The debate over Trudeau’s so-called “carbon tax” is shaping up to be a defining issue in Canada’s 2019 federal election. Since Prime Minister Justin Trudeau joined most of the country’s premiers in 2016 to sign a “pan-Canadian” agreement taxing carbon consumption, an alliance of federal and provincial Conservative leaders have made opposition to the carbon pricing plan a central focus of their campaign against the Liberals. Yet the Conservatives’ rhetoric, which evokes concerns over the tax’s impact on the cost of living, only masks the fact that their own policies amount to nothing but corporate welfare—the chief result of which will be to worsen economic inequality without solving the environmental crisis. The hard truth, unmentionable by bourgeois politicians, is that capitalism is incapable of adequately responding to the threat posed by climate change.
The basis of the federal carbon tax is the Pan-Canadian Framework on Clean Growth and Climate Change, which Trudeau and all but one of the premiers at the time signed in December 2016. The framework committed each of Canada’s provinces to putting a price on carbon consumption by 2018. Should any provinces fail to put forward a carbon pricing plan of their own, they would have to adopt a carbon pricing scheme imposed by the federal government. That deadline now passed, federal standards will take effect in in Saskatchewan, Manitoba, and New Brunswick in April 2019, and Yukon and Nunavut in July.
The Liberal carbon tax
Under the details of the federal carbon pricing plan, carbon will initially be taxed at $20 per tonne, or 4.4 cents per litre of gasoline, going up to $50 in 2020. The tax applies to “oil products such as gasoline and diesel, natural gas, and coal-fired electricity.” Households will receive rebates, likely funded in part by revenue from the carbon tax. The precise amount of these rebates will vary depending on the number of people living in each household. The cost of the tax varies from province to province, due to differences in the average reliance on fossil fuels.
For big business, a different system is in place. As described by The Globe and Mail, “Large industrial emitters […] will be taxed on a portion of their emissions, based on how efficient they are relative to industrial peers. […] This is meant to protect industrial competitiveness while still providing an incentive for companies to reduce emissions.” In reality, that portion will be bizarrely low for industries with some of the highest carbon emissions—reflecting the power of big business in a capitalist state meant to serve their interests. The majority of the oil and gas sector, for example, will be exempt from federal carbon pricing, with an estimated 80 per cent of emissions going untaxed.
The Liberal carbon tax will apply in provinces without their own announced climate change plans. Existing provincial plans range from a similar carbon tax in B.C.—which taxes carbon at $30 per tonne, or seven cents per litre of gasoline—to cap-and-trade, a system in which the government sets limits on carbon emissions and companies must either reduce their emissions or purchase carbon credits from other firms.
A cap-and-trade system is currently in place in Quebec, where it was adopted by the provincial Liberal government in 2011. Unfortunately, cap-and-trade is unreliable in reducing emissions. It can be gamed by industry lobbyists, who convince the government to allocate more free permits to the companies they represent, and by the threat of capital flight. Such was the case in Quebec, where the provincial government handed out emissions credits for free to industrial polluters in order to prevent companies from relocating to areas where there were no pricing schemes for carbon. The chief effect of cap-and-trade is to create a large speculative bubble through trading carbon credits. Meanwhile, companies that have to buy expensive carbon permits can pass these costs on to consumers in the form of higher prices for items such as home heating fuels and gasoline.
What would be the combined effect of the federal carbon tax in conjunction with the provincial plans? Even under the most optimistic forecasts, Canada will not even come close to achieving the emission reduction targets that Trudeau committed the country to when he signed the Paris Agreement in 2015—targets that were already too low to keep the global temperature increase beyond preindustrial levels below 2 degrees Celsius, as hoped by climate scientists. The Globe and Mail reports:
By one federal estimate, the combined federal and provincial carbon-pricing plans would reduce greenhouse-gas emissions by up to 60 million tonnes in 2020, equivalent to 8.3 per cent of the country’s emissions in 2015. But even with those reductions, plus the phaseout of coal-generated power and other energy-efficiency measures, Canada would still fall short of its total promised emission cuts for 2030 by about 79 million tonnes, Environment and Climate Change Canada said last December. Getting all the way to compliance with the 2015 Paris climate-change accord will require faster adoption of electric vehicles and public-transit improvements, the ministry said.
The ineffectiveness and contradictory nature of Liberal, and by extension, capitalist efforts to address climate change is clearly demonstrated by the fact that even as Trudeau imposes a carbon tax to reduce greenhouse-gas emissions, he is spending billions of taxpayer money on a bailout to Kinder Morgan to build the Trans Mountain pipeline. Over the express opposition of First Nations such as the Wet’suwet’en to whom he had previously pledged to deal with on a “nation-to-nation” basis, Trudeau is determined to use the full power of the Canadian state to build a pipeline that will drastically increase the country’s greenhouse-gas emissions, making a mockery of any efforts to reduce emissions through piecemeal measures such as a carbon tax.
