Stephen Harper spent a fair amount of time today saying that, if the Liberals get in power and institute a carbon tax, the country could be thrown into recession and, as a bonus, national unity would be threatened.
Jack Layton, too, had not very nice things to say about Stephane Dion’s carbon tax and income tax cut.
Here though, are some non-partisan types, that actually think Dion’s approach is best.
First, here’s an excerpt from e-mail exchange I had before the writ was dropped with Mark Jaccard, a professor at Simon Fraser University, who specializes in the economics of climate change policy:
Conservatives have intensity cap on industry (with a huge 100% offset loophole), and no price or regulation on the 50% of emissions coming from non-industry (vehicles and buildings). These policies will not reach the emission reduction targets for 2020 that Harper and Baird say they will.
[The] NDP want [an] absolute cap on industry. All permits will be auctioned and the money used to subsidize offsets among non-industry. This won’t work. Industry will shut down from the cost hit. And offset subsidies do not reduce emissions.
I am not pro-Dion (see my 2006 CD Howe attack on his policies when he was environment minister) but the Liberals (and Greens) have the only policies that are realistic in that they apply an economy-wide cost on emissions to industry and non-industry. That or an economy-wide absolute cap (which Dion promises within 2 years) is the only way to reduce emissions without destroying the economy.
And here’s the Canadian Council of Chief Executives, a lobby group which represents CEOs at Canada’s biggest companies:
There is no question that taxation can be effective in changing business and consumer decisions and behaviour. Environmental levies such as a carbon tax are transparent, making the price of emissions clear and consistent. They can encourage long-term investments in research and in capital equipment by establishing a known rate of return.
But Canadians must recognize that significant levels of taxation likely would be required to drive significant changes in behaviour.
We are not proposing a new tax. However, if any new environmental tax were to be proposed, it must be a substitute for existing forms of taxation, not a revenue grab. Any new tax in Canada must not discriminate against any particular sector or region, and should be implemented only as part of broader tax reform that aims to enhance our country’s economic as well as environmental performance.
This is especially important with respect to environmental taxation, since the burden of such taxes in most cases flows through to the individuals who ultimately use the energy or consume its resulting products. Simply adding to Canada’s tax burden under the guise of environmental responsibility is a recipe for both damaging the country’s economy and undermining public support for environmental goals.
And here’s what Matthew Bramley, director of the climate change program with the Pembina Institute, an advocacy group which has often been at odds with both Liberals and Conservatives, has to say about today’s claims:
Mr Harper and Mr Layton’s opposition to carbon taxes is contradicted by leading economics and business organizations who say taxing pollution is a good way to harness market forces to fight global warming. There is no evidence to support Mr Harper’s claim that a modest carbon tax would cause a recession. In fact, Mr Dion’s proposed tax would need to be further increased to enable Canada to meet science-based targets for greenhouse gas reductions.
Unchecked global warming will cause immense economic costs. Canadians expect a fact-based debate about not just the costs of acting but also the costs of failing to act and failing to repair Canada’s damaged reputation on this issue.”
One of the problems for Canadians, reporters, and experts like Jaccard and Bramley when it comes this debate about costs is that, so far, only the Liberals (much to the dismay of some of those very same Liberals) have actually spelled out how much more coal, diesel fuel and natural gas will cost. The Conservatives and the NDP admit that their regulatory approach to getting rid of greenhouse gas emissions involves some costs but, so far, we haven’t had a clear accounting from either party about what they might be.
Technorati Tags: greenhouse gas emissions, carbon tax
any, say newspaper, that would pay an esteemed prof for an analysis and estimation of the cost and benefits of the three plans?
I'm pretty sure that Jaccard, at least, and likely others are crunching the numbers as we speak. But, as I mentioned, it's difficult, because some parties have been less than forthcoming with their numbers.
This is why I find it so amusing when people accuse Dion's plan of being “complicated”. It's not complicated – it's specific. The idea itself is simple, but it also details exactly where the money will come from and where it will go to, down to the dollar, all out in the open for anyone to read.
But I guess math is hard. Better to be vague and simplistic.
Maybe one way to find out if a carbon tax is workable in Canada is to find out what is REALLY going on elsewhere, with some hard facts, not the usual vague mantra that goes something like “it's being done elsewhere, so it must be OK. After all we don't want to be laggards …”
Also it must be kept in mind that our land mass is about three times that of the EU ((9 984 670 km2 versus 3'930'000 km2) AND that the European Union (at 25 members) had 148 nuclear power plants which provide 31% of its electricity requirements. France alone generates almost half (45%) of nuclear-generated electricity in the European Union with its 59 nuclear power plants, and 80% of its own domestic needs. (Those numbers were accurate when I first looked them up a few months ago)
Europe also has an extensive rail system, while we have allowed ours if not to decline at least to stagnate.
But read some of these articles to see if everyone's really sold on a carbon tax.
http://www.nytimes.com/2008/03/25/opinion/25prasad.html?_r=1&th&emc=th&oref=slogin
“EVERYONE seems to be talking about a carbon tax. It’s probably the most glamorous — and certainly the most unlikely — use of the tax code since Al Capone got hooked for tax evasion. …
But a carbon tax isn’t a new idea. Denmark, Finland, Norway and Sweden have had carbon taxes in place since the 1990s, but the tax has not led to large declines in emissions in most of these countries — in the case of Norway, emissions have actually increased by 43 percent per capita. An economist might say this is fine; as long as the cost of the environmental damage is being internalized, the tax is working — and emissions might have been even higher without the tax. But what environmentalist would be happy with a 43 percent increase in emissions?”
