Ontario Premier Doug Ford is right. Canadian gas buyers have a right to know how much they are paying when it comes to the hidden costs of the gas they buy. This is the premise of the so-called Federal Carbon Tax Transparency Act (CTTA) and Ford’s plan to require stickers for gas pumps starting Aug. 30, which would disclose how much drivers pay in carbon taxes when they buy gas.
On the issue of transparency, it seems some groups are already crying foul. The Ontario Chamber of Commerce and the Canadian Civil Liberties Association objected to some of the CTTA’s glaring omissions as a proposed carbon tax of approximately 4.4 cents per litre of gas took effect in Saskatchewan, Manitoba, Ontario and New Brunswick (the carbon tax is designed to save households money overall in rebates from the federal government).
According to Drew Shindell, “The Social Cost of Atmospheric Release,” Canadian families incur social costs of carbon (SCC), or “long-lived” damages associated with incremental increases in greenhouse gases, when they consume gas.
He estimates the accumulating effect of carbon dioxide gasoline’s main greenhouse gas (GHG), has pernicious effects lasting in century-like increments. While certainly not the largest global source of GHGs, Shindell points to the environmental damages, the SCC of gasoline consumption, as adding a full US$1.003 per litre (non-diesel) — or roughly double the price Canadians currently pay.
The haunting subtext of Doug Ford’s proposal is the fact that a four-per-cent increase in the price of gas due to a carbon tax significantly under-represents what Canadians pay in terms of accumulating social costs when consuming gas.
And what is so inconvenient about these social costs, from a consumer perspective, is that they remain unheeded largely because they cannot be known in the present. There is salience gap, or a significant psychological barrier between their cause and effect, when consuming gas. This is coupled by a dearth of information about the climate effects of gas consumption that disallows Canadian consumers to respond adequately to these social costs.
“This rhetoric can easily illicit anti-government sentiments and stall meaningful climate policy.”
Carbon tax politics aside, the SCC in a climate emergency places stark demands on all drivers to begin seeking alternatives to conventional petroleum fuels (transportation emissions are the second-largest source of GHGs in Canada).
The lack of any political affect that deals in these invisible costs affords the oil industry, and Ford, some powerful political rhetoric. Ford’s anti-carbon-tax rhetoric, combined with gasoline as an unparalleled commodity of modern life, invokes loss aversion in the absence of any consistent consumer information that describes the climate effects of gasoline consumption, and its inevitable social costs, to consumers.
This rhetoric can easily elicit anti-government sentiments and stall meaningful climate policy. In these politics, a carbon tax will simply make an essential commodity more expensive.
Regulating the fossil-fuel industry is inevitable
But Ford surreptitiously landed on a great idea. Consumers ought to know the full story, not just the industry one, as we ended up seeing back in 2015 when the City of North Vancouver pioneered the idea of including climate change warning labels on gas pumps. And it seems the idea is spreading globally. Sweden recently moved (independent of Canada) towards mandatory information disclosure of GHG emissions at the pump nationwide starting next year.
The Toronto-based group OurHorizon.org introduced warming label legislation in the City of North Vancouver, and it was quickly co-opted by oil industry trade groups. The Canadian version — lobbied by a collaboration between the Canadian Fuels Association, the Canadian Independent Petroleum Marketers Association (CIPMA) and the Canadian Convenience Stores Association — became a “public-private” initiative.
Or, as Rob Shirkey of Our Horizon describes it, the City of North Vancouver “council/staff simply caved to industry” as political concerns the labels were “guilt trips” melded with industry objectives to protect its interests.
With CIPMA designs now in charge of serving public interest, “Smart Fuelling” labels became industry greenwash, controlling how the industry is seen and wishes to be seen. “Government-sponsored” labels helped cast the group as “industrial leaders” consulting people on how to use energy responsibly, while depicting fossil energy as “green” when used with maximum efficiency. North Van labels became less government regulation of a key industry in the Anthropocene; explicit warnings about climate change effects from gasoline consumption that should be avoided; and more “tips” to drive efficiently as the default course of action.
