As Joel Gehrke at the Washington Examiner reports, President Obama's proposed Secretary of Energy for his second term, MIT physicist Ernest Moniz, gave a revealing interview to the Switch Energy Project, a group devoted to promoting energy efficiency. Asked about a carbon tax, Dr. Moniz was, at least, earnest in admitting that carbon taxes raise the cost of energy. And what a raise he's willing to accept:
"If we start really squeezing down on carbon dioxide over the next few decades, well, that could double; it could eventually triple. I think inevitably if we squeeze down on carbon, we squeeze up on the cost, it brings along with it a push toward efficiency; it brings along with it a push towards clean technologies in a conventional pollution sense; it brings along with it a push towards security. Because after all, the security issues revolve around carbon bearing fuels."
Dr. Moniz also admits that higher energy prices are regressive, stressing that any revenues raised from this (whopping) carbon tax would have to be "recycled efficiently to productive uses and to address distributional questions, because some -- the poor -- may get hit harder than others." Of course, in his first term, President Obama authorized the spending of some $90 billion dollars as a "green stimulus," so one presumes that things like Solyndra, home weatherization programs, high-speed rail and the like would have been considered "efficient recycling" of taxpayer revenues as well.
The fact that Dr. Moniz feels comfortable talking about a carbon tax that would -- with intention aforethought -- raise energy prices before he's even confirmed as Secretary of Energy is an indication that perceptions in Washington now broadly accept the idea of including a carbon tax in whatever economic reforms are in America's future. Either that, or Dr. Moniz is stunningly tone-deaf, and will be in for a remarkably unpleasant confirmation process.
What are the implications for Canada? As Christopher Horner observed in an essay on energy policy written for the Fraser Institute, the implications for Canada are serious:
"The primary implications for Canada rest on the fact that Canada has long held a policy of harmonizing environmental regulations with those of the United States, at least the major ones such as National Ambient Air Quality standards. Part of this is due to the North American Free Trade Agreement which urges harmonization of rules as they tighten, but not if they loosen. If the US is particularly aggressive in tightening such environmental standards at high cost, Canadians could soon see their own economy affected through the harmonization process."
Imagine a doubling or tripling of energy prices in Canada, with its vast transportation distances, extreme weather conditions: such a hike could be in our near future, if those who continue to champion carbon taxes (such as Alberta's Premier Alison Redford who was for a federal carbon levy before she was against it) have their way.
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