The article goes on to talk about Denmark's success. But Denmark is how big, compared to Canada?
http://en.wikipedia.org/wiki/List_of_countries_and_outlying_territories_by_total_area
Denmark ranks #133 to our #2 in surface area.
Size matters!
Also
http://www.dw-world.de/dw/article/0,2144,3012941,00.html
19.12.2007
“Germany has attacked European Commission proposals to cut car C02 emissions limits, saying they unfairly hit the country's auto industry. The measures are intended to curb global warming.”
http://www.aftenposten.no/english/local/article2157059.ece
“Just as Norwegian delegates to the UN's conference on climate change started heading home from Bali, came news that Norway's own carbon emissions rose 80 percent from 1990 to 2004. Statoil's refinery at Mongstad is the biggest contributor.”
http://www.theaustralian.news.com.au/story/0,25197,22910382-601,00.html
“As business and industry warn of catastrophic economic effects if the ambit claims of 25-40 per cent emission cuts by 2020 are adopted at the conference, Kevin Rudd and his Climate Change Minister Penny Wong have declared Australia will not budge until it knows the full cost of adopting any targets.”
See? It's not all peaches and cream.
I remember another crisis. In the 70s – high-cost fuel AND an impending cold age, we were told. Urea-formaldehyde was the solution. Insulate, home owners were urged. The government will help you with the insulation – with government grants, of course.
Then reports started circulating about toxicity due to the urea. Panic set in. Solution? Remove the urea. The government had to spend over 80 million $ to get some of that urea out of homes. Apparently some was never removed, and those house values went down.
Fortunately, we didn’t pay too much attention. We were too busy studying, earning a living – instead of worrying about THE PLANET! We didn’t go the urea route. So, no grant in, no grant out. We didn't cost the government much.
I'm too lazy to look for the links re: the information above.
So, let's see what else great green minds have in store for us.
All I know is that the “green” household cleaners on the market cost twice what regular cleaners cost.
And a bag of Old Dutch potato chips which used to go for $1.99 a few months ago today cost me $2.99.
Sorry David I wrote my comments in a hurry. Glad to hear Jaccard is based on the numbers provided. But of wondered if there was enough basic information in the NDP and CPC plans for someone like Jaccard or Jaccard himself to just model scenarios to model likely outcomes over time or the cost to achieve a certain outcome or unit of comparison.
Either way, thanks for the very solid reporting on this issue (and others). Well done!
David, thank you for including the link to our October 2007 Policy
Declaration. In that document, our members endorsed the use of price
signals — such as emissions trading and environmental taxation — to
achieve reductions in greenhouse gas emissions. The statement also noted
that there are advantages and disadvantages to both approaches.
I want to be clear that the CCCE has not said that any one party's
approach to this issue is the “best”. We are a strictly nonpartisan
organization. Our policy declaration was intended to sketch out the
broad outlines of a forward-thinking approach to dealing with climate
change. As we said at the time, “We remain open to any and all ideas
that would help Canada reduce GHG and other emissions while promoting
the innovation and investment that will drive superior economic as well
as environmental performance.”
Cheers,
Ross Laver
VP Policy & Communications
Canadian Council of Chief Executives
I have been reading everything I see on the Liberals plan as realistically there is a possibility of a Liberal election win and we could be facing this down the road. My approach has not been to view it globally but to see how it affects me. I did look at the website and according to their calculator I would get back in tax cuts $53 monthly. Energy costs would go up so my condo fees would increase. Gas, food, clothing costs etc would increase and would also create inflationary pressures. Interest rates would rise in response and with only a 2% increase my mortgage payments would increase $200 monthly. I could be looking at paying out another $200 to $300 monthly. I am only one person in this category of many yet no one seems to want to respond to our concerns. Any time the question has been asked the Liberals have tapped danced around it. I can only take that to mean that we are in the group that Don Drummond of TD said would be losers in this scheme.
“My approach has not been to view it globally but to see how it affects me. “
Well, that would be how we found ourselves in this mess in the first place, now wouldn't it?
I have no idea where you're getting the notion that interest rates would increase by 2% just from this (we're looking at inflation regardless), but even if they did, if your numbers are any indication it doesn't sound like that would be too much of a hardship for you.
Just out of curiosity, how well do you think you would do under Stephen Harper's plan? Or Jack Layton's? Or when oil hits $400 a barrel and we have no alternatives lined up?
Leaving aside the fact that you could not possibly know anything about whether or not it would be a hardship for me and you are being somewhat presumptious I will say that if I had to put out another $300 monthly in addition to my existing financial obligations I would have to sell my home. As to the question about the other plans the answer is no I don't know what impact they would have. However at this point I do know what damage the Liberal plan will do and I sincerely hope Canadians reject it out of hand.
Hi Cindy
with all due respect is there not a second aspect of analysis that you are not taking into account that is implicit of not explicit in the Libs Green Shift: that it is intent on changing consumption behaviour?
So, rather then go to the perhaps obvious, that all new costs are absorbed via a dramatic shift in any one area (i.e., sell your home), that you could absorb some of the new costs via consuming (in addition to any rise in income resulting from inflation or otherwise).