Armed with the pastiche of a government fuel efficiency label, an industry with a very poor environmental record was able to appear like it was taking action and responsibility for climate change. Meanwhile, the “drive responsible” theme of Smart Fuelling labels became a distraction from the need for more aggressive government regulation of oil by emphasizing voluntary action — not mandatory government regulation of a key industry in a climate emergency — as the default way to prevent climate change.
In contrast, the Swedish Association of Green Motorists, along with parliament member Karolina Skog, have devised a scheme that seems less favourable to the oil industry and more in favour of putting government in the business of sustainability, establishing regulatory certainty and serving public interest. Each time they fill up, Swedish gas buyers will now be reminded that choosing options other than conventional fuels will be a better, long-term choice.
“The labels could help set the stage for more aggressive emissions-cutting policies.”
Ostensibly designed to introduce an environmental benchmark measure, the Swedish warming labels place Big Oil on public notice for improving their performance across the industry. No longer given a free ride to pollute, conventional fuels — using a grade-scale labelling system — will receive a “high emissions” impact rating and note the fuel source’s origin, while EV charging stations will receive a “low impact” rating. Bio-fuels, a somewhat erroneous source of emissions reductions, will get a “mid-range” impact rating. Importantly, the public are offered abstractly perhaps, guidelines towards greater emissions reductions and therefore maximum socio-economic benefit.
Rather than promote fuel efficiency as a solution, the labels’ public disclosure of the highest climate impact fuels sets a social precedence for drivers to choose, and adopt, the least carbon-intense sources of energy. Politically, the labels could help set the stage for more aggressive emissions-cutting policies. For ever-increasing emoluments on carbon, publicly challenging the “normalcy” of consuming conventional, climate-busting fuels could help in the political efforts towards these ends.
Sweden’s labels at the pump —far less coercive, and more politically palatable than carbon taxes — serve as a social marketing tool for government that could play a supporting role in the political efforts involved in getting to the true social cost of carbon. Communicating the leaders and the laggards to the general public, the labels’ illustrations of good and bad choices put pressure on industry while empowering consumers to exert significant influence on oil industry behavior.
The North Van labels in contrast, put industry groups in an authoritative position dispensing “expertise” on fuel efficiency that serve their interest in keeping the more extensive government regulations needed away. The Swedish initiative will utilize the dual powers of fear and praise. Swedish “eco-labels” will reward and publicize climate leaders and publicly shame climate laggards. Sweden’s initiative, in other words, puts government (not the oil industry) in charge of serving public interest.
“The public will be asking for it soon enough.”
And Sweden’s eco-labels could provide incentives to go beyond compliance. Public notice is not limited by a fixed upper-bound, unlike carbon taxes, which are as good as the current politics’ ability to get the price high enough, or conventional command and control regulation (like ICE bans happening globally that do not guide drivers of existing fleets towards the least climate-impact choices).
More succinctly, warming labels at the pump are designed to signal getting off conventional petroleum fuels as quickly as possible. While no panacea for the complexity of our GHG problems, the labels as visible illustrations of damage will, as Karolina Skog describes it, “give the public a lot more information than they have today.”
Germane to the politics of carbon pricing, which Ford is exploiting, the labels can operate where there are no other current, politically feasible ways to initiate more aggressive, transport- emissions-cutting policy.
So, a carbon tax warning sticker? Go for it. But Andrew Schatz of “Regulating Greenhouse Gases by Mandatory Information Disclosure” warns the oil industry failing to disclose the full harms of greenhouse gases to the public would subject it to future liability.
Doug Ford and the oil industry should take note. If you want to put a warning label on the gas pump, be sure to add the total costs, for transparency’s sake. The public will be asking for it soon enough.
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