Carbon tax smackdown: Terence Corcoran says higher prices at the pump don’t mean fewer emissions

From The National Post

Newsflash: People do not change their behaviour in the face of rising prices when the product is essential to their economic success

Terence Corcoran
Terence Corcoran

May 25, 2019 9:14 AM EDT

“Be it resolved that a carbon tax is the policy Canada needs to fight climate change.”

Terence Corcoran and Andrew Coyne go head-to-head on whether a carbon tax is the proper tool to fight climate change.

According to the oracles of carbon economics, a carbon tax must be applauded because it is a “market-based” tax that acts just like a “market price” which, under the infallible economic laws of supply and demand, will automatically produce reductions in carbon dioxide emissions more efficiently than regulations and other big-government measures.

As the current $20-a-tonne federal carbon tax — about 4.4 cents per litre of gasoline at the pump — rises to $50 or $100 or even $200 in years to come, fossil fuel consumption will fall, an outcome allegedly guaranteed by economic theory.

None of this carbon tax dogma stands up well in the real world, as I will demonstrate shortly.

Nor should Canadians fall for the new-found carbon tax miracle revealed by the Parliamentary Budget Office and embraced by such carbon tax enthusiasts as Calgary’s Pembina Institute and Toronto’s Globe and Mail, which recently said that “more taxpayers will get back more in carbon tax rebates than they’ll pay in carbon tax.”

Sounds amazing: You pay a tax and the government gives you back more than you pay. Fantastic. Let’s have a bigger carbon tax! Imagine: If a $20 carbon tax produces a refund of $307, then a $200 carbon tax will mean an annual tax refund of more than $3,000.

This is known as the carbon-tax-and-dividend plan, advocated by coalitions of activists and corporations, including big U.S. oil firms and other businesses that recently agreed to give millions of dollars to promote the concept in the United States.

When big business conspires to raise taxes on all consumers, consumers and voters should start to think twice before joining the campaign. British Columbia once promised a carbon tax dividend on its carbon tax, but now keeps all the money.

In Canada, gasoline consumption has grown steadily over the past 40 years despite bouts of severe price increases that were equivalent to carbon taxes of up to $500 a tonne

Of all the myths surrounding a carbon tax, the greatest is the foundational claim that an increase in the price of fossil fuels will lead to major reductions in carbon emissions, thereby saving the world from the perils of climate change. Yale University’s William Nordhaus, a 2018 Nobel Prize winner, argues in The Climate Casino that a “sharp price rise” is needed to “choke off” growing carbon emissions.

Gasoline price history in North America suggests the choke-off theory is at least debatable and more likely unsupportable.

In the United States, the price of gasoline soared more than 60 per cent to US$3 a gallon during the 1970s and went through another price burst to almost $4 a gallon in the early part of the 21st century. Increases of that magnitude — up to $2 a gallon — are equivalent to imposing a carbon tax of $160 a tonne. But U.S. consumption of gasoline declined only slightly, and for other reasons (see graphic).

In Canada, gasoline consumption has grown steadily over the past 40 years despite bouts of severe price increases that were equivalent to carbon taxes of up to $500 a tonne (see graph).

The reason high prices/taxes don’t produce dramatic cuts in demand is well-known. Study after study has concluded that gasoline is dominated by what economists call “price inelasticity.” People do not change their behaviour in the face of rising prices when the product is essential to their economic success. There are some recent counter-studies, but it is clear that the market-price theory is still highly theoretical.

Numerous factors other than price are the real drivers of fossil fuel demand, including economic recessions, demographics, driver behaviour, vehicle fuel efficiencies, better roads, changing lifestyles, living standards and technological change.

Why do most economists tend to play down or even ignore price inelasticity? Nobel-winner Nordhaus argues for a global carbon tax but does not mention “elasticity” or “inelasticity” once in the 300-page text of The Climate Casino.

Price can have an impact, but nothing on the scale suggested by carbon tax theorists, who cite British Columbia as a demonstration case of the effectiveness of carbon taxes. Again, the evidence is murky at best, even murkier today as the price of gasoline in Vancouver hovers around $1.70 a litre, up from $1 in 2015. That’s equivalent to adding a $320 carbon tax. Gasoline consumption in B.C. has been declining, but the $30 carbon tax impact — equal to 8.9 cents at the pump today — is at best a marginal factor compared with the pile of other taxes and costs built into the price of gasoline (see graph).

Another folly: For Canada to impose a carbon tax independently is a form of economic suicide. If other trading partners — in North America, Europe, Asia, South America — do not adopt similar carbon taxation, the Canadian economy will become increasingly uncompetitive.

So far, no other country is joining the national carbon tax crusade. Australia just said no to one. Elsewhere, carbon tax schemes are either weak or marginal.

Even Nordhaus, the leading guru of carbon taxation, was categorical that a carbon price will succeed only if most major countries sign an international carbon tax treaty. Under such a treaty member nations would impose tariffs on the goods of non-members and use various “enforcement mechanisms” to promote compliance.

