LETTER: GDP and carbon pricing

Reader Ron Robinson says carbon emissions are a cost of production, like materials and labour.

When industries and governments want to show how they have contributed to the overall health of the economy, gross domestic product (GDP) tends to be the reference point — the value of goods and services produced. Like most statistics, GDP is not immune from creating illusion.

In the discussion around carbon pricing, our current government has regularly stated that carbon pricing/carbon fee is a “job killer.” It would have a negative impact on GDP. This is where the illusion comes in. The cumulative effects of greenhouse gas emissions are a real cost of industrial production, just as are raw materials and labour. The big difference being that, until now, the cost of those emissions has been ignored — not a line item on a balance sheet.

Now that we understand greenhouse gas emissions are indeed a real cost of production, it seems obvious that it be recognized and factored in to GDP.

As consumers, having a carbon fee allows us to take on some of the responsibility for greenhouse gas emissions. They never have been free, we just didn’t realize the cost would eventually have to be paid. The good news is that there are many different versions of carbon pricing, all of which allow for a transition to sharing the real cost of emissions.

Carbon pricing is one of the easiest ways to get started in dealing with a problem that is global in scale. It is only part of a series of complex policy decisions that will need to be made by governments at all levels.

Ron Robinson

Nelson

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