Technology, not taxes. That’s how Canadian conservatives plan to fight climate change. Their long-awaited proposal — unveiled last week — promises plenty of fiscal goodies for going green. Under the plan, companies could see hefty cuts in corporate taxes for using eco-friendly technology while homeowners could receive thousands of dollars in tax credits for adopting energy efficient products. Conservatives say these measures will help Canada meet its emissions targets (the country is signatory to the Paris climate agreement), move the global needle on climate action, and establish Canada as an environmental leader.
One thing the proposal won’t do is tax Canadians. “Our plan does not have a carbon tax,” the 60-page write-up emphatically states. That position clashes with the ruling Liberal government — and the governments of 40 other countries — who see carbon pricing as the best way to fight climate change. Canadian Prime Minister Justin Trudeau calls the move, “putting a price on pollution”. Trudeau’s conservative rival disagrees with punitive taxes. At a rally last week, Andrew Scheer told supporters, “conservatives fundamentally believe that you cannot tax your way to a cleaner environment.” For Scheer, the real solution to reversing climate change “lies in technology”, which should be encouraged via tax subsidies.
Scheer’s position has some merit. A recent United Nations report found energy-efficient technology could — on an annual basis — cut 25 billion tons of greenhouse gas emissions, 17 million tons of particular matter (linked to respiratory illness), and three billion tons of human-toxic waste. Sensors and software could also improve the energy efficiency of buildings, homes and cabins by up to 50 per cent, reduce metal consumption by up to 75 per cent and save precious natural resources, like water and land, by 200 billion cubic meters and 150,000 square kilometres respectively.
But that not the whole story. The UN also warns that using green technology may be less beneficial (and in some cases, more harmful) than expected. It’s called the rebound effect – instances where technologically-driven advances in energy efficiency increase, rather than decrease, consumption leading to net-zero (or worse) emissions. For example, because electric cars cost less to run, consumers may drive them further and more often which wipes out the eco-advantage these vehicles have over their gasoline-powered counterparts. According to the Breakthrough Institute, a research centre that promotes tech solutions for environmental and human challenges, this effect means that “for every two steps forward we take in energy savings through efficiency, rebound effects take us one (and sometimes more) steps backwards.” This may erode up to 50 per cent of the eco-benefits promised by green technology by 2030, according to a paper by Barker, Dagoumas and Rubin.