Tariffs and rebates may not help much when anywhere from 80-90% of it will be exempt: > No one knows how high a carbon tariff would be but it seems likely it w

Tariffs and rebates may not help much when anywhere from 80-90% of it will be exempt: > No one knows how high a carbon tariff would be but it seems likely it would be imposed at the rate of our own federal carbon tax. A back-of-the-envelope approximation using the example of imports of Chinese and Indian steel shows that the impact would be significant. In 2019, Canada imported 612,000 metric tons of steel from India and China. The emissions associated with those imports are around 1,132,200 tonnes of carbon dioxide, using McKinsey’s estimate of 1.85 tons of carbon dioxide per metric ton of steel produced. > Chinese and Indian steel presumably wouldn’t have to pay the full weight of the carbon tax on every ton of CO2, because we exempt 80-90 per cent of emissions from our domestic industry, and, to be non-discriminatory, the adjustment rate would have to match how we treat domestic producers. That said, even with an exemption rate of 85 per cent a carbon tariff would be costly. At that rate, 169,830 tons of CO2 related to these imports would be subject to the tax, which is currently $40/ton. That gives a cost of more than $6.7 million. At the 2030 rate of $170/ton, it balloons to more than $28.8 million. Apply this technique across a long list of other products from these and other high-emitters and the costs become substantial. https://financialpost.com/opinion/opinion-carbon-tariffs-are-policy-mischief https://financialpost.com/opinion/opinion-carbon-tariffs-are...