The conservative case for a carbon tax

Jonathon Kay over at the National Post, lays out the conservative case for a carbon tax, and while he has some legitimate complaints about Dion’s plan, at least he is engaging in honest debate.

A carbon tax can actually make government smaller.

Right now, Western governments control and tax the use of carbon fuels through a bewildering variety of economic interventions. These include everything from fleet-wide fuel-economy standards for auto manufacturers, to toll booths, to ethanol subsidies, to small-car purchase rebates, to alternative-power research grants. By monetizing the social cost of carbon usage in a generic way, a carbon tax could replace all of these programs through one simple, fine-tunable microeconomic mechanism. Overnight, a whole army of green lobbyists, bureaucrats and environmental consultants could be turned away from the public trough.

A carbon tax is a (relatively) flat tax.

Since a carbon tax is essentially a consumption tax, it would help chip away at the massive bias against the wealthy contained in our “progressive” income tax system. That’s because wealthy people typically spend a much lower percentage of their income on consumption than do the poor and middle-class. If a carbon tax were applied in a revenue-neutral way — with revenues offset by across-the-board reductions in income tax or, better yet, capital-gains and business taxes — Canada would be a nation far more welcoming to the successful and the talented.

A carbon tax can help create a more socially humane, family-friendly society.

Many people casually associate the word “conservative” with unfettered capitalism and mindless consumerism. That is a fallacy. A true conservative in the Edmund Burke mold is suspicious of any revolutionary creed that challenges the established qualities of a humane society, especially a creed — such as unbridled materialism — that corrodes family life and human spirituality.

The auto-dependant, air-conditioned, eight-lane suburban lifestyle made possible by cheap oil has created a nightmare not only for our environment, but also for family dynamics and civil society as a whole. Millions of Canadian fathers and mothers now spend little time with their family — because their early mornings and evenings are spent alone, in metal boxes, fighting traffic.

Modern suburban developments have no sidewalks — because no one walks. Nor does anyone spend time mingling in mixed-use, high-density commercial areas. They are too busy navigating that other creature of cheap oil: the local megamall.

A carbon tax would improve society along conservative lines by encouraging people to live closer to their places of work. It would discourage the inhabitation of large, impersonal swathes of tract housing in favour of higher-density apartments and townhouses located closer to parks, schools and downtown shops — the traditional breeding grounds of civil society.

A carbon tax would fight terrorism and rogue power.

This point cannot be repeated often enough — especially for the benefit of those red-meat conservatives cruising around with right-wing bumper stickers affixed to the back of their eight-cylinder pick-up trucks: When we pay US$140 a barrel for oil, we are enriching some of the most dangerous regimes on earth — including Saudi Arabia, Venezuela and Iran. At worst, this means we are literally funding the nukes and terrorists that threaten to blow up Tel Aviv and London. At best, it means sucking up to the likes of Vladimir Putin and Saudi Arabia’s Royal Family. Simply put, it is impossible to maintain any semblance of a principled conservative foreign policy when your #1 enemies are also the pushers feeding your oil addiction. A carbon tax wouldn’t end this dependency entirely, but it could significantly move the West’s effective demand curve for oil downward and to the left. And it would mean that a greater share of the West’s energy needs could be satisfied by home-grown sources. Billions in windfall profits would be redirected from the coffers of Hugo Chavez and Mahmoud Ahmadinejad to those of George W. Bush and Stephen Harper.

I find his third point the most interesting, because it is exactly that point which many so-called conservatives use to criticize ‘environmentalists’ or anyone else who sees the direction our cities are heading as problematic. It is very refreshing to see a conservative coming to that same realization. It is even more refreshing to see prominent conservatives who remember that caring for the environment is a left wing issue.

2 thoughts on “The conservative case for a carbon tax

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  1. Of course, points 1 and 2 illustrate why many left-leaning people (including myself) are wary of the tax. I don’t want a smaller government, or flat taxes. I worry that if the carbon tax is at all successful at lowering use of carbon (and thus lowering overall tax base), the result will be a government financially crippled and unable to do any social programs.

  2. My position on the size of government is that it should be as small as possible to achieve its’ stated goals, and no smaller. The right and left can argue all they want about what a government’s stated goals should be, but having a government that is larger than what is necessary is inefficient and costs us taxpayers more money.

    The current system of regulating carbon is is massively inefficient. Carbon tax and a cap and trade system are means to the same end (a price on carbon), the main difference is which one is more efficient, and while in theory both are equally efficient in practice a carbon tax (if properly implemented) should be more efficient, more transparent and less susceptible to gaming. That is why I am a strong supporter of a carbon tax.

    As for what happens when the tax base shrinks (as our emissions lower) if a tax is properly implemented and revenue neutral the total money going into government coffers will remain the same. Politicians have two choice to ensure this happens, continue increasing the carbon tax so as the tax base decreases the tax rate increases to keep the money collected from the tax equal. The second option would be increase taxes as people emit less carbon (and thus pay less tax). This would preferably be an increase to consumption taxes, rather than income taxes. Realistically a combination of both options would be implemented.

    As for flat taxes, I agree. I don’t want a flat tax, but it is worth noting that the Liberal proposal is nothing of the sort, and Kay (who does support a flat tax) strongly criticizes the Liberal plan for that. Carbon taxes can be implemented to be progressive of flat. It depends entirely of the plan being implemented.

    As I stated in the post, the positive aspect of Kay’s article is that it is an honest debate, which is far better than the dishonest attacks we have seen so far.

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