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The fourth myth is probably the biggest one of all — that a carbon tax will simply not cause any reduction of greenhouse gas (GHG) emissions. As consumers we know that we respond to higher prices by adjusting our purchases; businesses similarly respond to higher input costs by switching to cheaper inputs. Such responses to price movements is what makes our market economy tick, which is why a carbon tax — as opposed to intrusive government regulations — is such a pro-market approach to reducing GHG emissions.

What could these behaviour changes look like? Households may use more fuel-efficient vehicles. Or perhaps they will change the way they heat their homes or insulate their basements. Businesses may adjust their behaviour in similar ways, and in addition will have the incentive to develop lower-emitting ways of making their products.

There is plenty of research from Canada and around the world showing that carbon taxes actually do reduce GHG emissions. But nobody should expect dramatic results right away. It takes a while for households and businesses to adjust to new prices. Their responses will gradually occur, and emissions will gradually fall, especially as the carbon tax rises over time.

Alberta’s new climate policy is designed to reduce GHG emissions while protecting the province’s most vulnerable households and also the competitiveness of the business sector. There will no doubt be some growing pains in the first few years. But we shouldn’t let the popular myths get in the way of the facts.

Christopher Ragan is an associate professor of economics at McGill University and the Chair of Canada’s Ecofiscal Commission.