Do carbon taxes work?

Ontario has promised to adopt a carbon pricing system to discourage its residents from buying and using carbon emitting fuels. Details of the plan are still in development, but the province is looking to British Columbia's carbon tax as an example. We hear from two economists with differing views on whether and how carbon pricing works. Stewart Elgie of the University of Ottawa argues carbon pricing is an essential weapon against climate change. Former StatsCan Economic Analyst Philip Cross says carbon taxation does the environment no good, while potentially damaging the economy.

If you do it in a smart way, you can get significant environmental benefits, as we've seen in British Columbia, without hurting the economy and while actually laying the foundation for the economy of the future.- Stewart Elgie

Elgie points to a 16 percent reduction in fuel consumption in BC as proof that a carbon tax can work.

"If you do it in a smart way, you can get significant environmental benefits, as we've seen in British Columbia, without hurting the economy and while actually laying the foundation for the economy of the future."

But Philip Cross says the for a carbon tax to actually have an effect, it would need to be much higher than the seven cents a litre charged in BC. 

To have significantly lower emissions you're going to have to have a hefty tax, and if you have a hefty tax, there's going to be implications for economic growth.- Philip Cross

"To have significantly lower emissions you're going to have to have a hefty tax, and if you have a hefty tax, there's going to be implications for economic growth." 

We'd love to hear your thoughts. Does a carbon tax make sense for Ontario and for the rest of Canada? Send your email to [email protected] .