Why are carbon taxes so unpopular? According to the latest World Bank report on carbon pricing, 23 countries have carbon taxes (another dozen jurisdictions have only emission trading systems like the one recently dropped by Ontario).
At least two jurisdictions— Australia and Washington State – have disbanded carbon tax proposals in recent years. Another carbon tax will see its death if Alberta’s Conservative party leader, Jason Kenney, has his way in 2019.
In contrast, 176 countries have targets for renewable energy and/or energy efficiency and 110 jurisdictions have feed-in tariffs. With relatively so few countries using carbon taxes, a new paper published in WIREs Climate Change asks why this is the case — a question to which Canadian politicians should also pay attention this coming election year.
Carbon pricing can be implemented with a carbon tax (e.g. BC and Alberta) or an emission trading system (e.g. Quebec and Nova Scotia). The case for carbon pricing is based on minimizing economic costs associated with controlling GHG emissions.
Many economists argue that only a single price on carbon is needed to control emissions since businesses and consumers will find the best technologies to reduce costs with as little government intervention as possible.