London Free Press

Today, I’m going to play Devil’s Advocate.

I’m going to propose what I think an honest system of pricing carbon dioxide emissions would look like.

This means it won’t look anything like what Prime Minister Stephen Harper, Liberal Leader Michael Ignatieff, NDP Leader Jack Layton or the Bloc’s Gilles Duceppe have proposed in this election.

Also, please note, I’m not claiming my proposal will be effective, just honest.

Since Canada is responsible for 2% of global emissions (and the oilsands, one-tenth of 1%), nothing we do by ourselves will be effective in lowering global emissions linked to climate change, unless the rest of the world buys in.

First and foremost, that means China and the U.S., the world’s number one and two emitters, responsible for 40% of all emissions. Neither is close to pricing emissions at present.

But since I’m not talking about an effective system, only an honest one, what would it look like?

To begin with, it wouldn’t look anything like the cap-and-trade market the Liberals, NDP and Bloc have proposed, nor the government bureaucracy the Tories advocate to regulate Canadian industries sector by sector.

Cap-and-trade — which Europe’s had since 2005 — is a scam. It hasn’t lowered emissions — it raised them — and it’s riddled with corruption and multi-billion-dollar frauds.

It has hit European consumers with higher energy and retail prices, while raining undeserved profits on energy companies and speculators.

The carbon credit trading system on which cap-and-trade is based, is plagued by fraud and is essentially another subprime mortgage crisis waiting to happen.

Among its biggest cheerleaders are the same Wall Street banks that crashed the global economy in 2008, by trading in toxic subprime mortgage securities.

If cap-and-trade ever takes off globally, carbon credits will go through the same bubble and burst cycle as subprime mortgages did, for the same reason. Basically, they’re lousy assets.

That’s why, if I was choosing an honest system for pricing carbon dioxide emissions, I’d choose a carbon tax.

True, Norway’s had one since 1991, which has only had a minor impact on emissions, but one reason for that is the government exempted too many industries from it.

My carbon tax wouldn’t exempt anyone. It would be a sales tax added to the cost of virtually all goods and services, similar to the Harmonized Sales Tax, with one condition.

Every penny raised, every year, would be returned to Canadians through income tax cuts, or cash rebates to low-income earners who pay little or no income tax.

In order to keep the government honest in administering my carbon tax, I would have the books audited annually by the Auditor General. This would mean hiring a lot more auditors, but that’s the price I (meaning you) would have to pay for an honest system.

Since all the money raised by my carbon tax would go back into the pockets of Canadians, it would actually accomplish what various political parties claim they want to do through carbon pricing.

That is, it would encourage Canadians to consume less — leading to lower emissions — and earn and save more.

Of course, what political parties who advocate pricing emissions really want to do is take in all the money this raises and then redistribute it in ways they figure will buy them the most votes. And that’s not honest.

The problem with my carbon tax is while it’s an honest tax, I don’t know how high it has to be before it starts to lower emissions efficiently.

That’s the fundamental weakness of any carbon tax — it’s great at raising money for governments, but it’s a crap shoot as to how high you have to set it to lower emissions effectively.

But I never said I would come up with an effective way of pricing emissions, just an honest one.

Which is why no political party will ever propose it.