How do you like your Green Shift now?

The price of gas in Canada is back up to $1.20 a litre, even $1.30 in some cities. And with crude oil at $105 a barrel and rising, the price at the pumps is likely to climb higher still.

It’s tough on an economy recovering from the Great Recession, and it raises prices on everything from food to airplane tickets.

So Stephane Dion should be pleased.

In the 2008 election Dion, the former Liberal leader, proposed a carbon tax he called the Green Shift. He said the tax would “shift” Canadians away from polluting activities such as driving cars and heating homes towards “using cleaner energy or innovating to become more energy efficient.”

Seriously, that was the plan: Make fuel so costly to burn that Canadians just wouldn’t do it anymore. Exactly how Canadians were supposed to suddenly “innovate” to use less energy when, say, driving their same old car was never quite explained.

But let’s be non-partisan. Progressive Conservative Joe Clark can claim to be the inventor of the Canadian carbon tax back in 1979 when he proposed an 18 cents/gallon tax hike on gas.

Hypocrisy

And no one less than Al Gore, Nobel Prize Winner, Oscar Winner, and proud owner of three power-gobbling homes has called for a tax on carbon, too. Gore’s 20-room Nashville home burns so much energy, in 2006 his electricity and gas bill was $30,000 — more than many people’s yearly mortgage payments. For rich men like Gore, paying an extra $25,000 a year in energy costs isn’t a big deal — especially when being anti-oil is a profitable business.

But for mere citizens, higher energy prices are a problem, because of what economists call inelasticity of demand.

Inelastic demand describes something you just have to buy, no matter how expensive it is. Like a glass of water in the middle of a desert — you’d pay anything for it, if you were thirsty. If there’s enough water for everyone, the price will be stable. But if there’s a shortage — if a single person has to go without — even a small reduction in supply can cause a massive spike in price.

That’s what’s going on with oil right now: Libya produces less than 2% of the world’s oil supply, but panic over its reliability has caused oil prices to jump by more than 10%.

Politicians traditionally like to tax luxuries that are discretionary — things people can do without. And their favourite taxes are “sin” taxes, on things like liquor. But since when is driving your kids to school, or fueling up an ambulance a “sin” to be taxed?

That is the hypocrisy of the left. They demand fuels be taxed for environmental reasons. But when the price of fuel rises for other reasons — say, instability in the Middle East — the left accuses the oil companies of gouging. Well, which is it?

Staying high

Like other global commodities — steel, gold, wheat — the price of oil is set by the principles of supply and demand. China and India are demanding more each year — they all want to be two-car families. So don’t expect the price of oil to come down anytime soon.

Do you hate paying more at the pumps because of Middle East chaos?

If so, then why would you ever tolerate paying more on purpose, because of liberal carbon taxes?