Now there’s a promising idea for a world already twisted into trade wars: Let’s bring in new tariffs to raise the costs of products — cars, steel, shoes, cellphones, fruits, vegetables, clothing, petroleum products — imported from non-carbon-tax countries.

An alternative trade proposal is to find a way to exempt certain Canadian industries from the carbon tax so they would remain internationally competitive.

Even Nordhaus, the leading guru of carbon taxation, was categorical that a carbon price will succeed only if most major countries sign an international carbon tax treaty

Which leads us to another delusion. A carbon tax is said to be a beautiful free market substitute for costly and inefficient regulation. Some economists used to say that carbon taxes were preferable because they left “no room for planners.”

On the contrary, carbon control and pricing have become a bureaucratic paradise for central planners and economic control freaks.

In Canada, governments still plan to regulate coal out of existence. Electric vehicle mandates and quotas will be issued; fuel consumption standards will be imposed on non-electric vehicles. Carbon sequestration will be required for major industries. Alternative energy forms must be subsidized. Industrial emission standards will be regulated into existence by state planners, although scores of exemptions will be needed.

The astute reader will by now perceive that the hard-core case for carbon pricing as a “market-based” regime that will let the “market mechanism” of the “carbon price” do the work has been thrown overboard.

Economists who favour carbon taxes now simultaneously advocate complementary “flex-regs,” to be administered by a wise politburo of central planners. Economist Mark Jaccard at Simon Fraser University, a longtime carbon tax backer, wrote last year that Ottawa should now also “heed the evidence on the effective and relatively efficient role that well-crafted regulations can play in driving the major technological and energy transition we so desperately need.”

Read the full article here


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Dave Fair
May 25, 2019 10:27 pm

I’m from the government and I’m here to help.

Gerry, England
Reply to  Dave Fair
May 26, 2019 6:56 am

Oh, No! That’s my life screwed up!

Dave Fair
Reply to  Gerry, England
May 26, 2019 8:16 am

All governments are corrupt; their money and power attracts (demands) corruption.

Reply to  Dave Fair
May 26, 2019 8:01 pm

All governments are corrupt. The only difference is how much power they have to use that corruption to destroy.

nw sage
Reply to  Dave Fair
May 26, 2019 7:52 pm

“Well Crafted Regulations” – now there is a self contradictory statement. Scares the he** out of me!

Gerard J O’Dowd
Reply to  nw sage
May 30, 2019 6:40 pm

Yes, just like Democratic Socialism is an oxymoron. What has ever been democratic about a nation with a centrally controlled economy? Please! Or the misnamed Peoples Republic of China (PRC). What choice of Representatives does one really have If they’re all from the same political party? Or how real is meaning of the word Peoples if one is a Uighur today sitting in a indoctrination camp or were among the dead killed by the Red Army while protesting to obtain a bit more Liberty at Tiananmen Square in 1989 or a target of shaming and mugging by Red Gangs carrying Mao’s little Red Book during the Cultural Revolution? Perhaps it should be renamed Some People’s Republic of China (SPRC).

Kurt in Switzerland
May 25, 2019 11:05 pm

The carbon tax argument is essentially the cap ‘n trade argument, repackaged.

None of these nincompoops realizes that a low lax rate fails to change behavior and a high tax rate generates societal unrest (absent viable, affordable alternatives to carbon-emitting technologies employed today).

So shelve the grand political schemes and fund research.

Reply to  Kurt in Switzerland
May 26, 2019 1:00 am

So if a thing costs you 10 and the alternative costs you 9 and is just as good, you don’t switch?

That’s truly hilarious.

Reply to  Phoenix44
May 26, 2019 3:43 am

“and the alternative costs you 9”
What alternative would that be?
Please only list PROVEN in actual use alternatives, not daydreams from the eco-nutters.


paul courtney
Reply to  jim
May 26, 2019 5:14 pm

jim et al: Phoenix is correct, what you are missing is this- if it costs 10 in Canada and 9 in USA…

Get it now? He is merely stating a fundamental rule of economics. A rule that Canada will soon learn the hard way. Canadians deserve better.

Drake Cherry
Reply to  paul courtney
May 26, 2019 5:44 pm

The price is around $3.20 in the U.S. and over $5.00 in Canada 10 to 6.40. What was your point?

paul courtney
Reply to  paul courtney
May 27, 2019 6:34 am

Drake: Sorry for slow reply. My point is made in every Econ 101 class not taught by leftist prof. If your business burns gas (which one doesn’t?), would you set up in US or Canada? If fewer businesses open in Canada, is that good or bad for Canadians? How can you miss the point?

Kurt in Switzerland
Reply to  Phoenix44
May 26, 2019 3:58 am


Examples, please. What “alternative costs me 9” and is “just as good as” the baseline?

