Iggy In Edmonton: Lets Get Out Of Asbestos Business

Warning! Hardly a sympathetic source, but assuming it isn't outright lies (and I would assume from my experience with the source that it isn't), very interesting:

Liberal leader Michael Ignatieff is in Edmonton for a few days and last night he held a little town hall style gathering where he took questions from the audience. I would put the crowd at about 450, which is larger than Stephane Dion's numbers last July, and has to be considered a good turnout for an Alberta event.

And here, I think, is something genuinely newsworthy:

Question #11 Asbestos. While in the past Ignatieff has flip flopped on asbestos, tonight there was to be no beating around the bush on this one as Ignatieff answered by saying that "Canada has to be out of the asbestos business. We should not export it and we should not produce it".

And on a carbon tax:

Question #3 was on a carbon tax from someone familiar with Ignatieff's history on the idea. Ignatieff hinted that while he still liked the idea of a carbon tax, the political reality of such a tax makes it impossible to implement in a poor economy. He never ruled it out completely say if the economy improves, but votes ("practical politics") seem to be more important than the environment right now for the LPC.

Iggy Dumps Carbon Tax

This doesn't surprise me. While considered the most efficient means of tackling the AGW by economists, the last election proved it (at least in the flawed version offered by Dion) too damn easy to demagogue. And after that miserable experience, the idea is going to be dead in the Canadian federal context for awhile now.

Expect a version of a C&T system to appear in Iggy's policy manual sometime soon. Iggy:

'We want to do the right thing environmentally but this isn't working for us, think again'," he said.

"And I'm saying to you, we need to think again. You can't lead this country unless you listen, and we're listening."

You know he's been humping this line for several months now. Can we move past the thinking and listening stage to floating an idea or two?

Requiem For A Green Plan: The Green Shift As Policy

Up front, lets admit that the skeptics were right; no matter what its advantages as policy, the Green Shift was a tax shift, and a tax shift contains the word "tax", and as such the whole idea was not saleable to too large a proportion of the Canadian electorate.

(As an aside, note that in the post above Kinsella writes:

Sifting through the entrails leaked out to the media, was I wrong to oppose a carbon tax right now? No way. I'm for punishing polluters, not consumers. Cap-and-trade; not this.


Warren knows that's all bullshit. You raise prices on polluters and they raise prices on the consumer that purchases their polluting service. Same person pays in the end. A C&T system is just a slightly more dishonest way of going about the process.

But whatever.)


And lets admit up front that the Tories quite thoroughly mis-represented the GS .


Lets just consider it as policy.

As policy (and I say this as someone who loyally supported the GS while occasionally bringing up caveats), it was flawed in several respects.

For example, the idea that the GS was a wealth redistribution scheme contained an element of truth. Don't ask me; just ask (now ex-) Liberal MP Ken Boshcoff, who wrote that:


The Liberal Party’s Green Shift announced on June 19th marked the most aggressive anti-poverty program in 40 years. The ‘shift’ will transfer wealth from rich to poor, from the oil patch to the rest of the country, and from the coffers of big business to the pockets of low-income Canadians.

Now, Mr. Boshcoff didn't come out and actually say that the GS would send Alberta money East, but we all know where the "oil patch" is, don't we?

And as much I wouldn't mind seeing Alberta screwed out of its oily dough, for other reasons it always bothered me that the GS was not a purely environmental initiative. Environmental concerns were being used as an excuse to scare up funds for the broader Liberal platform, about which I personally had far more ambiguous feelings. I mean, my days as a compassionate Lefty are way past gone. I am far more worried these days about saving the bunnies than helping single-moms or the homeless. And I don't care who knows it. Animals are innocent; people are assholes. But whatever.


Similarly, it bothered me that the only sense in which the GS was "revenue neutral" was in the broader metaphoric sense, in that the Government would spend 1$ for each dollar the GS collected.

And the last thing that bothered me was the general laziness with which the plan was introduced. For example, I cheered when, in September, Dion tweaked the GS so as to assuage certain rural concerns over fuel, heating and other costs. But the fact (and I think Paul Wells pointed this out somewhere) that a Carbon Tax would effect certain regions of Canada more than others should have been obvious at the outset. Anyone with a slightest knowledge of the issue should have realized this. So the Dion Liberals offered a hugely complex green plan without having thought it all though, that none of their MPs ever really understood or could explain in detail, and then they went and changed it. The whole thing would have been a bit more bullet proof if these attempts at amelioration had been in the original version.