The Conservative response: corporate welfare
In December 2018, a widely ridiculed Maclean’s magazine cover trumpeted federal Conservative leader Andrew Scheer and provincial Conservative leaders Doug Ford (Ontario), Jason Kenney (Alberta), Scott Moe (Saskatchewan), and Brian Pallister (Manitoba) as “The resistance”. Summarizing the accompanying article, it elaborated: “A powerful new alliance of conservative leaders is taking a stand against the Liberals’ carbon tax plan. Welcome to Justin Trudeau’s worst nightmare.”
Meme-worthy qualities aside, the cover made clear that opposition to the carbon tax was to be the centerpiece of Conservative strategy heading into 2019. The article inside quoted an Instagram post made by Kenney in which he declared, “We are united in stopping the Trudeau-NDP agenda,” as well as a speech by former prime minister Stephen Harper, “Let the other guys do a carbon tax, because we can all win the next federal and provincial elections on that issue alone.” Harper’s chief of staff from 2006 to 2008, Ian Brodie, was also quoted as he laid out the clear political calculus driving the Conservatives:
“There are many, many tools toward greenhouse gas reduction,” Brodie says. Economists believe carbon taxes are the most efﬁcient, in that they impose the lowest overall cost on an entire economy. “There’s nothing wrong with that—but it’s not neutral in how it falls on households. The core political problem, I think, is that it falls on households of commuters and is therefore geographically very efﬁcient at alienating voters in ways that are easy to take advantage of in a ﬁrst-past-the-post system.”
The argument that carbon taxes can adversely affect the standard of living for households is not an empty one. In an article for the website Ricochet, writer Caitlin Craven noted that people who live in the suburbs typically depend on cars to get around, and are facing a rising cost of living. Craven detailed the regressive impact of the carbon tax on those with lower incomes:
Gas tends to be an inelastic product, meaning that a change in price does not affect demand (unless that change is dramatic or demand is measured over a long period). Gas is particularly inelastic for those living in suburban areas with little to no access to public transit or other transportation options. This means that when taxes on gas go up, people are unlikely to be able to reduce their driving enough to make up the difference. […] It is not that people are unwilling to reduce their driving or seek out other forms of transportation — they are unable to do so.
The Liberals have promised rebates to to [sic] help individuals offset the costs, but as with GST credits, rebates don’t change the perception that life is getting more expensive. There is also the added moral element, in which the Liberals have argued that the rebates allow people to make better choices — like choosing public transit over cars, or retrofitting homes for greater energy efficiency. The rebate thus downloads change onto individuals, and is held over our heads like a carrot that gets bigger the more we are able to cut from our consumption. Personally, I have yet to see where a lot of these choices exist in the suburbs.
Working class people living in the suburbs who will be paying the carbon tax, she added, often cannot afford to buy electric vehicles, to “choose” lifestyles that will lead to lower emissions, or to live in communities within walkable distance of grocery stores.
In this regard, the basis for opposition to carbon tax appears to be sound. Yet what is the proposed alternative put forward by the Conservatives? It is here that the cynicism and emptiness of their appeals to economic pressures on Canadian households are laid bare.
Maclean’s quotes Manitoba Premier Brian Pallister as insisting that the Conservatives do have a plan to reduce carbon emissions: ““We’re taking action to ﬁght climate change, but we reject the federal government’s imposition of a two-tier carbon tax scheme,” he told the magazine. “Our climate and green plan focuses on cleaner water, conservation of nature, economic opportunity and effective steps to reduce emissions.” This all sounds very nice. But what does it mean concretely in terms of Conservative policy?
The answer was provided by Ontario Premier Doug Ford, who announced his government’s climate change policy in opposition to the federal Liberals’ carbon tax after dumping the cap-and-trade program supported by Ontario’s previous Liberal government. The Conservative plan revolves around using public money to “entice” companies to reduce greenhouse-gas emissions. Essentially, it is an act of corporate welfare in which taxpayers subsidize big business, in order to pay off polluters.
The plan begins by lowering the bar, reducing Ontario’s obligation to reduce carbon emissions by 25 per cent from the already too-low targets set out by the Paris accord. Its centrepiece is the $400-million Ontario Carbon Trust, through which the provincial government pays private enterprises to develop clean technologies to reduce carbon emissions. This fund includes $50 million for a “reverse auction”, in which businesses send in proposals for emission-reduction projects and bid on government contracts that will be awarded based on the reduction in greenhouse gas emissions that will cost the least.
