How do you combat incomplete information?

On the news last night, an interviewee stated two times that the carbon tax was responsible for rising food prices. These two articles, one an analysis of the effects of the carbon tax on increased costs  and the other on the impacts of the carbon tax on farmers, describe the complexities inherent in implementing a carbon tax equitably on all sectors. It is interesting to note in the latter that seldom do opponents mention the incentives that are available to farmers to introduce new efficiencies and innovations to their practices.

When the carbon price system was introduced in 2018 as the Greenhouse Gas Pollution Pricing Act, the on-farm use of gasoline and diesel was exempted as there are currently few viable fuel alternatives as replacements. How many exemptions can carbon pricing afford, before it becomes meaningless?

I believe that many people are risk adverse to change and that incentives are needed to prompt the necessary behaviour change that are crucial to reducing GHG emissions. There is a slippery slope of sector-by-sector, interest-by-interest exemptions that risk fundamentally undermining carbon pricing as an incentive to encourage clean technology and low-emission alternatives. 

There is no doubt that farmers are on the front line of the impacts of climate change on their operations, so one would think that they would be leading edge adopters of clean technology mitigation.  Yet, Canada's greenhouse inventory found net emissions in the sector had not changed between 1981 and 2018. Given the uptake in the financial incentives offered the sector, perhaps we need more investment in providing innovative inducements for adoption.

The other article on the impacts on consumer purchases shows that recent research has clearly shown that a significant portion of the increase in inflation is the result of a global surge in energy prices. With the latest data, the gradually increasing indirect taxes, including carbon taxes, including carbon taxes, have cause overall consumer prices to be only 0.6 per cent higher in October 2023 than they were in January 2015.  The article states that “the effect of carbon pricing on rising food prices is even smaller, accounting for the indirect effects of carbon tazes.” Please take the time to read this article as it offers a comprehensive picture of the carbon tax, independent of vested interests to maintain the status quo. 

CRC Comments