Personally, I was reminded of the whole Dion/Suzuki thing, where Dion, before he became Lib Leader even, produced a green policy document that contained cut-and-paste material from "The Air We Breathe" put out by the David Suzuki Foundation. For the Libs Enviro Guy, Dion has been pretty sloppy about assembling and presenting his whole political/environmental philosophy.

In any case, I wouldn't want to over-accentuate the negative. In fact the GS, if fully implemented by a Dion government, would have had minuscule negative economic effects. And, in fact, a Cap and Trade system simply = a Carbon tax with twice the bureaucracy. But, beyond the Tory disinformation campaign, there were plenty of aspects of the GS that lent themselves to legitimate criticism. I don't know if it is entirely impossible to run on a tax, but the Libs made it particularly difficult to run on this one.

High Gas Prices As A Natural Carbon Tax, Part III

Miles driven (U.S. figures) continue to decline in April. Can't blame the decline on lousy weather anymore, either.

Surrender, Mclelland.

Kinsella On Board?

"It doesn't look like a total disaster."

About as close as a thumbs up as we're likely to get from Canada's 2nd grumpiest blogger (this guy being number one). I am reminded of Lou Grant's famous "It doesn't stink." from the Mary Tyler Moore Show. Considering the source, high praise indeed.

High Gas Prices As Natural Carbon Tax, Part II

Ottawa, ON – As the price of gas continues to rise across the country with seemingly no end in sight, a new Ipsos Reid poll conducted on behalf of Global National and CanWest News Service reveals that Canadians have already started to change their commuting habits as a result. With Canadians who commute averaging about 18 km each way to work, most of them driving (74%), they appear to be feeling the pain at the pumps.

[...]

Those Who Commute are Walking More (37%), Using More Gas-Efficient Cars (31%), Carpooling (24%), Working More Often From Home (14%) or Moving Closer to Work (9%)

I refute thee, Mclelland; THUS I refute thee.

Make The Carbon Tax Revenue Negative?

An interesting idea from Andrew Coyne:

It might have been better, indeed, to have talked up the income tax cuts first — to present the plan as an income tax cut, financed by an environmental levy, rather than as a 'revenue neutral' carbon tax. Some such shift in emphasis is still possible, simply by front-loading the income tax cuts — that is, by making the package 'revenue negative' in the early years. It is sensible policy to start with a very low rate of carbon tax, giving consumers and industry time to adjust to the much higher rates they will know are coming in the long run. At the same time, there is probably more room in the budget than the Tories are letting on to cut income taxes.

Well, starting with low rates may result in leaving them low forever, as it would mean summoning a another act of political Will to raise them. But what about this:

Dion's promise is that, if the average Canadian is going to pay an extra $1,000 to for example heat their home, they will get $1,000 in income tax cuts. Why not have the tax shift kick in immediately after the income tax cheques have been delivered for the year in question? So Canadians face the shift with money in hand, as it were?

In any case, a good read from the Conservative Guy that Knows Math.

Only A Party With Money To Burn

...could afford a stunt like this. Not sure how well it will work, myself. Lorrie Goldstein thinks it shows a certain amount of fear on the Tories part:

Clearly, they're worried Dion's carbon tax, whenever he releases it, could appeal to voters concerned about global warming, particularly if the Liberal announcement is backed by environmentalists, economists and business groups stressing it will be effective and "revenue neutral," a claim the Tories mock. You don't put this much effort into attacking someone you don't think is a threat.

But whatever. Ads right at gas pumps. Gangs of young Tories at petrol stations, engaged in guerrilla marketing. (Careful with that. Motorists with a dark sense of humour might just hose 'em down with gasoline and torch 'em for kicks. Not me, obviously.) Is the fact that the website goes out of its way to reference Jason Cherniak personally a sign of the Harper governments all seeing, all knowing nature, or a sign of the fact that they are spending zillions on something really "inside baseball" in nature, and therefore just...don't...get...it?

