Tuesday, October 07, 2008

Putting a Price on Carbon the Best Approach : Economists

Good news for us Green Shift supporters as the plan to put a price on carbon, and reduce tax on income, has received support from a broad range of Canadian economists.
More than 230 academic economists have signed an open letter to the leaders of the federal political parties, urging them to acknowledge that putting a price on carbon is "the best approach" to combatting climate change.


Pricing carbon allows every business and family to decide for itself how it values the things that generate carbon, the letter says. Each can consider the options and everyone has the incentive to change, but does it in a way that's best for them.
[H/T, Far and Wide]

The full letter and list of signatories can be found at Econ-Environment.ca as well as the list of principles behind the letter.

  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.

So now it's 230 economists versus one and his crony.

The Liberal Green Shift is the right solution for Canada to fight greenhouse gas emissions - it being both economically and environmentally viable.

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