The principle of a “Carbon Tax” (or “Cap & Trade”) is that by artificially inflating the price of fossil-fuel transportation, fossil fuel heating, fossil fuel whatever — consumers will purchas to the less costly alternatives.

Seems reasonable, even plausible, at first glance.

But it doesn’t hold up to closer scrutiny, for the reasons I mentioned: a tax low enough to not generate public unrest will not change human behavior; a tax high enough to change human behavior will generate public unrest. So the obvious question becomes, “Is there a sweet spot_” (which could change behavior somewhat without generating public unrest).

The “slight problem” is that the much-heralded “alternatives” are [apart from some exceptions] generally more expensive (not less) or non-existent.

Dave Fair
Reply to  Kurt in Switzerland
May 26, 2019 8:18 am

Wife, where did you put my Yellow Vest?

Rainer Bensch
Reply to  Phoenix44
May 26, 2019 6:31 am

Oh look, a watermelon herring.

Reply to  Phoenix44
May 26, 2019 1:55 pm

You guys never look for which gas stations have lower prices than the others, do you? Nah, I didn’t think so. You just pull in, grumble and fill ‘er up, not realizing until you’re five miles down the road and you see another station selling the SAME brand at $.04/gallon LESS that you could have saved a buck or two if you’d done a little research.

On another note, the governor of Illinois (Pritzker) has proposed raising the state tax on vehicle fuels from $.19 to $.38, twice as much as it was, and is NOT calling it a carbon tax. It’s a GAS TAX, and he knows it and says so.

Reply to  Sara
May 26, 2019 3:31 pm

How much does it cost to drive those extra miles? The actual cost of driving the car isn’t too bad, but there is the value of my time.

Reply to  Kurt in Switzerland
May 26, 2019 5:35 am

“So shelve the grand political schemes and fund research.”

Research IS being funded. Extravagantly.

Kurt in Switzerland
Reply to  Gamecock
May 26, 2019 10:59 am


You wrote, “Research IS being funded.”

Agreed. Now coordinate the research, setting reasonable targets for renewal (or pulling the plug) of said research.

Attempting to legislate human behavior (absent an obvious economic incentive) is silly. If the proposed technology is not capable of competing against the status quo, it will most likely fail.

Dave Fair
Reply to  Kurt in Switzerland
May 26, 2019 11:05 am

Given that the technologies of wind and solar are mature, there are no longer any reasons for their subsidies.

Modelturbation about the effects of a minor atmospheric gas is not sufficient to fundamentally alter our society, economy and energy systems.

Show me where I’m wrong.

Reply to  Kurt in Switzerland
May 27, 2019 1:45 am

A tax is different from cap-and-trade because the taxpayer can see where it goes and ask questions. Cap-and-trade meanwhile involves backroom deals and favouritism (such as Crown Prince Charles advocating for a nature reserve that is off limits to us commoners to be classified as a “carbon sink” when in fact he and his mum owned shares in said enterprise – through an offshore tax haven revealed in the Paradise Papers) On the subject of behaviour those of us who grew up during the 1970s observed it first hand as big blocks were replaced by small blocks, sixes and four-bangers: higher costs definitely influence behaviour.

May 25, 2019 11:10 pm

Many years ago the UK government decided to impose VAT (then 15%) on hot takeaway foods amid cries of outrage that it would mean the end of the fish and chip shop. VAT is now at 20% and not only are there plenty of chippies but they have been joined by a vast number of other fast food takeaways. There are also even higher taxes on alcohol and tobacco – people are still buying them.

Reply to  Susan
May 26, 2019 1:09 am

Entirely misses the point. All heated takeaway food is taxed at the same rate. Same with all wine and all fags.

A carbon tax is not meant to reduce consumption to zero but to ensure carbon usage is properly priced.

Reply to  Phoenix44
May 26, 2019 5:29 am


nw sage
Reply to  Gamecock
May 26, 2019 8:00 pm

‘Properly’ priced presumes a valid use a buyer may be willing to pay for. I haven’t yet heard of a use of value to the buyer of such a tax. Thus the tax is improperly priced unless it is zero. It is also impossible, under the Law of Supply and Demand, to ‘properly price’ something without some sort of competition. A Government mandated amount is monopolistic, not competitive.

Dave Fair
Reply to  Phoenix44
May 26, 2019 8:25 am

“Sin Taxes” are seen by the politicians as relatively uncontroversial ways to raise money, while they hurt the little guy mainly.

Reply to  Phoenix44
May 26, 2019 8:39 am

Since more CO2 in the atmosphere is a good thing, it should be subsidized, not taxed.

Reply to  Phoenix44
May 26, 2019 9:52 am

Phoenix44, you are correct that consumption should be properly priced. Governments are incapable of proper pricing, however. They only can work to keep markets open so that proper pricing occurs naturally. Governments can’t do it because they are subject to political forces before market ones. Political forces ride on emotion, not economic reality.

