But we already know what this implies for the necessary size of a carbon tax - it has to be pretty high for consumer behaviour. For enterprises, it wouldn't necessarily need to be as high, but would need to be high enough to make it green changes actually deliver a comparative advantage to those firms willing and able to make the switch. We're likely to need a tax in the range of $100-150 per tonne. $10 per tonne (ala BC) will have an impact, but it will be negligible.
You and others like to referr to the success of the carbon tax in Scandanavia- where it didn't have to be that high before there was impact.
This points to the necessity to have carbon pricing in tandem with aggressive green initiatives.
Which is corraborated by the experience that we have that the kind of energy price increases that will come with a carbon tax cannot be expected to bring any more than minimal drops in comsumption compared to the pricing sledgehammer that is driving them.
And in North America whenever Liberals bring in carbon taxes, they bring it in with negligible green initiatives, and tax and fiscal regime that militates against spending intitiatives.
It is true that with enterprises pricing/incentive changes are going to translate more into actual consumption and emission reductions. But even there:
1. Historical experience is that firms very imperfectly take up savings/profit opportunities.
2. Again, our experience where this has worked in Europe is where carbon pricing push goes along with substantial investment incentive programs. We have no basis to expect consumption/emmission reductions in line with the amount of carbon tax 'push' if we do not put as much attention into the green spending initiatives as we do into getting the carbon pricing.
In practice, it ends up being a distraction to launch it this point into a 'technical' comparison of carbon tax versus cap and trade.
Thats the cart before.
The real question is how do we get a carbon pricing regime and the ramp-up to agggressive green initiatives that are its requisite complement.
And the relevant overall package of the Liberal carbon tax plans that are in place or have been offered, not only lack the green initiatives, they decisively cut off the political-fiscal capability of getting them.