New Democratic Party (NDP) leader Thomas Mulcair speaks during Question Period in the House of Commons on Parliament Hill in Ottawa September 17, 2012.
Credits: REUTERS/CHRIS WATTIE
The answer is technically yes - the NDP support cap-and-trade, not a carbon tax - but in practical terms it's a distinction without a difference, since cap-and-trade is a carbon tax by another name.
Both carbon taxes and cap-and-trade are designed to do exactly the same thing - put a price on industrial carbon dioxide (a.k.a. greenhouse gas) emissions, caused by the burning of fossil fuels, for which the public ultimately pays.
Under a carbon tax, the public pays more for most goods and services through higher taxes.
Under cap-and-trade, the public pays more for most goods and services through higher prices.
Under both carbon taxes and cap-and-trade, governments increase their revenues, while ordinary citizens pay more for goods and services, either in their role as taxpayers or consumers.
Indeed, the entire point of both schemes is to force the public to consume less, thereby lowering emissions, by taking away more of their disposable income and giving it to government, which then, at least in theory, uses this new revenue to further lower emissions.
A carbon tax is a direct tax imposed by government, applied to goods and services for every tonne of industrial carbon dioxide emissions they are responsible for putting into the atmosphere.
In cap-and-trade, the government sets a gradually declining limit on the total amount of carbon dioxide emissions industry can put into the atmosphere each year. It then auctions off permits, or credits, each one of which entitles the bearer to emit one tonne of carbon dioxide, to major industrial emitters. These emitters then pass along the cost of buying these credits to consumers, in the form of higher prices. They also buy and sell the permits to each other, similar to stocks.
Where Mulcair is being disingenuous is in arguing that under his cap-and-trade scheme, "the polluter pays," implying this means, for example, big oilsands developers and natural gas companies, as opposed to the public. In reality, under both cap-and-trade and carbon taxes, the public is considered the ultimate polluter because the goods and services it demands are ultimately responsible for industrial carbon dioxide emissions.
Mulcair makes a more valid point in criticizing the Harper Tories for hypocrisy, given that the Conservatives supported cap-and-trade in the 2008 election, the same policy the Tories now contend is a "tax on everything" because the NDP support it.
The only difference is that in 2008, it looked like the U.S., under incoming President Barack Obama, was about to adopt cap-and-trade.
Realistically, that would have meant whichever party won the 2008 Canadian election would have had to adopt cap-and-trade here, given how closely our economies are intertwined.
Following the 2008 election, the Conservatives dropped their support of cap-and-trade as political support for the idea collapsed in the U.S., while the NDP (and Liberals) continued to support cap-and-trade in last year's federal election.
The bottom line is that cap-and-trade and carbon taxes are virtually interchangeable.
For example, former federal Liberal leader Stephane Dion campaigned for a carbon tax in the 2008 federal election, despite previously supporting cap-and-trade, while former federal Liberal leader Michael Ignatieff campaigned for cap-and-trade in the 2011 federal election, despite previously supporting a carbon tax.
Finally, the ultimate knock on both cap-and-trade and carbon taxes is that based on real-world experience wherever they've been tried, they've been ineffective in lowering greenhouse gas emissions linked to climate change.