Carbon tax is an opportunity to level the playing field.
The problem is when we see the word TAX, we have a visceral reaction to it and why not? Honestly paying taxes is frustrating, and expensive. So often we do not feel that we are getting our money’s worth. The issue of Taxes is not the topic for today.
Carbon is the topic today.
2016 is the warmest year on record thus far. We have seen record extremes in weather. Oil prices are ridiculously low – how can this be a good thing for our earth? Well to be honest it is the best thing that could happen. Rather than adding a tax to the price of carbon, oil prices have made it unprofitable to harvest from the tar sands and other areas that have carbon intensive extraction processes. So the oil stays in the earth. That’s a good thing.
For many years, socially responsible investors have been demanding a balance of our energy needs. We have asked that our grids go green – nuclear, wind, solar and hydro electricity are all earth stewardship alternatives….I saw that! Ok for the purists of corporate social responsibility, you just screamed, “No nuclear never!” Nuclear is an expensive and risky alternative but for today it is safer than fossil fuels. Many countries have a very green grid. Canada included. The focus on many countries is to reduce the production of fossil fuels.
The challenge is that to move away from fossil fuels loses MANY jobs; both in fossil fuel extraction and in their subsequent support infrastructure.
So what is the answer?
A tax that becomes a neutral revenue tax. Like tobacco, if you smoke, you pay an exorbitant amount of tax to support the healthcare costs associated with your decision.
So if you choose to use carbon, you pay a tax for the costs and consequences to our world for your choice.
A carbon tax can help develop new industry and jobs in the economies that were carbon intensive. Rather than fight against it, negotiate now to ensure that all people and economies will have a way forward.
Cara MacMillan MBA