Other aspects of the plan include measures to monitor waste and stormwater in provincial waterways, and to somehow reduce litter. These measures are either vague and ineffective, or are primarily designed to reward Ford’s big-business friends at public expense, rather than to reduce carbon emissions in the most effective and efficient manner possible.
Does the NDP offer an alternative?
Both the Liberal and Conservative plans are rendered ineffective for addressing climate change, relative to the severity of the threat, due to their inability to go beyond the framework of capitalism. Whatever good intentions might exist, the logic of capitalism prevents any solutions that might make inroads into the sacred right of private property.
Under capitalism, one priority overrides all else: the need to maximize profits. Solutions to a problem that threatens even the well-being of the entire human race will not be accepted if they interfere with the drive to profit, which is why tepid proposals such as the Liberals’ carbon tax must still work around the need of companies to remain profitable. Meanwhile, lobbying efforts by powerful industries such as the oil and gas sector result in exemptions that further decrease the effectiveness of the solutions.
As parties of big business, the Liberals and Conservatives are thus unable to offer effective solutions to address climate change. One would hope that the NDP, with historic links to the labour movement, would be capable of offering an alternative. Sadly, the record of NDP governments in power illustrates that the leadership of the party is unwilling to break with capitalism. As a result, their climate policies largely mirror those of the Liberal Party, with all the same weaknesses and defects.
In B.C., the provincial Liberal government imposed a carbon tax which is no more effective than its federal Liberal counterpart in reducing overall emissions, and whose costs are ultimately passed on to consumers. The need to maintain the profitability of companies that operate in the province further hobbles the effectiveness of efforts to reduce emissions. The NDP government of Premier John Horgan, for example, has offered tax incentives to LNG Canada to support its $40-billion construction of a liquefied natural gas project in Kitimat. The province has attempted to argue that the project will have the lowest greenhouse gas emissions of any large LNG facility in the world. “Low emission” or not, operation of such industrial projects will continue to worsen climate change through their heavy carbon footprint.
Meanwhile, in Alberta, NDP Premier Rachel Notley has become a fanatical champion of the Trans Mountain pipeline. In a quixotic effort to beat the United Conservative Party at their own game by offering the most slavish support to the province’s oil barons, Notley has all but abandoned any real efforts to fight climate change in favour of the short-term profits generated by the pipeline—little if any of which will trickle down to working class Albertans.
Real solutions impossible under capitalism
All of the aforementioned climate policies underscore the paradox of attempting to solve climate change within the parameters of the main problem, capitalism. Adequately responding to climate change means transitioning away from fossil fuels towards sustainable energy as soon as possible, while preserving good jobs and protecting the livelihoods of those affected. Capitalism has proven itself incapable of carrying out this demand of history. Yet all the proposed solutions of capitalist governments will at best make a minor dent in overall emissions.
The pathetic weakness of Liberal, Tory, and NDP plans in comparison to the goals that must be achieved to avert ecological disaster lie in their adherence to the logic of capitalism, according to which private profit is the be-all and end-all, and any plan to address climate change must work around that. Carbon taxes are ineffectual, regressive, and in any case are confounded by the economic demands of capital to build projects such as pipelines. Conservative proposals amount to subsidies for big business, with many of those funds going to inflated CEO salaries, etc., instead of directly funding the research and costs necessary to quickly transition away from fossil fuels.
The chief obstacles preventing us from addressing climate change are private ownership of the means of production, and the contradiction of individual nation-states in a globalized economy facing a global crisis. A small number of companies hold vast control over our lives and our planet. Only 100 companies are responsible for 71 per cent of global carbon emissions. The future of humanity requires that the resources and technology that today are monopolized in the hands of a wealthy few are used to preserve the lives of the vast majority, by nationalizing these companies and running them under democratic workers’ control.
For a socialist solution to climate change!
Under a socialist plan of production, land and vital industries such as energy, transportation, logging, and mining would be taken under public ownership and directed towards the development of alternatives to fossil fuels, including funding research into green energy sources. Such a transformation would enable us to transition as quickly as possible to a sustainable economy, protecting both jobs and the environment.
The situation facing the GM plant in Oshawa is a perfect example of the overlap between environmental and economic needs. A capitalist economy, as we have seen with the announced closure of the plant in Oshawa, means the loss of thousands of jobs. A socialist economy can preserve jobs and reduce unemployment while utilizing society’s resources to transition as quickly as possible to more sustainable models for transportation and energy. In the case of GM, for example, a nationalized auto sector could retool the car culture that fuels global pollution by producing buses and streetcars for a program of free public transit, which would help reduce emissions.
Working people of the world cannot afford to wait any longer as the capitalist ruling class destroys our planet and our collective future, offering only half-hearted and ineffective reforms while it sacrifices generations to come on the altar of profit. The task before us is urgent, and it requires action. More than ever, we have nothing to lose but our chains, and a world to win.