Canada Establishes First-Ever National Carbon Price
After long hours of heated discussion, the Canadian government has established the world’s first nationwide carbon price. Only two of Canada’s ten provinces refused to sign the law, arguing that carbon pricing would lead to reduced competition between firms.
During Friday’s meeting, Canadian Prime Minister Justin Trudeau presented his carbon-pricing plan to provincial representatives, aboriginal leaders, and US Vice President Joe Biden. Trudeau’s decision to price carbon was likely influenced by the fear that Donald Trump’s election will lead to increased carbon emissions by the US.
“I understand that many of you are concerned about what the new administration will do. Whatever uncertainty exists around the near-term policy choices of the next president, I am absolutely confident the US will continue making progress in its path to a low-carbon future,” said Biden as he attended the meeting in Ottawa.
Economists often tout carbon pricing, which charges based on CO2 emissions, as the most effective method to reduce “global warming emissions.” Canada’s plan will increase the cost of producing a ton of carbon by $7.60 (the equivalent of 10 Canadian dollars) per year until 2022 when it will have reached about $38.
The price will pause for British Columbia in 2020 at just under $23.
Manitoba and Saskatchewan refused to sign the agreement. “We compete with the Americans in our province for drilling rigs. Our farmers compete with their farmers. Competitiveness for Canadians matters, especially at a time when our energy sector is reeling from low commodity prices,” argues Saskatchewan Premier Brad Wall.
Manitoba Premier Brian Pallister hinted that he might sign the agreement in the future if his province receives more money for healthcare.
Editor’s note: This is really a stupid idea, punishing businesses for being productive. Next thing you know they will be penalizing cows for farting, like California is attempting to do. There is a right way to do things, by the way, see below.