Carbon taxation in a fossil fuel-dependent economy: The case of Canada

Crawford School of Public Policy | Centre for Climate Economics and Policy

Event details

Seminar

Date & time

Tuesday 11 December 2018
12.30pm–1.30pm

Venue

Weston Theatre, Level 1, JG Crawford Building 132, Lennox Crossing, ANU

Speaker

Prof Kathryn Harrison, University of British Columbia

Contacts

Frank Jotzo

It is a truism that carbon taxes are good policy but bad politics, as Australians know all too well. Yet despite the political challenge, some governments still adopt carbon taxes and most of those survive. The motivation for my current project is to understand the political conditions for adoption and survival of carbon taxes.

The case of Canada is particularly noteworthy given its heavy economic dependence on fossil fuels. Following the province of British Columbia’s successful carbon tax, the Liberal Party proposed a national carbon tax in the 2008 election. That proposal was soundly rejected by voters, leading many to describe carbon taxation as the new ‘third rail’ of Canadian politics. Yet a decade later, a Liberal government has announced that it will impose a carbon tax, rising to $50/tonne in 2022, in four provinces that account for half of Canada’s population. All other provinces have either adopted or committed to implementing an equivalent carbon price by 2019.

This presentation will discuss three conditions that made possible such an abrupt policy change. Canada’s federal system facilitated adoption of different forms of carbon pricing by four of ten provinces, thus laying a foundation and narrowing the gap for national implementation. Still, imposition of a federal tax in other provinces required a combination of political leadership and hubris from the Trudeau government. Finally, and potentially most important, Canada’s embrace of carbon taxation is predicated on a grand bargain - climate leadership in exchange for expanded fossil fuel production and exports - which could easily erase the gains of a national carbon tax.

Kathryn Harrison is a Professor of Political Science at the University of British Columbia. She has served as served Senior Associate Dean and Acting Dean in the UBC Faculty of Arts. She has degrees in Chemical Engineering and Political Science from Western University, MIT, and UBC. Before entering academia, Harrison worked as a chemical engineer in the oil industry, and as a policy analyst for both Environment Canada and the United States Congress. She is the author or editor of several volumes, including Global Commons, Domestic Decisions: The Comparative Politics of Climate Change, and has published widely on Canadian and US climate and environmental policy. She is a frequent media commentator on climate policy.

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