Will a carbon price destroy the North?

Author:Robinson, David
Position::Economically Speaking

In one of the most anthologized poems in the English language, William Butler Yeats asked:

"What rough beast, its hour come round at last. Slouches towards Bethlehem to be born?"

The hour of the carbon fee has certainly come.

Both Ontario and Canada have committed to creating some kind of misshapen beast to fight climate change.

The beast is certainly rough, as well: nobody really knows what it will look like when it grows up.

The province's carbon beast might bite Northerners harder than Southerners, for example. Many believe Northerners drive greater distances than people in the south. We have worse public transit. On average we are a bit poorer and older than Southerners. And, baby, it's cold up here, so we use more fuel just to stay alive.

All this suggests that the average Northerner will pay a bigger share of income in carbon fees than the average Southerner.

The research actually shows that carbon fees will reduce incomes in rural and small urban communities more than in large cities.

The research also shows that the effect is tiny: the difference seems to be the kind of money you lose in your couch every year. Personally, I am disappointed by die research --I had hoped to argue for a special Northern Ontario Carbon Rebate.

Some politicians will try to make the case for a special Northern Carbon Allowance. B.C. has a rural rebate, but the real reason for it was to buy off the politically Conservative rural constituencies, not to correct any real injustice.

We will probably get a rebate for Northern Ontario if Liberal seats are in danger.

The big question is "revenue recycling." If the government collects money, it has to go somewhere.

In B.C. they give the carbon revenue back to the people.

Ontario plans to spend its money on a whole zoo of projects to help people adapt to a low-carbon lifestyle.

Northern Ontarians would be much better off with the B.C. plan.

With a higher percentage of older people and more relatively poor people, the B.C. plan would bring a small but worthwhile boost to the Northern economy.

In fact, the ideal scheme from the point of view of Northern Ontario would be something like the Greens' carbon-fee-and-dividend that provides an equal check for all citizens (and less for their children). This approach to revenue recycling makes the carbon fee virtually painless. It could be $100 a tonne and we wouldn't care.

Research shows that letting the minister of the environment, Glen R. Murray, decide how to spend...

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