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Trudeau’s carbon price idiotic, given Trump’s election
Unlike Justin Trudeau, Stephen Harper understood why it was reckless to impose a national carbon pricing scheme on Canada, unless the U.S. did the same.
The surprise victory of President-elect Donald Trump Tuesday has driven home the wisdom of Harper’s policy and the foolishness of Trudeau’s.
That’s because it’s going to cost Canadians billions of dollars more than they were already going to have to pay for a national carbon pricing scheme, that is essentially nothing more than a cash grab by the provinces.
Why? Because Trump, who has called man-made climate change a hoax, not only becomes U.S. president in 71 days, the Republicans also retained control of Congress.
That means a national carbon pricing program in the U.S., which would have been on life support even if Hillary Clinton had won, is dead on arrival.
Indeed, the UN’s 2015 Paris climate treaty itself is in critical condition.
News of Trump’s victory must have hit the ongoing, annual UN global warming gabfest in Marrakesh, Morocco like an earthquake.
That’s because Trump will soon have the power, backed by Congress, to wipe out Obama’s entire legacy on climate change.
That includes Obama’s subsidization of renewable energy, his Clean Power Plan, his ratification of the Paris treaty, and his side deal with China to reduce industrial greenhouse gas emissions linked to climate change.
Given that the U.S. is the planet’s second-largest emitter after China, and the leader of the developed world, if Trump pulls the U.S. out of the Paris treaty, and there’s no reason to think he won’t, the deal will be as good as dead.
The problem in Canada is that Trudeau, working hand-in-glove with premiers like Ontario’s Kathleen Wynne and Alberta’s Rachel Notley, is imposing a new cost of doing business on our industries through his national carbon pricing scheme, that doesn’t exist in the U.S.
That means Canadian industries will have to pay this new cost, not shared by their competitors in the U.S., our largest trading partner, which they will then pass along to us.
It also means the public subsidies our governments are already going to pay to Canadian industries to keep them from bolting to countries that don’t have a national carbon price — like the U.S. — will have to increase.
Industries fleeing from countries that have national carbon pricing schemes to ones that don’t is called “leakage”.
Preventing leakage is the reason Wynne’s government is giving away free carbon allowances to major industries under its cap-and-trade scheme starting next year, which essentially means giving them free public money.
Similarly, Notley is giving multi-billion-dollar subsidies to industries in Alberta not to flee that province when she introduces a carbon tax next year.
Unlike Trudeau, Harper understood the economic folly of imposing a national carbon price on our industries unless the U.S. did the same.
The only time Harper supported a national cap-and-trade scheme was in the 2008 election, when it looked like Obama was about to get a similar plan approved in the U.S., before it died in Congress.
Given Trump’s victory, proceeding with a national carbon price in Canada is ludicrous and will hurt our economy even more.
The question is, how much more money will Canadians have to pay in higher prices and taxes on almost all goods and services — which is what carbon pricing does — to satisfy Trudeau’s political ego on the world stage?