Reply to  Gary
May 26, 2019 3:03 pm

“Political forces ride on emotion, not economic reality.”
I’d say they run far more on greed for money, power and control by the politicians and their pals who all enrich themselves on the emotional forces that, it just happens, they also create. You are correct, none of it rides on economic nor any other reality including science.

Paul Penrose
Reply to  Phoenix44
May 26, 2019 10:45 am

The “proper” price for anything is the intersection of two things:
1) The perceived value by potential buyers
2) The supply of the thing

The idea that there are some “learned” people out there they “know” better than the buyer and sellers what the price should be is an absurd proposition. Distorting the market by using taxes and subsidies in an attempt to control prices and/or usage is a stupid idea. It’s like squeezing jello; it always squirts out somewhere you don’t expect and makes a mess.

Dave Fair
Reply to  Paul Penrose
May 26, 2019 10:57 am


The problem with socialism in a nutshell.

May 26, 2019 12:10 am

Before one starts to tax something, lets have a reason for them, the
government , to do so. Where is the evidence for Carbon, i.e. the black stuff, causing any harm ? But wait ,we are talking about a gas, invisible, no smell,
no taste, so what is the problem ?

So before yet just another excuse for getting more of the publics money
from them, lets see the evidence for it. Prove that CO2 causes any harm.

As old Sgt. Friday used to say way back, “” Give me the facts Madam””.


R Shearer
Reply to  Michael
May 26, 2019 5:35 am

One will find that not only is the primary product worth every penny, the secondary byproduct increases agricultural productivity and possibly moderates risks of natural calamities, such as weather altering volcanic eruptions.

Global Cooling
May 26, 2019 12:15 am

Just waiting for the taxation of electric cars. They have already started to discuss about it. Governments will never release so much money back to the tax payers. They are tax addicts.

High level of taxes and fees and complicated rules are essential to ruling class who can then sell their services to the tax-payers. Problem with tariffs, lets say carbon tariff for Chinese products, is the difficulty of getting to the money flow from China to Western ruling class.

Reply to  Global Cooling
May 26, 2019 3:05 pm

“Political forces ride on emotion, not economic reality.”
I’d say they run far more on greed for money, power and control by the politicians and their pals who all enrich themselves on the emotional forces that, it just happens, they also create. You are correct, none of it rides on economic nor any other reality including science.

Reply to  Global Cooling
May 26, 2019 3:18 pm

If the politicians get their wish and most or all vehicles are electric, I have long wondered how they plan to pay for the roads which, in the US anyway, are paid for via the gas tax? In addition, I wonder how much of the electricity the electric cars use is going to come from wind and solar? What is the point of a tax to just change the point of “pollution” from the tailpipe to the power plants?
Not that windmills and solar are not huge carbon consumers when factoring the mining for the materials, building them, transporting them, planting them and then, after 10 to 15 years, removing them and, probably, shipping them via diesel powered ships to the third world where they will pollute the groundwater and air with the toxic elements used to make them as they do in China in the mining for the elements they need to make them.
Europe, at least by law, makes the owners of the “renewables” responsible for their removal. In the US, the law does not. I suspect that after subsidizing them for their entire lives, the taxpayer will then get stuck with the clean up bill, assuming they ever get taken out. There’s many useless windmills and solar panels just sitting there, not working and being blights on the land.
Not to mention that they can’t be operated without FF backup which emits more CO2, at least for natural gas in powering up and down than if they just ran 24/7.

Coeur de Lion
May 26, 2019 12:49 am

Why don’t we tax everything? World-wide? And spend the proceeds on shore-side villas for the apparatchiki. Oh, sorry, I’m being silly.

Donald A. Neill, Ph.D.
May 26, 2019 1:45 am

I made this precise point to academic colleagues eight years ago:

Add to it the fact that imposing ‘carbon taxes’ amounts to nothing more than hair-shirt environmentalism when (a) carbon dioxide is a vital atmospheric trace gas which is at historically low concentration levels; (b) there remains, after more than 30 years of climate panic and alarmism, and untold billions of (usually taxpayer) dollars spent on research, no empirical evidence whatsoever for the key contention of the AGW hypothesis, which is that anthropogenic GHG emissions, principally of CO2, are the main driver of global temperature increase – but plenty of evidence that atmospheric CO2 concentration responds to, rather than is driven by, increases in temperature (in fact, to the integral of temperature, as Murray Salby has demonstrated); (c) the anthropogenic contribution to atmospheric CO2 concentration, which is supposedly the magical rheostat that governments may use to adjust global temperature, cannot even be detected by available instruments; and (d) even if none of this were true and all of the fantasies and nonsensical arguments of the alarmists were correct, kneecapping the Canadian economy while the rest of the world blithely continues driving cars, building fossil-fuel-fired power plants, and making cement for construction purposes, is an act of economic suicide.

But no one listens, because to question the climate orthodoxy is heresy, while to open one’s wallet and purchase one’s indulgences at the government’s demand is part of the holy catechism and auto-da-fe of modern progressive life – and the know-nothing Torquemadas stand ever ready to burn dissenters at the stake.

