One great economic debates in the west right now is if having a carbon tax is a good fiscal tool.
I don’t have a fixed opinion on this. Many economists are supportive of it for a good reason, is that it’s better than any top-down policy to reduce the carbon footprint. Of course, I am more wary of old school pollution than the fixation of having the lowest carbon footprint possible mainly because it’s incredible that we are able to make people having a better quality of life. This require more carbon emissions, but the tradeoff is worth the price as living with Middle Age carbon footprints would be awful. Sadly, since a decade or so, many greens are not quite interested on things like air, water quality rather than going to international symposiums with airports filled with private jets full of dignitaries.
But the problem with a carbon tax is that it could be a policy which hurts some people a lot. In a place like Singapore, it’s easy to impose a policy like that because it’s a place where it’s 100% urban.
In a place like Canada, however some people, living in rural areas, they need to travel to go everywhere. They don’t live in condos like urban hipsters. Also, people living in rural areas do important work. It is very difficult for people in a city to live without products and work by people in rural areas.
The other problematic with a carbon tax will raise the price of everything in remote communities because they have to import many things by air or road. It’s wishful thinking to think that the price of a carbon tax will not be put on people. In a place like Canada (or Australia), there is a score of remote communities which have a cost of living crisis, which few people in larger cities in the south could understand.
Remember how the tax on gas was supposed to be used for roads and public transport, the carbon tax will also be used sooner or later as a general revenue tool like for the gas tax. Some people are right to say that they use carbon as an excuse to tax more to fund multiple things. Where is the breaking point in term of taxes and public utilities fees? This is why that without an important reduction in other taxes, any carbon tax will be seen as a new tax on top of other taxes.
This is exactly what that in France and in Australia, the carbon tax had become a toxic tax. In France, there was riots in Brittany because of a eco-tax on agricultural fuel. Many farmers and people in the agro-business were scared that this would kill their industry.
And yet, there is a sense more and more that the green movement is strong on one-sized-fits-all solution. To prioritize wind energy with his high costs and low rentability (as opposed to hydroelectricity and nuclear energy) makes many people skeptical about the green lobby. Are politicians building wind turbines are more interested about feeling good, or about having the cleanest energy possible which is also efficient at the same time?