My Climate Action Incentive Payment

August 18, 2019

 

I admit that I sometimes dozed off in Econ 101, but I think I got the essence of the course. It could possibly be oversimplified by the assertion that “There is no free lunch”.

 

Thinking just a little more deeply I reminded myself that there is always a “payer” and a “payee”. That is why I was flummoxed by the advice that I should claim my “incentive payment” on my tax return. This confused me on a couple of levels. My first thought was that I, to use the plainest language, “didn’t do nothin”. So, why are they offering to pay me without my having submitted an invoice or they, having kept track of any of my activities that would warrant such a payment?

 

As I pondered this idea of being paid for doing nothing it struck me that I had already paid them and that they were paying me back with my own money. This is not a novel thought, I agree. But I had just filled up my gas tank and took note of the tidy portion of the price that was tax applied at both the federal and provincial level now boosted further by an imposed carbon tax.

 

So that drove me back to my admittedly incomplete grasp of economic theory.

 

Charity excepted, people don’t usually, and never intentionally, pay for something they don’t get. So why am I getting this so-called incentive payment? And why are they so solicitous as to point out that even if I have already filed my 2018 return, I can easily change it now? Is it altogether too cynical to suppose that I might feel grateful enough to give them my vote?

 

What do they now expect me to do, besides voting for them?

 

One thing they hope, or claim to hope, is that I will buy less fuel for my vehicles. Shamefully, we have two cars and, oops, a lawnmower and a snow blower. I thought last fall I might get rid of my snow blower since I am assured by climate experts that there likely won’t ever again be more than a skiff on my driveway, light enough to remove with a wind powered electric snow blower.  I am glad I hedged my bet this past winter and kept the thing.

 

But then I recalled one part of Econ 101 that intrigued me and that was the thing they call “elasticity of demand”. The classic example of inelastic demand is that I want a specific amount of salt on my eggs in the morning and will want, need and have that amount even if the price of salt triples.  Just now, while giving salt as an example of inelastic demand it occurred to me that government demand for revenue is probably beyond inelastic and is now insatiable.

 

Yet some notable economists have opined that a carbon tax is the best way, maybe the only way, to alter behavior. I have contemplated this, and you can too, while sitting in a traffic jam or creeping along slower than a horse and buggy. Obviously, you and I are there for a very good reason. But what are all those other people doing clogging up the road?

 

My ever-patient wife suggests to me that they are likely doing their thing just as we are doing ours and, furthermore, they are just as frustrated as we are and wouldn’t be there if it wasn’t necessary. In other words, a higher price for fuel caused by a carbon tax won’t significantly change the use of it. Anyone who has traveled to Europe and driven in their traffic, burning gas twice as expensive as ours, knows this and , like so many other things, the opinion of a Nobel Laureate in economics be damned. The elasticity of demand for petrol is likely way down there near salt and the only thing the carbon tax will do, or was ever intended to do, is raise government revenues. To mollify us they offer this absurd Orwellian like “Climate Action Incentive Payment”.  It suggests no incentive, requires no action and is more akin to a bribe than a payment.

 

A final thought. These guys think they can’t lose. If warming, minor as it has been, slows or stops the climate activists will claim victory and vindication. If warming continues it will justify continued and more draconian interventions. But what if we enter a new cooling phase like the one that caused so much devastation just a couple of centuries ago?

 

The frustration arising out of all of this is that climate changes tend to occur over a sufficiently long time scale that no one will remain to claim the high ground or to answer for their sins, whatever the outcome may be.

 

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