The Social Justice of Carbon Taxes


University of Ottawa Law Professor, Nathalie Chalifour, gave a compelling presentation on the merits – and cautions – of carbon tax at the University of Calgary on October 16, 2012. Professor Chalifour focuses on the interdisciplinary relationships between law, economy, environment, and social justice. The well-attended presentation was entitled “Carbon Taxes to Address Climate Change - Are they Effective? Are they Fair?”, and focused largely on British Columbia’s experiences with carbon taxes, touching briefly on experiences in Québec and Europe.

Professor Chalifour noted the success or effectiveness of BC’s carbon tax (see Sustainable Prosperity’s 2012 report here), while recognizing some shortcomings in fairness leading from carbon tax revenues.

Prof. Chalifour explained how many taxes, including carbon taxes, are regressive, in that the burden of those taxes is distributed unevenly, frequently exacerbating the problems faced by society’s most vulnerable. Low-income individuals and families spend a higher percentage of their disposable incomes on energy costs, and yet often have reduced flexibility to reduce their energy consumption. In this respect, Prof. Chalifour commended the refundable Low Income Climate Action Tax that helped offset the regressive nature of the carbon tax in its first year, but noted the need for this Action Tax to be indexed with the carbon tax, in order to maintain the positive effects of the first year. According to her calculations, it would take 13% of the total carbon tax revenues to fund the Action Tax at an indexed level.

Professor Chalifour is optimistic that carbon taxes will be introduced in other Canadian provinces in the future, and hopes key players will consider the social justice implications of their policies. Some of her suggestions? --Enable meaningful participation of all communities in the decision making; devote a portion of revenues to climate change policies (eg. Québec’s Green Fund); and calculate a “social dividend” and draft policies that recognize the value in social welfare benefits.
 

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