Putting a Price on Carbon: Habit #4 of the 9 Habits of Highly Effective Resource Economies

The number of individuals and organizations calling for Canada to price carbon is becoming impressive – the ,a href="http://www.ceocouncil.ca/wp-content/uploads/2011/12/Energy-Conservation-Paper-FINAL-December-20111.pdf">Canadian Council of Chief Executives, Shell Canada, the Economist magazine, to name but a few. The fact that the Canadian International Council (CIC) has recently added itself to this list, in its recently released report. The 9 Habits of Highly Successful Resource Economies, is significant on two levels.

First, like many of the other organizations that are calling for a price on carbon, this is not their usual shtick. The CIC is not an environmental organization that is looking to combat climate change at any cost. The CIC is a foreign affairs council that works to use foreign policy to advance the prosperity of Canadians. The topics they tend to discuss are not environmental. They deal with issues like positioning Canada in the age of networks, intellectual property, and economic links with China, India and South America. Their conclusion that pricing carbon is one of the 9 most important things that Canada should do to be a world leading resource economy is further evidence that pricing carbon and managing climate change is no longer an environmental agenda. It is an economic agenda and a prosperity agenda and it is being picked up by the mainstream organizations in this space.

Secondly, the report reaffirms what Canada and the world are learning –when you look at the evidence, pricing carbon works for the environment and it works for the economy. A recent Sustainable Prosperity report studying the impact of the British Columbia (BC) carbon tax concluded that from 2008 and 2011, under the BC carbon tax, fuel use dropped 15% in BC, while fuel use increased over 1% in the rest of the country during that period. Of equal importance, the SP research concluded that the BC GDP over that period changed at a rate almost identical to the rest of the country. One of Sustainable Prosperity’s foundational beliefs is that Canada can become more efficient, more competitive and more environmentally sustainable by harnessing the power of the market. It is encouraging to see that the list of those supporting this belief appears to be expanding.