Viewpoint: Wynne’s hint of green makes others see red for wrong reasons

Kathleen Wynne recently roused a mob of her critics when she suggested her government might tax carbon, a greenhouse gas produced by the burning of fossil fuels. Since fossil fuels are so ubiquitous that a carbon tax would pick everybody’s pockets, Wynne’s critics took up torches and pitchforks before the protests got going.

The Financial Post ran articles that laid into the policy idea of a carbon tax. To no one’s surprise, Sun News went on the offensive with more bark than bite. The Progressive Conservative Party of Ontario also voiced its disapproval, reflexively launching a petition against the policy idea online.

Though there is nothing necessarily unconscionable in opposing a carbon tax, some of the objections being thrown about do raise the question, “Are these the objections of swindling hucksters?” From the clumsy, boorish arguments in the Sun’spages to the more sophisticated variety in The Financial Post, there is at least one argument being sold that is built of glass.

The argument often begins with a statement of what needs no stating: the carbon tax will make things more expensive. Then the argument takes a somewhat populist turn. As if it’s obvious, it’s argued that raising the cost of living either is unwarranted or will batter and bruise the economy. 

To begin to understand why this argument is suspiciously fragile, without getting too technical, one need only think of Centretown during the summer months. 

It’s during these months when the sounds of bulldozers, jackhammers, and other monstrous machines roar through parts of Centretown, leaving the residents who don’t want any more construction with no choice but to the mind the maddening noises. Economists would call these noises a “negative externality,” which in plainer English is a cost some people have forced others to bear.

Does the plainer description sound topical?

It ought to, because if what climate science says of the real world is true, and if climate change is, indeed, a net cost to society, then carbon emissions are a negative externality. While carbon emissions are the byproducts of a person driving his car, heating his house, and doing other things to improve his life, they are also costs he imposes on other people who haven’t benefited from any of his doings.

So it can’t necessarily be true that taxing carbon emissions is unwarranted. 

It also can’t necessarily be true, then, that taxing carbon emissions is damaging to the economy. Though the tax would reduce emissions by discouraging some economic activity from taking place, the tax would also lower the costs imposed on society through the emissions. It is, therefore, not clear whether economic wellbeing would shrink or grow without deeper study.

But here is the inconvenient truth: A now-dead English economist offered up deeper study about 100 years ago. This economist, Arthur Pigou, found that taxing negative externalities is economically beneficial. Pigou today would argue that policymakers could make society economically better off by foisting the right tax on harmful emissions because the benefits to the public outweigh the costs to emitters.

One may try, but it’s nearly impossible to argue with this Pigovian wisdom because it’s been rigorously established. It also appeals to one’s moral intuition: if my neighbour pollutes my yard, why should he not pay for the damage he’s done?

Still, away from the economist’s blackboard things are not so simple, which is why there’s nothing necessarily unconscionable in opposing a carbon tax. One might think climate change isn’t so hefty a problem because it does some good that counteracts the bad. Altogether, then, does climate change put us in the red or black? Or, one might think that properly calibrating a carbon tax is impossible, since to do it policymakers would need perfect knowledge. 

Though the list of legitimate concerns may go on, its length is not important. What’s important is that many of the critics raised none of the legitimate concerns in their lampooning of Wynne. Instead many of them took cheaper shots: in addition to making daft economic statements, they questioned Wynne’s true motives, curiously called the carbon tax the “new sin tax” and used the B.C. government’s carbon tax as a case against a hypothetical Ontario one, among others.

The public deserves better commentary. And so do the various causes Wynne’s critics represent. As a wise 19th-century Frenchman once said, “The worst thing that can happen to a good cause is, not to be skillfully attacked, but to be ineptly defended.”