Making pollution costly: How China, British Columbia, and Australia are trying to get it done
This Times report about groundbreaking anti-pollution protests in China ends in a weird way. The story relates how unique protests in the country have stopped the creation of a copper smelting operation in Shifang. And then, as a coda:
But to the extent China toughens its environmental standards, it could erode some of the competitive advantage of Chinese companies and affect those multinationals that depend on Chinese suppliers for a huge variety of materials.
The “but” is a tremendously odd final note in an otherwise optimistic article. The Times is essentially saying, “In a repressive regime, people are finally fighting back. But it might diminish the country’s business advantage to address pollution, so …” It’s particularly odd when one considers the artificiality of that business advantage. The apex (nadir?) of the race to the bottom is scrapping every constraint on business practices — environmental, labor — in order to be attractive in the marketplace. The Times’ move here is like ending an expose about a toy company dumping toxic waste into a city reservoir with, “But ending this practice may make their toys more expensive.” Well, yeah. That’s kind of the point. The market shouldn’t reward pollution or polluters that reduce costs by polluting.
Regular readers will see where this is going.
Fifteen pages later, the paper ran this opinion piece.
On Sunday, the best climate policy in the world got even better: British Columbia’s carbon tax — a tax on the carbon content of all fossil fuels burned in the province — increased from $25 to $30 per metric ton of carbon dioxide, making it more expensive to pollute.
This was good news not only for the environment but for nearly everyone who pays taxes in British Columbia, because the carbon tax is used to reduce taxes for individuals and businesses. Thanks to this tax swap, British Columbia has lowered its corporate income tax rate to 10 percent from 12 percent, a rate that is among the lowest in the Group of 8 wealthy nations. Personal income taxes for people earning less than $119,000 per year are now the lowest in Canada, and there are targeted rebates for low-income and rural households.
But: The cost of creating electricity went up, so …
The authors of the opinion piece, Yoram Bauman and Shi-ling Hsu, make an effective case for the utility of British Columbia’s tax. In essence, it’s a sin tax applied to the corporate world, encouraging good behavior. And, of course, reducing the economic benefit of polluting.
Earlier this week, Australia enacted its own version of a carbon tax, the result of a complicated series of political machinations. Prime Minister Julia Gillard, in an effort to build a working coalition, made a deal with the Green Party to break her own campaign promise and enact a carbon tax. Her likely opponent in an upcoming election has seized on the issue, making repeal of the just-enacted tax a key aspect of his campaign platform. The tax itself is a shadow of British Columbia’s, heavy with subsidies to the impacted companies in a watered-down attempt to toe a middle line on the issue. In short, it’s the worst possible way to come at what should be a solid piece of legislation. Better than nothing — but not by a wide margin.
Politics is always the rocky shoals on which climate legislation gets grounded. In America, the cap-and-trade system introduced in 2009 died on Capitol Hill, despite being passed by the House (the House! Can you imagine! Different times). Democracy makes doing the right thing cumbersome, subject to the vagaries of deal-making and consensus building. Sometimes, it works. Sometimes, it doesn’t.
Which is what makes the protests in China all the more remarkable. Groups of citizens working within much more rigorous constraints than those we see in our democracy managed to effect change from outside the political system. It’s a heartening, astonishing result, one that makes our ongoing debates over how to hold polluters accountable look petty.
It deserves more than a casual dismissal as being bad for business. Such complaints, after all, are what’s crippling our ability to effect change through our democracy.