This is how it works.
A petroleum industry marketing organization releases a story about how much the carbon tax is costing municipalities in Alberta. It points out that the carbon tax has cost those municipalities $37 million.
To the average person, $37 million is an incredible amount. To reinforce this point, the writer suggests that eliminating the carbon tax would create nearly 8,000 student jobs in Alberta, though it’s not clear what all these students would do.
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They must be jobs for high school students because this estimate is based on Alberta’s $15 per hour minimum wage. Most university students look for a better wage to help pay tuition, student loans and housing.
Another story that will undoubtedly have far less coverage in Alberta is the recent complaint by the Rural Municipalities Association that tax breaks given by the Alberta government to the oil and gas industry are costing municipalities $332 million in lost revenue. The RMA has launched the “Below The Drill” campaign to raise awareness of what is essentially an oil and gas industry subsidy that is hurting rural Albertans.
The purpose of carbon pricing is to tax the use of fossil fuels because there is a public cost to climate change, including adaptation and recovery from disasters like the wildfire that devastated Jasper last summer. It also creates an incentive for municipalities to reduce their carbon tax bills by investing in cost-saving initiatives like solar panels on municipal buildings.
Consider a carbon tax as a small license fee for using fossil fuels to heat your home and power your vehicles. Industry, municipalities and households all pay it, which can be substantial for heavy users of climate-warming fossil fuels. The federal consumer carbon tax gets returned to Canadian households as a carbon rebate, offsetting the costs for average Canadians.
But the fossil fuel industry, the Alberta government and federal Conservative leader Pierre Poilievre would like Canadians to hate the carbon tax and together they’ve generated significant political momentum to mould public opinion toward the belief that carbon pricing is a crippling burden to Canadians.
In reality, carbon pricing hasn’t been the slightest bit crippling to the oil and gas industry. It has reaped record profits in recent years, even as carbon pricing has increased around the world. Yet they work to eliminate the threat.
The Canadian Climate Institute provides an excellent summary of how industrial carbon pricing works. Even Alberta has such a policy, which essentially requires large industrial emitters to pay the carbon price if their emissions are above a certain threshold. Companies with emissions below the threshold collect carbon payments.
If the carbon tax is significantly driving up costs for a company with high levels of carbon pollution, they can pass these additional costs to consumers by raising the price of their product. Essentially, the cost of pollution is paid by consumers, businesses or governments. There are no complaints about this less noticeable carbon pricing scheme.
Industrial carbon pricing is still below the radar for most people, but it could be weaponized by opportunistic politicians once the consumer carbon tax is dead. In this way, it is fairly easy for the fossil fuel industry and its devoted followers to crush any attempt to make polluters pay the cost for overheating our planet.
Robert Miller is a retired systems engineer, formerly with General Dynamics Canada, who volunteers with the Calgary Climate Hub and writes on behalf of Eco-Elders for Climate Action. He lives in Calgary.