May 26, 2019 2:52 am

Finally – someone who understands what demand inelasticity is!

Dave Fair
Reply to  richardw
May 26, 2019 8:35 am

And the little guy pays, even in socialist utopia. The French Yellow Vest movement scares the hell out of our ruling classes because it shows that the common man can see the manipulations, and has alternatives for countering the corruption.

Its too bad that the Yellow Vests have apparently been taken over by socialists. Alas, that seems to be the fate of all mass movements; the power hungry hanger-ons take over.

Reply to  richardw
May 26, 2019 8:41 am

Just because something in inelastic in the short run does not prove that it is inelastic over the long run.

May 26, 2019 3:05 am

Corcoran is being deliberately obtuse. His argument ends up being that governments won’t stop at as carbon tax. True, but they won’t stop at other alternatives either. At least with a carbon tax they might stop and they might keep other regulation to a minimum.

As for the economics, we consume less of things when their price goes up. Nothing is price inelastic where there are alternatives. To claim otherwise is to ignore reality, to deny the laws of supply and demand. The whole point of a carbon tax is to let the market come up with cheaper acceptable alternatives by pricing carbon correctly. And even where there are no alternatives, we are not highly price inelastic for energy. It just takes time: when the car needs replacing we buy a smaller or more fuel-efficient one. Same with businesses – see airlines with the Airbus Neo. Which is exactly what Nordhaus, Stern and others say about a carbon tax. You don’t scrap the coal plants until they reach the end of their life. Then you replace them with the cheapest form of production , including full costs for each possibility.

That way future emissions fall at the lowest possible cost.

It is naive to think governments are not going to act on climate change. They are, no matter what, for at least the next decade. A carbon tax is the best, most effective, cheapest and least intrusive way they can do so. Refusing this method just results in centrally-planned, ineffecient, expensive state solutions. And making fallacious and incoherent arguments against externality taxes helps nobody.

Reply to  Phoenix44
May 26, 2019 4:06 am

Whilst your logic is sound the flaw lies in the simple fact that fossil fuels are the most economic way of producing energy; so there are currently no alternatives.
Generating revenue to be invested in finding alternatives may sound attractive; but sadly thermodynamic laws prevail and much of the investment will be lost in wild goose chases.
The result? A considerable downturn in economic activity.

The only partial potential here lies in Nuclear energy; but idiot group thinking currently precludes that.

The real solution is to increase CO2 emissions for the benefit of the world as a whole.; but this, of course, puts the whole question of a carbon tax in the trash can .

Reply to  Phoenix44
May 26, 2019 7:33 am

Your “pricing carbon correctly” is just a euphemism for handicapping a high quality asset to give a low quality asset a competitive advantage. Renewables can’t compete with hydrocarbon-based energy on a level playing field, because the former can’t operate independently of the latter, whereas the latter has no such constraint. So the stronger must be handicapped to give the weaker a chance. And the end result is that everyone loses.

Reply to  Phoenix44
May 26, 2019 8:14 am

“And making fallacious and incoherent arguments against externality taxes helps nobody.”

Renewables have numerous externalities that are not being taxed, but rather subsidized. So this line of reasoning is quite fallacious.

Dave Fair
Reply to  icisil
May 26, 2019 10:36 am

What about the positive externalities of fossil fuels?

Dave Fair
Reply to  Phoenix44
May 26, 2019 8:51 am

Phoenix44, your thinking can be summarized by: “Governments should lower peoples’ standard of living to fight a wildly speculative, non-existent problem.” A supposed problem that the Western World has no ability to affect, even under the most Pollyanna-ish of green socialist assumptions about the notorious CO2 molecule.

And your “At least with a carbon tax they might stop and they might keep other regulation to a minimum.” reflects your misunderstanding of political operations. That is, unless you are a political operative. Are you one? What is your name?

Anyway, go force China, India, Africa, etc. to enact your funny taxes on their peoples.

May 26, 2019 4:08 am

Any climate activist who drives faster than the posted highway speed — thus wasting fuel — is a rank hypocrite.

May 26, 2019 4:14 am

People have to drive to survive. That makes demand for gasoline somewhat inelastic. On the other hand, when gasoline was expensive and we were worried about the arabs turning off the taps, people started driving smaller cars. Now that gasoline is relatively cheap and plentiful, folks are driving bloody huge trucks.

My guess is that, if they make gasoline expensive enough, folks will start driving smaller vehicles. One of my friends delivers prescriptions. She doesn’t need a big vehicle and her Toyota Prius saves her a bundle of cash. In my case, the extra cost of a hybrid would not ever pay itself back. People won’t dump their trucks immediately but they will do a similar calculation when it comes time to replace them.

