Unlike the Vancouver Canucks, B.C.'s carbon tax managed to stave off elimination last week. Although widely regarded - by both environmentalists and economists - as an essential tool in growing green jobs and combatting climate change, many Canadian politicians perceived carbon taxes as toxic after Stéphane Dion's defeat. The results of this week's B.C. election should help put that notion to rest.
Canada has now had two elections in the past seven months - one federal, one provincial - in which a carbon tax figured prominently in the campaign, with very different results. Mr. Dion and the federal Liberals put a carbon tax (the Green Shift) at the centre of their campaign and were soundly defeated. In B.C., Gordon Campbell's 2008 carbon tax also became a major campaign issue and his Liberals were comfortably re-elected.
What can we learn from these seemingly contradictory election outcomes? Here are six main lessons.
First, don't make a carbon tax (or any other complex policy instrument) the main issue in an election campaign. That is what Mr. Dion did, making the Green Shift the central plank is his platform. By contrast, Mr. Campbell listed the carbon tax as just one of many climate policies advanced by his government, under the "economic" pillar in his platform. It was the B.C. NDP, with its aggressive "axe the tax" campaign, that made it a central campaign issue - and it gained them little, if any, support.
Why is a carbon tax a poor issue around which to build a campaign? The best explanation comes from B.C. pollster Angus McAllister, who says: "If you are a travel company trying to sell a tropical vacation, you emphasize the beach, not the flight." In other words, focus on the destination you want to reach, and why it is so attractive, rather than on the means of getting there.
Second, keep it simple. B.C.'s carbon tax shift was fairly straightforward: put a tax on all fossil fuels and use the revenue to cut income taxes for individuals and businesses. Mr. Dion's proposal was more complex: tax fossil fuels, reduce some taxes and use a large part of the revenues to combat poverty. Regardless of the merits of Mr. Dion's approach, it made his proposal harder to explain in today's sound-bite world.
Third, timing matters. During this past fall's federal election, oil prices were near a record high. That made a new tax on carbon a tough sell to voters. In contrast, by the time of B.C.'s election, oil prices had fallen, while public worries about global warming persisted.
Fourth, communication skills are important. Mr. Dion failed to effectively communicate the virtues of his Green Shift. Similarly, while B.C. NDP Leader Carole James vigorously attacked the carbon tax, she was unpersuasive about the merits of her party's approach to climate change.
Fifth, deeper pockets can turn the tide. The barrage of Conservative attack ads assailing the Green Shift and Mr. Dion's leadership had the desired effect. With far fewer resources, Mr. Dion could do little to respond. In B.C., with a more level playing field financially, Mr. Campbell was able to effectively defend the carbon tax from the NDP's attack.
Sixth, good policy alone isn't enough. Most economists and environmentalists agree that a well-designed carbon tax (such as B.C.'s) is the best approach for fighting climate change. It puts a price on carbon emissions across the whole economy. By contrast, the cap-and-trade schemes proposed by the federal Conservatives and B.C. NDP would cover only half of Canada's carbon emissions, those from large industries. (This flaw could be fixed by an economy-wide cap and trade system.) But just having the better policy idea is not enough to ensure electoral success.
The B.C. and federal elections offer valuable lessons to politicians in Canada and elsewhere. In particular, they show that a carbon tax is neither a political albatross, nor a silver bullet.
The mistake is making it the central issue in a campaign. A carbon tax is a very good policy idea, both for the environment and the economy, but it is a means, not an end. It is the larger vision of a green economy, with good jobs and a healthy climate, that leaders must paint to really engage the public and succeed politically.