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255 Canadian economists say rebated carbon taxes are preferrable to cap and trade and to no action

October 15th, 2008 No comments

More here.

The signatories agreed to the following 10 principles:

  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.

Too bad they didn’t take any initiative in discussing other helpful policy measures, such as eliminating corporate income taxes (or allowing immediate write-off of new investments), deregulating the power industry and eliminating subsidies for particular technologies.

h/t James Calder


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