Bill Powers
Reply to  commieBob
May 26, 2019 7:04 am

Your plumber, electrician, carpenter, handyman, HVAC, roofers, landscapers… need bloody huge trucks and they need to drive their equipment from your house to their next job.
Your growers, ranchers and producers need huge trucks to move their goods to your market as do the drug manufacturers to get your friends prescription drugs to the local pharmacy.
Amazon needs a trucking industry and bloody huge vehicles to get your Insta-pot and other impulse purchases to your front door.
Your world view seems to be limited to your neighborhood Bob. You really need to expand it.

Reply to  Bill Powers
May 26, 2019 8:44 am

What percentage of the population are these handymen?
Bob’s was pointing out that over time, people’s habits do change because of price pressures.
No need for the snarky response.

John F. Hultquist
Reply to  MarkW
May 26, 2019 10:15 am

I agree with you Mark, but wonder what “over time” might mean in terms of saving the atmosphere from heating past that 1.5K increase?
And another thing: Many years ago autos got about 15 mpg and now they get 30 mpg. Helpful? Yes. Except now there are more people and more cars.
Saving the planet? No.

To be clear — I don’t think CO2 is a big problem.

Dave Fair
Reply to  MarkW
May 26, 2019 10:51 am

Mark, I don’t think we need your “price pressures” which are solely based on politicians’ fear of CAGW. [More accurately, politicians’ fear of non-election and consequential loss of money-making opportunities.]

Paying more now to avoid speculative future costs is economic stupidity. Since those in the future will be richer and have better technology, why not let them decide what to do?

Invalid UN IPCC climate models and wildly inaccurate econometric models seem to be poor reasons for deciding to fundamentally alter our society, economy and energy systems. Am I wrong?

Reply to  Dave Fair
May 26, 2019 8:05 pm

If you took my response as a defense of carbon taxes, then you don’t know me very well.
I was just defending a point of economics.

John F. Hultquist
Reply to  Bill Powers
May 26, 2019 10:07 am
Reply to  commieBob
May 26, 2019 7:08 am

Yes, commiebob, now that gasoline is relatively cheap, people can afford to buy safer vehicles for their families and themselves, like bloody huge trucks.

I live in the metro Atlanta area. There are rolling ‘walls’ of bumper-to-bumper semi-trailer trucks to maneuver around on I-285, 24×7. If you think we are going to do battle with them in a Smart Car, then you really do have the intelligence of a commie.

Reply to  jtom
May 26, 2019 3:07 pm

I don’t drive a Smart. I’m just making an observation between the 1970s and now. It used to be that you could tow a house trailer with the family car. Then, between pollution regulations and peoples’ appetite for smaller cars, things changed. Now things have changed back.

I also fondly remember the Dodge Little Red Truck. It still developed some serious horsepower because it wasn’t saddled with the same pollution regulations as cars.

Dave Fair
Reply to  commieBob
May 26, 2019 10:25 am

“… if they make gasoline expensive enough …” people will revolt: Wife, where did you put my yellow vest?

Our government masters (in most of the U.S., at least) constantly push screwy ideas until the people revolt at the ballot box. Our 2020 elections will be instructive.

May 26, 2019 4:48 am

British Columbia once promised a carbon tax dividend on its carbon tax, but now keeps all the money.

From a point of healthy cynicism and life experience I’ve commented before here on WUWT, along with several others here, that the carbon tax dividends or rebates will disappear and in short order, all the tax will be kept by the government. If you’re going to give the money back, why the tax in the first place? Just let the consumer keep the money.

I never bothered to search for where that has happened, so it was good to see an example of where it has happened. I don’t suppose the economists figured bog standard government tax-and-keep behavior into their calculations.

BTW, I’m sure it possibly may, might, maybe just once have happened, but does anyone know of an example of a temporary tax that was ever rescinded once its purpose was served? I’m drawing a blank, myself.

Gilbert K. Arnold
Reply to  H.R.
May 26, 2019 6:09 am

I don’t know about national taxes. But here in the state of Arkansas, in the City of Fayetteville, a new library was needed. The traditional sources of funding were not responding. So… the proponents of the new library proposed to the city fathers that they enact a 1/2% city sales over and above the current sales tax to last for a period of 2 yrs. the city fathers put it up for a vote by the public and it passed. Two years later with over $20 million in revenue from the sales tax, ground was broken for the new library. The sales tax disappeared as was promised. The City of Fayetteville, AR now has a beautiful award winning new library. So yes, sometimes temporary taxes are rescinded when their purpose has been achieved.

Reply to  Gilbert K. Arnold
May 26, 2019 6:38 am

OK. That makes…. one. I am not figuring on a long list.

Gilbert K. Arnold
Reply to  H.R.
May 26, 2019 9:17 am

Neither am I.

Greg Cavanagh
Reply to  H.R.
May 26, 2019 4:49 pm

Our local Council did a similar thing, adding a levee charge to our yearly rates in order to pay for the land for a new botanical garden . That was about 5 or 6 years ago now, and the levee remains. In fact the idea worked so well, they’ve added an Environment levee, and other levees as well. Our annual rates would be cut almost in half if they cut all the levees out.

