Documents obtained from the Canadian government in accordance with open information laws indicate that there is some administrative support for a global carbon pricing scheme to reduce the effects of human-caused climate change. The goal, according to Environment Canada, is to reduce emissions to seventeen percent below 2005 levels by the year 2020. The notes, which were prepared for the 2011 G20 summit, support the idea of “putting a price on carbon for developed countries.” This comes in direct contrast to the public statements of Prime Minister Stephen Harper, who has previously criticized the idea of the carbon tax.
Even if you buy into the fiction of human caused climate change, such efforts must be seen as little more than underwhelming. The dire predictions with which we are continually bombarded indicate that so paltry a reduction in emissions by a single country can have little to no meaningful impact while China and Russia continue to expand their energy production in a selfish attempt to increase living standards for their citizens.
What environmental activists either fail to understand or – as seems more likely – understand all too well, is that what these misguided regulations actually accomplish is nothing more than a reduction of wealth and productive capacity for nations already struggling to come to grips with persistently weak economic growth and mounting, inescapable debt. It is certainly true that when you tax something, you get less of it, so it is understandable that those who desire less carbon in the atmosphere would turn to a tax as a potential solution. However, this analysis does not go far enough, in that it ignores the substitution effect.
People do not burn carbon simply for the fun of it. They do so because it is the most efficient, least expensive means of producing energy. A tax on this method of production will have one of two effects – or, more likely, a combination of both. First, we will see less energy production overall. Less energy means less production, fewer services, less reliability, more power outages and a general worsening of daily life for those of us who depend on electricity to do our jobs, communicate with loved ones and otherwise live our lives. The second effect is that less efficient methods of energy production will have to be used instead of carbon. We have seen from experience that solar, wind and other trendy new technologies are simply not in a state to reliably replace fossil fuels. And if there’s one thing environmentalists howl more loudly about than carbon, it’s nuclear energy, so we can take that right off the table.
Being forced to turn to these inferior technologies will inevitably cause prices to rise, meaning that consumers will have less money in their pockets for other things, meaning reductions in consumption and savings, meaning fewer jobs, meaning less income for the nation as a whole. In short, environmentalists are so concerned about saving the planet so that we can have a nice place to live, that they are perfectly content to plunge the very people they claim to care about into poverty.
In reality, the quickest way to develop alternative energy technologies that actually work is not to subsidize them at the taxpayer’s expense, but rather to make use of the cheapest, most efficient production methods available with the aim of maximizing wealth, and therefore increasing the availability of funds for research and development. Bowing to the pressure of the G20 summit by paying lip service to environmentalists while adopting policies that will have little impact on the environment, but great impact on human prosperity is a feeble and transparent political ploy designed to look better than it is. Anyone who takes a moment to think through the long term consequences of carbon taxes, rather than the short term political gain, should be able to see that salvation lies not in government regulation, but in the incredible force of innovation and invention that has historically come only from the free market.