberta a world leader in emissions abatement technology — something that will prove critical in reducing emissions, both over the long and short run.
Some consider SGER to be flawed, specifically in that they don’t believe it applies a high enough per-tonne price on those firms that fail to meet their targets. These are obviously-correctable flaws, and the solutions are obvious.
The solution is obviously not to throw out a system which produces realizable green technologies, particularly in favour of one that only produces revenue for government while incurring inflation. Anyone who honestly believes that industry would embrace such a system at the cost of one which produces assets for industry needs to reconsider that very carefully.
To not do so is to indulge oneself in base wish fulfillment.