Christopher Flavelle: Carbon tax more taxing on suburbs

For opponents of a carbon tax, Toronto — and more specifically, the 2,700 square miles of fast-growing suburbs that surround the city — offers plenty of ammunition.

I grew up in Toronto and returned last week to visit family. These days, that means lots of driving: Surging housing costs have pushed the city’s population growth into what is known as the Greater Toronto Area, which stretches about 50 miles west, east and north across what used to be farmland and forest.

If you’re a homeowner, or aspire to be one, the sprawl is a boon. The median price in November for a house in Orangeville, a 50-mile drive northwest of Toronto, was $395,000 — a little more than half the $698,000 cost of the median house within the city boundaries. Partly as a result, Toronto’s suburbs are projected to grow in population three to five times faster than the city itself from 2012 to 2021.

If you’re among those who fret about the environment, that trend spells disaster. People who worked in the GTA had an average commute of 33 minutes in 2011, the longest in Canada. And that’s unlikely to get better: Despite the GTA’s impressive commuter-rail network, which has gotten $9 billion and 10 new stations over the past decade, 70 percent of commuters still got to work by car in 2011, essentially unchanged from five years earlier.

The urban spread means more greenhouse gas. Canada spewed more carbon per person in 2011 than any other major industrialized country after Australia and the U.S., as a culture of big homes and the highways that enable them took root. (Thanks, America.) Don’t blame the cold; the average Swede accounts for about one-third as much carbon as his Canadian counterpart.

The stock answer to car-heavy residential and transportation patterns is to change consumers’ behavior by sending a price signal — for instance, with a carbon tax, which increases the cost of gas and electricity, making big houses and long commutes less attractive. If the revenue is returned to the public, say through rebates or tax cuts, there would be no cost, only benefits, for taxpayers in the aggregate.

At least, that’s the argument that proponents have made. In 2008, the Liberal Party of Canada included a carbon tax as a centerpiece of its platform. (Disclosure: I once worked as a speechwriter for Stephane Dion, the party’s leader at the time.) The Liberals lost, though Prime Minister Stephen Harper, a Conservative, hinted this month that he might be open to a carbon tax.

But the lesson from Toronto is that politicians’ reluctance isn’t just a question of ideology. It also acknowledges that although a revenue-neutral carbon tax would leave the total tax burden unchanged, its cost would be disproportionately borne by specific groups of people, especially those who have settled in the exurbs in recent years.

This doesn’t mean a carbon tax is unworkable; it could be phased in gradually, with plenty of warning, and some of the revenue could be used to expand mass transit. The cost could also be offset by using some of the revenue to assist those most affected with greater subsidies for making their homes more energy efficient or for buying low-emission cars. But such solutions are expensive, and as the Liberals learned in 2008, using the money from a carbon tax to pay for new spending is a quick way to erode support.

Those solutions are also incomplete: Significant cuts to emissions will mean getting more people to forgo the suburban lifestyle, not just making the suburbs greener. For those who have already built their lives (and their finances) around suburban life, a carbon tax raises questions of fairness, and those questions might not have altogether satisfying answers.

Christopher Flavelle writes for Bloomberg News.