Editorial: Dion’s green protectionism
Posted on 25 July 2008 by Jack
Stéphane Dion has officially let the protectionist cat fully out of the Green Shift bag.
From the day his ambitious plan for a federal carbon tax was announced, the potential effects on international trade have been perhaps the most important corollary remaining to be addressed in detail by the Liberal leader. If Canadians are presented with a higher price for goods and services that have been carbon-taxed at the producer level in Canada, it stands to reason that they will seek out imported alternatives, as will buyers of our exports. The hoped-for “revenue neutrality” of the plan won’t do anything to mitigate the damage to domestic industries, especially since most of the prospective revenue is to be reinvested in making our tax system more progressive. And meanwhile, if the replacement carbon-based energy comes from places that have less stringent environmental regulations than we did to begin with (a reasonable assumption for anyone who’s visited, say, Nigeria or Kazakhstan), the Green Shift will actually end up having a negative net effect on the planet’s greenhouse envelope.
In other words, the Green Shift is likely to be a farce unless it is accompanied by some form of protectionism that prevents the replacement of relatively carbon-clean Canadian goods by dirty foreign ones. And that is, in fact, Mr. Dion’s answer to the problem: He says he wants to levy new tariffs on certain targeted environmental offender countries — though he’s not saying which ones. (Elect me first, then you’ll find out what I’ll do.)
But apparently, Mr. Dion isn’t quite ready to don the mantle of out-and-out protectionist. Thus, the Liberal leader is gamely trying to spin his plan as a move to counter protectionism elsewhere, rather than as an abandonment of our own NAFTA, GATT and WTO principles. “The United States,” he said to a Kanata, Ont., audience on Wednesday, “is looking more and more at carbon pricing and carbon tariffs.” If we are willing to tax our own carbon output pre-emptively, Mr. Dion suggests, that will give us the moral high ground when the Americans finally jump on the Green Shift bandwagon, and allow us continued access to American markets.
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