The Globe & Mail: We can’t solve our wallet problems by neglecting our climate problems

Originally published as Paul Kershaw's personal finance column in The Globe & Mail.

With inflation on the rise, Canadians of all ages may want to tune out the latest warning from UN Secretary-General Antonio Guterres that “We are on a highway to climate hell with our foot on the accelerator.” The prospect of paying for our pollution as part of the fight against climate change can feel like one more hand in our pocket, reaching for a wallet that is already running on empty.

But we can’t solve our wallet problems by neglecting our climate problems. Failing to do enough to reduce climate change discriminates against younger Canadians and future generations, since they will bear the lion’s share of climate risks and costs. Happily, we don’t need to make this trade-off.

We can ease the financial squeeze on young people’s finances by increasing parental leave payments, reducing the costs of child care to no more than $10 a day, reining in home prices, and building more homes, including rental units, closer to where we work and study.

The more we succeed in fighting the financial pressures created by inflation in these ways, the better we position ourselves to deal with the costs of reducing carbon emissions, and proactively adapting to the curve balls climate change keeps throwing.

Federal Conservative Leader Pierre Poilievre is therefore on shaky ground when he courts future votes for the job of PM by promising to scrap the federal price on carbon pollution. So is Alberta Premier Danielle Smith when she threatens a constitutional crisis to evade the Supreme Court decision that found in favour of the carbon levy. As was Ontario Premier Doug Ford when he wooed voters in his campaign for re-election on a promise to reduce Ontario’s gas tax.

All three leaders imply they don’t want the fight against climate change to hurt parents as they taxi their kids around. Nor do I, which is why I founded Generation Squeeze – an organization devoted to releasing the vise-grip of money pressures facing younger Canadians.

Skeptics of climate science too often misinterpret environmental risks as a revolver empty of most bullets. Spin the cylinder, pull the trigger, and the odds are that no one will be immediately harmed. But you won’t find many parents lining up to play Russian roulette with their kids.

Doing too little to prevent the acceleration of climate change is even riskier.

Hurricane Fiona showed why climate change threatens to swamp our coastal cities. The heat dome in B.C. and tragic fires in Fort McMurray, Alta., reveal that climate change threatens to burn our forests and towns. Combinations of drought and atmospheric rivers made more frequent by climate change threaten the fertility of our soil, risking more hunger. Climate change brings bugs for which our immune systems are not prepared.

The Canadian Climate Institute shows that climate change already costs our economy tens of billions by stalling growth and adding costs such as expensive building and infrastructure repairs after each new round of extreme weather.

So it’s irresponsible for some political leaders to imply that pollution pricing exacerbates inflation for most Canadians. Such claims ignore that climate change is a big source of food inflation. They also neglect that the federal price on pollution actually delivers eight in 10 households more money than those households pay for their carbon emissions.

Far from a source of inflation for most, we should consider pricing pollution as an important health intervention. The World Health Organization identifies climate change as the greatest risk to human health in the 21st century. Pollution is already killing us in Canada and abroad, with the rates of death, illness and hardship expected to accelerate.

The logic for a carbon price is simple: people pollute more when pollution isn’t priced – as demonstrated by Nobel Prize-winning research. For anyone feeling the pinch of inflation, it’s time to apply this logic to a broader tax shift that could benefit the vast majority. We need to tax less those things we all want, such as better incomes for lower and middle earners. We need to tax more what we don’t want, like pollution, crazy home prices and extreme wealth inequality.

By calling collectively for this #TaxShift, low and middle incomes could be stretched further to cover expenses. We would also slow down inflation by asking those benefitting the most from it to contribute more to public coffers. Governments could pay for fairer investments in young and old alike to reduce major costs of living, such as child care, health care and affordable housing.

Together, these outcomes would reduce our tendency to leave younger and future generations with unjust levels of economic and environmental debt.