Reply to  Gilbert K. Arnold
May 26, 2019 8:46 am

In that case, to extend the sales tax, they would have to go back to the voters. The option to extend on their own was not present.

Reply to  H.R.
May 26, 2019 6:38 am

In Canada, income tax was supposed to be a temporary wartime measure. link

Reply to  commieBob
May 26, 2019 8:00 am

In the U.S. it was sold as a targeted tax for the moguls and the sales tax in states was in response to the Great Depression that ended generations ago.

Reply to  H.R.
May 26, 2019 6:46 am

A 3% federal exise tax was placed on telephone service in 1898, to help finance the Spanish-American War. The tax was ended in 2006.

Not exactly something the government can brag about.

Reply to  jtom
May 26, 2019 8:08 am

I posted on this but got the end year wrong. Glad it wound up in the bit bucket.

108 years is temporary when it comes to taxes though.

Reply to  H.R.
May 26, 2019 7:40 am

The tax on telecommunications that was enacted to pay for the Spanish-American war was finally repealed in 1996. It almost lasted a century past the event it was to pay for. (Of course, it was promptly replaced with a different higher tax to pay for “connecting rural schools to the internet”. [wink-wink, nudge-nudge])

Reply to  OweninGA
May 26, 2019 9:24 am

So much for the bit bucket. 2006 was the repeal. The rural schools internet thing was in the 90’s so they replaced the tax before they repealed it.

Dave Fair
Reply to  H.R.
May 26, 2019 9:05 am

My State, Nevada, has a constitutional prohibition on creating or raising taxes, except by vote of two thirds of the Legislators. A super-majority in a past Legislature instituted a new tax to apply to a specific problem, with a Sunset Clause (expires on a set date).

Now that the Sunset date has come, the new majority of socialists Legislators (not two thirds, thank God) have said they will not allow it to expire as required under current tax law. Instead, they will vote to extend the tax indefinitely. Their reasoning? It is not a new or increased tax. Their paid State lawyer apparently thinks that is great State Constitutional reasoning.

Reply to  H.R.
May 26, 2019 10:02 am

The top prize for making a temporary purpose-specific tax into a permanent one must go to the Sydney Harbour Bridge in Australia.
Opened in 1932, with a penny a trip toll imposed until the bridge was paid for (achieved in the 1960s iirc), the toll has continued to this day, but now at a rate of $4 a trip.
There have probably been ~ 15 different governments of all persuasions in power since the SHB was paid for, but NONE have seen fit to remove the toll.
What a surprise!!!!

Kent Beuchert
May 26, 2019 5:27 am

These schemes are indirect and make silly assumptions – like a good alternative will appear just because of pricing. Canada is, at least, spending money to encourage and approve designs of small molten salt nuclear reactors. If the global warming alarmists had any sense, they would be pushing this revolutionary energy technology like crazy. Unfortunately, they are just plain crazy

Tom Abbott
May 26, 2019 5:32 am

From the article: “Nor should Canadians fall for the new-found carbon tax miracle revealed by the Parliamentary Budget Office and embraced by such carbon tax enthusiasts as Calgary’s Pembina Institute and Toronto’s Globe and Mail, which recently said that “more taxpayers will get back more in carbon tax rebates than they’ll pay in carbon tax.”

Sounds amazing: You pay a tax and the government gives you back more than you pay. Fantastic. Let’s have a bigger carbon tax! Imagine: If a $20 carbon tax produces a refund of $307, then a $200 carbon tax will mean an annual tax refund of more than $3,000.

This is known as the carbon-tax-and-dividend plan, advocated by coalitions of activists and corporations, including big U.S. oil firms and other businesses that recently agreed to give millions of dollars to promote the concept in the United States.”

What they don’t tell you is a Carbon Dioxide tax would raise prices across the board in the economy, not just gasoline prices, and although taxpayers might be reimbursed for the gasoline tax, they would not be reimbursed for the higher prices they have to pay for everything else they buy.

And as one other poster mentioned, there is no guarantee that the government will reimburse taxpayers for the Carbon Dioxide tax, either. The politicians may decide they need that money elsewhere (likely).

If you want to harm your economy then raise gasoline prices. It’s the worst kind of tax, which causes all prices in the economy to rise and hits the poorest people the hardest. Don’t tax our lifeblood. Find some other way.

May 26, 2019 5:51 am

“folks are driving bloody huge trucks”
So what? They had a ‘choice’ and freely chose a truck.
In the winter some people choose to fly to a bloody warmer destination for a break from the cold.
Isn’t that a waste of fuel and totally unnecessary?
When or where should our selective concern trolling and finger wagging start or stop?

R Taylor
May 26, 2019 6:07 am

Reduce emissions? Silly people. Carbon di-taxable is the Holy Grail for those who live by taxing others.

