Canadians are being led by the Pied Piper of pollution, Pierre Poilievre, away from the carbon tax. Whether it is indeed the Conservative leader with his “axe the tax” slogan and focus on cost-of-living concerns may be debatable, but Canadians’ support for the tax is flagging, down 11 points since 2021.

Meanwhile more evidence accumulates on the efficacy of consumption taxes. A study published last Friday in the journal JAMA Health Forum showed that after taxes targeting sugary drinks were implemented in five American cities, sales fell dramatically. Furthermore, the changes were sustained over time.

The taxes ranged from 1 to 2 cents per ounce, which works out to between 67 cents to $1.30 extra on a 2-litre bottle of pop.

The researchers found that, on average, prices for sugar-sweetened drinks went up by 33.1 percent and purchases declined by 33 percent, i.e. every one percent increase in price resulted in a one percent drop in sales. The study found no evidence that consumers were traveling to make their purchases elsewhere.

Public health authorities say the taxes are good policy because of sugary drinks link with diet-related diseases, including diabetes, obesity and heart disease. The taxes have been endorsed by the American Heart Association, the American Academy of Pediatricians and the World Health Organization.

Needless to say, the soda industry does not approve. It has spent millions of dollars fighting the taxes with some success. Wider introduction of the policies has been stalled by opponents in some states passing laws that strip local governments of the power to pass soda taxes.

All this is reminiscent of smoking and the tobacco industry. The industry spent big bucks for years fighting efforts to reduce cigarette smoking despite growing evidence of the harms to public health. Eventually the evidence was overwhelming.

According to the US Centres for Disease Control and Prevention fact sheet, smoking “leads to disease and disability and harms nearly every organ of the body [and] remains the leading cause of preventable disease, disability, and death in the United States.”

And about the value of taxing the smokes? According to the US NIH National Library of Medicine, “Tobacco taxation, passed on to consumers in the form of higher cigarette prices, has been recognized as one of the most effective population-based strategies for decreasing smoking and its adverse health consequences. On average, a price increase of 10 percent on a pack of cigarettes would reduce demand for cigarettes by about 4 percent for the general adult population in high income countries.”

And that brings us to our very own federal carbon tax. Unfortunately, data has been scarce on its impact on overall emissions, although carbon taxes have been found to be effective in other countries and in B.C.

Economists are in no doubt. A public statement by 3,649 American economists, including four former chairs of the US Federal Reserve, 15 former chairs of the US Council of Economic Advisers and 28 Nobel Laureates, makes the following statement. “A carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary. By correcting a well-known market failure, a carbon tax will send a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future.”

The market failure the statement refers to is the environmental costs of carbon emissions not appearing in the price of fossil fuel products. We do, after all, have a responsibility to pay for our pollution.

The economists point out that not only is the carbon tax the most cost-effective method but one that harnesses the famous invisible hand. How could any free-marketer quarrel with that?

Mr. Poilievre and his Conservatives evidently do. I’m not the greatest fan of economists, but in this case I’ll go with the 28 Nobel Laureates.

2 thoughts on “Who to believe, Pierre Poilievre or 28 Nobel Laureates?”
  1. A tax works if there is another option one can choose. If people in western Canada could choose to take a bus or a train into the city, and instead choose to take their car, then taxing the gas is fair. If there is no transportation other than cars from Brantford Ontario to Medicine Hat Alberta, then that’s a problem, don’t you think? Let me know how to get from Winnipeg to Regina without a car or an airplane.

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