Carbon tax not a good idea

Friday, January 11, 2008

by BETTER FARMING STAFF

“There are other ways of dealing with this issue,” says Lambton County farmer Don McCabe of the idea, proposed in a report presented Jan. 7 to the National Round Table on the Environment and the Economy.

The report was commissioned by the federal government and deals with how the country could reduce greenhouse emissions by 60-70 per cent from current levels by 2050 as well as air pollutants by 50-80 per cent by the same year. It calls for the immediate development of economy-wide carbon pricing policies “either through an emission tax, a cap-and-trade system or a combination of the two.”

Over the long-term the pricing wouldn’t have much of an impact on the economy, the report says, but concedes that in the shorter term it would “cause some economic dislocation and impact, particularly in certain regions of Canada and sectors of our economy.”

McCabe, who has been involved in efforts to establish a framework for a national carbon offset credit system, says such a tax could harm farmers. “The taxes that would come on the products that we need to use on the farm are predominately carbon-based or use energy in their production, therefore we’re going to be undue recipients of this tax.”

In contrast, a system that would allow industries required to reduce their emissions by buying carbon offset credits from sources such as agriculture’s environmentally beneficial activities would allow everyone involved to absorb new emissions regulations “with a heck of a lot less economic shudder,” says McCabe.

It would offer a secondary revenue stream for farmers, he adds.

McCabe says there are two sources of credits that can be found on farms. The first involves soil or carbon sink holes. It’s created by plants removing carbon dioxide from the air and storing it in their tissues or as organic matter in the soil. No-till is the main process used to create the sink and the amount of carbon that can be stored in this way depends on the land’s make-up. Technologies being used on the farm, such as anaerobic digesters may offer even greater capacity for dealing with carbon.

But the industry needs the federal government “to offer the direction necessary to get a (carbon credit trading) system in place,” he says. So far, there’s no firm commitment to do so.

Tony Irwin, a Canadian energy consultant specializing in greenhouse gas risk management and policy consultant, says establishing a pricing policy for carbon will likely have both a positive and negative effect on farming. On the down side, it will increase the price of inputs such as fertilizers, he says. On the upside, he, like McCabe, suggests it could provide farmers with new revenue opportunities in the form of selling carbon offset credits.

Irwin also noted the policy would also likely mean hikes in food prices.

In a statement issued the same day as the report, Environment Minister John Baird says he agreed with many of the report’s recommendations and notes his government has already taken action on many of these including, regulating industry, delivering programs to encourage the use of more fuel-efficient transportation and investing in clean energy technology. BF