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Carbon pricing: 165 economists argue in favor of it

Natasha Kumar By Natasha Kumar Mar27,2024

Carbon pricing: 165 ;economists argue in its favor

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GHG emissions from the Jean-Gaulin refinery (Énergie Valero), in Lévis, increased by 4.6% in 2022 to reach 1 .28 million tonnes of CO2 equivalent, making it the second most polluting establishment in Quebec after the Ciment McInnis cement plant in Port-Daniel-Gascons. (Archive photo)

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Late Tuesday afternoon, 165 economists, professors and department directors from the country's main universities signed an open letter to correct the facts on “carbon pricing”, because currently, according to them, , public debate on the subject “is not healthy” and is not based on reality.

It&#x27 Simon Fraser University professor emeritus Richard George Lipsey sent an email to his colleagues across the country on Tuesday asking them to sign the letter.

In the first paragraph of the letter, the man who is an officer of the Order of Canada summarizes the key points of the approach as follows: As economists, we are concerned about the significant threats linked to climate change. We encourage governments to use economically sound policies to reduce emissions at low cost, address Canadians' affordability concerns, maintain business competitiveness, and support Canada's transition to a low-carbon economy. carbon. Canada's carbon pricing policy does all that, writes Professor Lipsey.

According to the director of the economics department of the Laval University, Stephen Gordon, it is almost unanimous among economists that carbon pricing is the best way to fight climate change.

But the Conservative Party of Canada (PCC) sees things differently. For example, its leader Pierre Poilievre does not miss an opportunity to try to convince voters that this measure does not reduce GHGs, and that it is the main cause of inflation. /p>LoadingSix people presumed dead after Baltimore bridge collapse

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Mr. Poilievre calls for the government to remove carbon pricing altogether.

At no point in the letter do the economists refer to Pierre Poilievre, but they respond to the CCP leader's allegations.

Not only does carbon pricing reduce emissions, it does so at a lower cost than other approaches, according to economists who say it's a matter of common sense because when something costs more (in this case fossil fuels), people are using less of them, it's a matter of basic economics.

Carbon pricing is the least expensive approach because it allows people and businesses the flexibility to choose the best way to reduce their carbon footprint, reads the letter, which also emphasizes that Other methods, such as direct regulations, tend to be more intrusive and rigid, and cost more.

According to economics professors who signed the letter, the sharp increase in inflation in recent years has been caused mainly by the pandemic (disrupted supply chains, rapid growth in the money supply and pent-up demand) as well as the war in Ukraine .

This is why most advanced countries — whether or not they have a price on carbon — have experienced very similar inflation, the signatories point out.

They also point out that most families receive more money in rebates than in carbon pricing, especially those with low or middle incomes.

According to the dozens of economists who signed the letter, Canada's carbon pricing system is designed to help businesses reduce their emissions at low cost, while still being competitive in the new low-carbon global economy.

For sectors that emit the most GHGs, such as oil, steel and cement, there is an output-based carbon pricing system, meaning that 'low-emitting companies pay less while that the most emitting companies pay more, which provides a strong incentive for all companies to reduce their emissions.

Economists emphasize that the system is designed to maintain the competitiveness of industries by ensuring that the price of carbon does not hinder their ability to remain profitable and generate jobs in Canada while being competitive internationally.

They also believe that carbon pricing stimulates innovation by encouraging the creation and adoption of low-emission technologies of CO2, helping Canadian businesses across all sectors remain competitive in the global transition to a low-carbon economy.

According to the signatories, the critics are right, Canada could achieve its GHG reduction targets while abandoning carbon pricing, but it would cost much more.

They emphasize that the biggest opponents of carbon pricing do not propose alternative policies to reduce GHGs.

Canada faces many economic challenges. In a resource-scarce world, it seems unwise to abandon carbon pricing, only to replace it with more expensive methods of reducing emissions—or, even worse, to take no action to reduce emissions at all, perhaps. we read in the letter.

The economists conclude by writing that carbon pricing is the lowest-cost way to reduce emissions, spur green innovation, and support Canada's transition to a clean, prosperous economic future.

Charles Séguin, professor at the School of Management Sciences at UQAM, told The Canadian Press that of all federal policies to combat climate change, the carbon tax is both the best and the least understood and if we eliminate it, either we will not be able to reduce our emissions, or it will cost us much more. Probably both at the same time.

Professor Stephen Gordon added that he felt discouraged by the misinformation circulating about carbon pricing.

There are a lot of things being said about the carbon tax, it's still not well understood among the population, so any attempt to explain why economists are almost unanimous in agreeing ;press, we have to do it, because so far it seems that we are losing the battle, he explained.

The director of the economics department at Laval University recalled that it is a system similar to carbon pricing which made it possible to reduce sulfur dioxide (SO2) emissions and thus practically settled the problem of acid rain.

According to Environment Canada, in 2020, sulfur dioxide emissions in Canada and the United States had decreased by 78% and 92%, respectively compared to the level of 1990 emissions.

Called to react to the economists' letter, the Conservative Party of Canada redirected The Canadian Press to a press release in which the CCP indicates that instead of providing the relief Canadians desperately need, Justin Trudeau has decided to increase the carbon tax again on April 1. This will further increase the cost of living at the worst possible time.

The CPC press release mentions that Justin Trudeau's tax increase is contested by 70% of the population and 70% of prime ministers.

With information from The Canadian Press

Natasha Kumar

By Natasha Kumar

Natasha Kumar has been a reporter on the news desk since 2018. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Times Hub, Natasha Kumar worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my natasha@thetimeshub.in 1-800-268-7116

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