Dion's carbon tax – he was right then and wrong now

After two years of the Conservatives’ distraction and obfuscation, and 13 years of Liberals breaking promise after promise to reduce pollution, you don’t have to be an environmentalist to want action on the environment -- and fast.

But suddenly instituting a carbon tax is the wrong way to make-up for Liberal and Conservative governments who haven’t done much to move people away from fossil fuels.

Critics of Dion's carbon tax have been clear about why it's the wrong idea right now:

“A carbon tax is less effective than a carbon market at reducing emissions … This is simply bad policy, for the following reasons:

1) A carbon tax is almost always implemented as a direct tax on fossil fuels. Given the current price of these fuels, however, it is difficult to argue that a further price signal will dampen consumption or shift demand.

2. A carbon tax is a flat tax – it costs each polluter a fixed amount per tonne of emissions. Such a tax will not inflate with a bull market or recede in times of difficulty. In the energy market, in particular, soaring prices make anything but a prohibitively high tax a mere nuisance for large producers.

3) Finally, and most significantly, valuing reductions in emissions equally across all sectors and industries eliminates the potential benefits to be had by maximizing reductions where the cost is lowest. In a carbon market, those areas that produce the least expensive real reductions will experience the highest level of interest and investment, maximizing the level of reductions per dollar spent.

The critic in this case was Stephane Dion – from his Energy and Climate Change Plan in the Liberal leadership race.

Less than two years ago, Dion promised Liberals that he was against a carbon tax – and fought those (like Ignatieff) who were in favour of one. He won the votes of green Liberals based on that promise. Now he has spun in the other direction to say he now wants a carbon tax. Liberals who voted for Dion were duped.

Dion was right then – a carbon tax is punitive, regressive and imprecise (just ask Warren Kinsella) – and he’s wrong now.

So why has Dion reversed himself? Is he so desperate to show leadership that he’s willing to flip-flop on one of his key leadership planks? Has Ignatieff overpowered Dion on policy matters? Are Liberals fishing for revenues to pay for over-blown campaign promises? Are the polls so bad for Dion that they are desperately grasping at anything to move “Liberals-are-helping-Harper” out of the headlines? Who knows?

But what should really worry people, especially those who desperately want action on the environment, is that if Dion has changed his position so quickly on carbon tax, what’s the next policy plank he’s likely to abandon?