EnviroEconomics.ca

Now for those of you who have spent anytime at a University know, the best definition for the institution is a group of anarchists who share a common parking lot. Generally, these are the folks who eviscerate first and argue points of fact later. This is why an open letter supporting a carbon tax and revenue recycling from 230 of these intellectual knife wielders matters – they all agree on the basic points. They buried their respective hatchets as it were and sent a message to the electorate (see coverage here). Indeed, as they themselves recognize:

That’s an astonishing number for academics not typically inclined to act collectively and quickly on policy issues.

The open letter can be found here:

But here are the main points:

1. Canada needs to act on climate change now.
2. Any substantive action will involve economic costs.
3. These economic impacts cannot be an excuse for inaction.
4. Pricing carbon is the best approach from an economic perspective.
1. Pricing allows each business and family to choose the response that is best and most efficient for them.
2. Pricing induces innovation.
3. Carbon is almost certainly under-priced right now.
5. Regulation is the most expensive way to meet a given climate change goal.
6. A carbon tax has the advantage of providing certainty in the price of carbon.
7. A cap and trade system provides certainty on the quantity of carbon emitted, but not on the price of carbon and can be a highly complex policy to implement.
8. Although carbon taxes have the most obvious effects on consumers, all carbon reduction policies increase the prices individuals face.
9. Price mechanisms can be regressive and our policy should address this.
10. A pricing mechanism can allow other taxes to be reduced and provide an opportunity to improve the tax system.

I particularly like point seven that follows point six – it basically reads: yes cap and trade can send a carbon price, but it is administratively ugly to implement, so why go there when a simple tax is available. And point five is directed at the Conservative Plan.

While the economists don’t fully support the Liberal plan:

“You can say that the Liberals have a carbon tax. Is it a good carbon tax? That’s a whole other question…This is not about influencing the election, it’s about clarifying debate.”

Make so mistake, by “clarifying the debate”, these 230 academics stealthily eviscerate the Conservative Plan.