I love a good takedown of some tired talking points, and lo, we have another doozy. You know how Andrew Scheer’s whole schtick and electoral campaign strategy is that carbon pricing makes life unaffordable for people because it drives up costs? This is the narrative he’s pinning his fortunes on, and lo, we find more data that it’s simply not true. Data from Alberta, which implemented its carbon tax two years ago, found that the inflation levels weren’t any different from other provinces, meaning that carbon taxes didn’t drive up prices. Mind you, having data won’t stop Scheer’s carousel of lies, because lying to people to make them angry is what he thinks is going to win him the election (and it might), but it’s still a lie, and we have yet more proof that it’s a lie.
Has Alberta's CTax affected the overall cost of living? Some claimed it would have a large effect (contrary to careful analysis).
With today's inflation data, we now have *two full years* of data to check.
Answer: No. AB inflation similar to elsewhere. #ableg pic.twitter.com/c8z2q2ZxLq
— Trevor Tombe (@trevortombe) January 18, 2019
To be sure, this isn't to say there's no effect. But the estimated effect of CTax on aggregate prices in general, and food prices in particular, is on the order of a tenth of a percent. Not something we'll be able to notice or measure in the data (which is why we have models).
— Trevor Tombe (@trevortombe) January 18, 2019
Of course, that doesn’t mean that the other side isn’t being sloppy with its own messaging. Rachel Notley is trying to go after Jason Kenney talking about tolls, but she undermines her own arguments for a carbon tax because it’s the logic works the same way. But that’s the attempt at populist messaging for you. Unfortunately.
The argument for either is very similar. There's an externality, and pricing that improves outcomes.
Yes, costs for certain activities goes up with either policy, but other taxes can be lowered or transfers provided.
— Trevor Tombe (@trevortombe) January 18, 2019
Meanwhile the Yukon has come up with their carbon pricing system, which involves a certain level of rebates, with higher levels to those in remote areas – something that is of particular concern for those living in any of the Territories.
Details on how Yukon will use CTax revenue: https://t.co/mOkuqiXPit Looks well thought out, given unique challenges in the territories.
And since YG/Visitors/Feds are ~20% of fuel use (paying CTax), returning all rev as a rebate makes this is a net tax cut for Yukoners. https://t.co/cXKbC1Zjlw
— Trevor Tombe (@trevortombe) January 18, 2019
Perspective on providing a full refund to placer miners: it means individual rebates have to be $165/yr smaller than they otherwise could be.
— Trevor Tombe (@trevortombe) January 18, 2019
And looks like you get rebates for kids at the same rate as adults. Only variation is whether in remote community or not.
For family of four in remote area, rebate = $1,250 by 2023. Much larger than CTax costs are likely to be for a very large majority of families.
— Trevor Tombe (@trevortombe) January 18, 2019