Economists Endorse Carbon Tax

More than 230 of Canada’s leading economists issued a statement today that agrees with the Green Party tax-shift plan to combat climate change and create an innovative sustainable economy.

Over 230 of Canada’s leading economists issued a statement today that agrees with the Green Party tax-shift plan to combat climate change and create an innovative sustainable economy. “We know that our plan to tax carbon and reduce personal and corporate taxes is the best way to protect the environment and create good jobs for Canadians,” said Green Party leader Elizabeth May. “Today’s letter from top economists at universities across Canada amounts to the strongest possible endorsement of our policy and a scathing critique of the Harper government’s dangerous approach,” Ms. May said. “It’s rare for economists to agree on anything, so to get so many of them calling for what amounts to the Green Party’s Green Tax Shift is further proof that we’re on the right, in fact the only, track.” The economists do not explicitly endorse the Green Party. “We are non-partisan and will undoubtedly be supporting different parties in this election,” they state. The principles they do agree on are, in effect, the Green Tax Shift – a combination of carbon taxes and a cap and trade system, with tax cuts in other areas, support for innovation and fairness for low-income Canadians. “Canada needs to act on climate change now,” the letter states. Action should not be delayed by the current global financial turmoil. And, “pricing carbon is the best approach from an economic perspective” The economists say all policies aimed at curbing greenhouse gas emissions will impose economic costs, and that imposing regulations, rather than relying on market forces, “tends to be the most expensive way to reach a climate change goal.” A carbon tax has the advantage of creating price certainty, allowing industries and individuals to properly plan and take advantages of the potential savings it offers to those who reduce their carbon footprint. The letter also notes the need for measures to help low-income Canadians. It goes on to state that: “Pricing mechanism can allow other taxes to be reduced and provide an opportunity to improve the tax system.” This statement is in accord with the Green Party plan, which would use revenue from the carbon tax for both low-income aid and cuts in income, payroll and corporate taxes, as well as measures to promote innovation. The Green Party plan includes a cap and trade system, which the economists say provides certainty in greenhouse emissions. “Only the Green Party platform has all the elements that the economists recommend, and we are the only party to talk realistically about the costs and benefits,” Ms May said. Groups such as the Conference Board of Canada and eminent international economists including Sir Nicholas Stern, the World Bank’s former chief economist have also endorsed a carbon tax.