May 26, 2019 6:58 am

If fuel consumption is to be reduced, the only fair solution is rationing, as in WWII. Taxes hurt the poor most, and ordinary people, very little.

Reply to  DHR
May 26, 2019 8:50 am

How is rationing fair? There are people who need to use lots of gas. The handymen driving trucks is an example given earlier.
There are also people who live in rural areas where they have to drive longer distances to get anywhere. How is fair to compare them to urban dwellers, many of whom don’t even own cars?
Or a family with 4 kids to a single college student.

Archibald Tuttle
May 26, 2019 6:59 am

The economic theory can be right while the government control freak theory can be wrong. The concepts are not mutally exclusive. Fuels have displayed a consumption inelasticity to price but of course there are complex utility decisions underneath these simplistic graphs. Taken on its face, the explosion of Vehicle Miles Traveled (VMT) while government imposed mileage standards, reveals that travel is indeed not inelastic. This may have helped catalyze or was a partial contributor to the sprawl that the people imposing these mileage standards claimed to hate.

As the construct has matured, the mileage standards have become a rock in the river as people choose SUVs over sedans. I think no small part of that is enabled by more secure domestic supply. So there are other factors besides price that drive these decisions although price matters. There are broad if not equal numbers who bought hybrids as the perception was that gas prices were headed above those tested in the graphs above, including Pat Michaels. (sadly the Washington Times archives appear to have flown the coop so i cannot link his 2001 editorial about why he bought a Honda Insight including his prediction that these cars wouldn’t be profitable that was followed three months later by an announcement they were from Toyota. I think that probably depends on the accounting so it may have been as much corporate game face as game over for Michaels’ prediction, but there is more here than meets the eye, as there is with gasoline consumption graphs).

Perceptually higher gasoline cost environments definitely drive some people to higher mileage vehicles. This may or may not reduce their consumption but that suggests the consumption itself is not at all inelastic, Some of this also shifts consumption from those going little to those going big – so the overall price response appears insensitive but it is more structurally complex. And simply going carless milennial is not itself any precise harbinger even on gasoline consumption as it is Uber way more than massive stranded investments in transit that has enabled this culture to blossom.

In any event, since policymakers can’t agree whether carbon is any kind of danger or whether pricing it higher will actually curtail consumption I’m coming around to the US Chamber view that a significant gas tax increase targeted at road infrastructure which there is general agreement we need. This means the other two questions don’t need to be answered definitively. Rather than argue pennies on elasticity pushing for the smallest possible program, I’d push back against bureaucrats and labor bosses to make sure that the money is spent most efficiently. And I don’t just want to fix what we’ve got, there are strategic expansions to the road system that should be made. The P3 ideals hold some promise but also simply create another lobby out to capture government transportation policy and I find the idea of paying for it with tolls instrusive and not so perfectly efficient as claimed now that toll booths themselves are a thing of the past.

May 26, 2019 7:24 am

Who knew that Asian money laundering in BC real estate would contribute to such green gentrification and social engineering.

Al Miller
May 26, 2019 8:11 am

On the simplest level a carbon tax will first hugely alienate rural citizens who literally have no options, meanwhile urban dwellers who do have options and the freedom to participate in the cult of climate will ignore reality and continue to think groceries come from a grocery store. The unrest and social divide will be palpable. Evidence you ask- well France just tried and found out how far people can be abused. I live in BC where the revenue neutral carbon tax was introduced without much resistance, but now is a general revenue cash cow ( gosh, who could have seen that coming?).

On the outer Barcoo
May 26, 2019 9:09 am

Canadians are such wonderful people, willing to demand an even colder climate in order that the rest of humanity might endure. Such selfless magnanimity should be celebrated and we can only hope and trust that they will gladly shoulder an even heavier tax burden for our sakes.

May 26, 2019 11:14 am

The real reason that the ‘Carbon’ Tax is bad is that CO@ has almost nothing to do with Climate change at its present levels. The ‘Carbon’ Tax is just a tax by various governments taking advantage of weak minded citizens.

May 27, 2019 3:55 am

Fantastic…Thumps up to the author.

May 30, 2019 7:25 pm

The carbon tax is just one more tax to allow governments to rip off tax payers .
In volatile energy markets a carbon tax is just noise unless it’s so high it kills the economy .
In British Columbia when liberals shoved a carbon tax on people the commodity price of natural gas was approx $10 per GJ , ten years later because of shale gas the carbon tax cost is higher than the commodity cost of natural gas.
So to follow the logic of the big hats consumption should be going through the roof because the overall cost is less than half what it was 10 years ago and it isn’t . It’s barely moved and is doing so as higher efficiency furnaces worked there way through the equipment life cycle .
A carbon tax is a con game and the public know it .
Lets see how well the Liberals do 6 months from now after SNC cover up , 10’s of $billions in Chinese laundered money being ignored by Liberal governments and massive deficits. The apology tour is about to end . The Liberals are a Political Emergency about to get fixed .

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