Carbon pricing seems obvious to economists, but for many voters it just doesn't click: Don Pittis

If you want to stop climate change and most Canadians say they do economists insist they know the most efficient way of making it happen.

But as provincial opposition parties in two of Canada's biggestprovinces seekto eject sitting governments, both will be running on a policy that says no to carbon taxes.

"A tax is a tax is a tax," said Ford, whose brother Robserved a controversial term as the populist mayor of Toronto.

If Ford wins in Ontario, he'llface a federal government that is betting on carbon pricesto help reduce emissions and tackle climate change.

Conservative opposition

Ford's position is by no meansan outlier in hisparty. While former Ontario PC leader Patrick Brown had a carbon tax in his platform, after Brown was pushed out over allegations of impropriety all of thecandidates running to replace him opposed the tax.

Ontario is not alone. The leader of the United Conservative Party in Alberta, JasonKenney who wants to oust Rachel Notley's NDPgovernment in the next election is taking a strong line against carbon taxes.

And yet according to the vast majority ofmarket economists, there is no more business-friendly, efficientway to save the world from thedire effectsof climate change than to put a price on carbon.

"[There's] lots of evidence and lots of economic logic that says people do respond to prices, but the instinctive mainstreamview is that this isn't going to do anything," says Chris Ragan, who chairs Canada's Ecofiscal Commission, aprivately funded group that advocates market-friendly solutions to climate change.

• Federal government refusing 'no' for an answer on carbon pricing in Sask.
• Provinces have until the end of 2018 to submit carbon price plans

"That's a really important disconnect and if you do believe that it doesn't change behaviour then it really is just a tax grab and conservatives don't like tax grabs, for good reason," says Ragan, a pro-market professor of economics at Montreal's McGill University and a well-known author. "I don't like tax grabs."

Ragan and others at the EcofiscalCommission are currently working on an educational campaign expected early in April to try andconvince people that carbon pricing and carbon taxes work.

But research by economist Brady Yauch, executive director of the Consumer Policy Institute, showsthat even when carbon is not involved, manypeople either don't grasp, or don't believe in, the use of pricing to change behaviour, even when it saves them money.

During Toronto's most recent municipal elections, Yauchproposed a scheme designed tosave Torontonians billions of dollars while improving many lives.

The plan involved the city's crowded subway system, which is so full during peak morning rush hour that riders oftenwait for several trains to go by before they can squeeze aboard.

The city's long-term solution is to build something called the downtown relief line, but the heftyprice tag means city politicians have been reluctant to commit.

No to peak pricing

Yauch'salternative plan? To make the subway free before 7:30 a.m. Proven elsewhere, notablySingapore, the system is known in economics as congestion or peak pricing.

The lower non-rush hour cost encourages travellers who can do so to go early, reducing the load atpeak times when the service is full price. According to Yauch's calculationsthe savings would cover the costof the free fares, but the plan never caught on.

Similar schemes to end crowding on highways or to cut demand for electricity at peak times have not been popular, even though economists can clearly show the benefit.

When I wrote about a plan to increase electricity costs during times of peak load, a reader pointed out that those higher costs cameat a time she needed electricity to do things like get the kids ready for school.

To economists it's clear that while there are people like her who mustuse power atpeak times,others who can adjust their schedules willdo so, reducing the need for expensive peak power plants and cutting costs for everyone.

JaccardisaSimon Fraser Universityeconomistwhohelped B.C.premier Gordon Campbell develop that province's2008 carbon tax policy. He says carbon taxes were politically unpopulareven though the province returned every penny to voters.

"Almost everyone benefited from the carbon tax in B.C. and almost everyone believed they did not benefit," he says.

While they are economically efficient Jaccardsays carbon taxesare not politically efficient.He quotes the book The Myth of the Rational Voterwhichsays that unlike economists, voters don't like fixing problems with tax policy.

And when it comes to effectiveness, Jaccard saysthe impact offlexible regulationsincluding rulesdesigned to replacecoal fired power plants orcut auto emissions have dwarfed thoseof carbon taxes. Part of the reason is that while economists canshow carbon taxes have worked, it has been politically impossible to repeatedly raise them so that they are effective.

"Yes, we should tryto make these things as economically efficient as possible, but that's just one objective," says Jaccard,who fears Canada will notreach targets it agreed to in Paris. "Thepursuit of pure economic efficiency by economists has been part of thereason we have failed on climate policy."

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