Hansen On A Carbon Tax

James Hansen is the world's best-known climatologist. Lately, he has been making some attempts at policy prescription, and his latest effort looks a bit like what Dion's tax shifting plan might look like if the details of it are ever released. Hansen calls his scheme
"Carbon Tax and 100% Dividend":

“Carbon tax and 100% dividend” is spurred by the recent “carbon cap” discussion of Peter Barnes and others. Principles must be crystal clear and adhered to rigorously. A tax on coal, oil and gas is simple. It can be collected at the first point of sale within the country or at the last (e.g., at the gas pump), but it can be collected easily and reliably. You cannot hide coal in your purse; it travels in railroad cars that are easy to spot. “Cap”, in addition, is a euphemism that may do as much harm as good. The public is not stupid.

The entire carbon tax should be returned to the public, with a monthly deposit to their bank accounts, an equal share to each person (if no bank account provided, an annual check – social security number must be provided). No bureaucracy is needed to figure
this out. If the initial carbon tax averages $1200 per person per year, $100 is deposited in each account each month (Detail: perhaps limit to four shares per family, with child shares being half-size, i.e., no marriage penalty but do not encourage population growth).

William M. Connolley (Stoat) questions the proposals underlying simplicity:

So what in the crystal-clear principles allows you to decide if it should be limited to n shares per person? And looking harder, what allows you to decide it should be an equal share per person? Is it only the lack of any other method of division?

and much back and forth takes place in the comments. Apparently, the Swedes have a carbon tax that gets returned to you in the form of income tax cuts.

Note: I'm not expressing too much in the way of opinion in these carbon tax vs. cap-and-trade posts because I don't have particularly strong opinions either way. One point that Dion has made, and that Hansen makes in the above, is that a Carbon tax is far easier to implement than a cap-and-trade market.

PS. Peter Barnes is this guy.

PPS. McLelland is a fierce advocate of Cap and Trade. His arguments are not without weight.

Canadians and Carbon Taxes

Consider the source, obviously--the Pembina Insitute has an agenda. Nevertheless, this poll confirms what most polls have been showing over the past couple of years:

Canadians are warming up to the prospect of paying an environmental tax on activities that cause climate change, but they don't necessarily expect to get the money back in the form of income tax cuts...

Steve ("the poll guy") V. at Far and Wide has been writing extensively about how Dion's environmental proposals might play out in the political arena. Read this post especially, in which he makes a case that the fact that opinion seems to be swinging the Libs way at the moment is all part of some brilliant strategy. I myself think its just good luck (and esp. some bad moves by Jack Layton), but admittedly the result is the same.

Not that things might not change. Paying a tax in the abstract is always easier than paying it in the real world.

Economist Weighs In On Dion's Environmental "Plan", Slams Harper, Slowly Debones Layton

Probably best not to call it a "tax", though not really a plan yet, either, just the shadow of one. But whatever. Stephen Gordon is a professor of economics at l'Université Laval in Quebec City, Canada. Its all a good read, but he is especially cutting with respect to Jack Layton's reaction.

On Jack's support of "cap-and-trade" over a carbon tax:

As far as the consumer is concerned, cap-and-trade will have exactly the same effect as a carbon tax, namely, to increase prices. The only potential difference is who is on the receiving end of that extra spending: with a carbon tax, the government gets the money, and with cap-and-trade, that money is rent for those who own the permits. If the permits are auctioned off by the government, the two programs are essentially equivalent.

How true, how true.

On Jack's claim that "big corporations" should bear the lion's share of Canada's climate-change tab, and that there should be a federal ombudsman should ensure those costs aren't passed on to consumers.

Could someone please explain to Jack Layton that corporations don't pay taxes? Only people pay taxes, and corporations are not people. And the people who pay corporate taxes are not the owners of the corporation, either: the people who really pay those taxes are workers (in the form of reduced employment opportunities) and consumers (in the form of higher prices).

The Liberals and Conservatives understand this point. The CPC is targeting the people who don't want to pay those costs, and Stéphane Dion is going after those who do. The NDP's niche appears to be voters who want someone else to pay the costs of reducing greenhouse gas emissions.

Also true, but I think Jack Layton does understand this. He also understands that a federal ombudsman can only ensure that costs are not passed on to consumers is if he has secret magical powers. Jack is simply pandering to the common sentiment: Don't tax me, don't tax thee, tax the man behind the tree.

By the way, Mr. Gordon's blog title, "Worthwhile Canadian Initiative", is considered by some to be the "most boring headline that could possibly be imagined". Quite clever, in this context.

Kinsella Vs. The Scientist

Kinsella's recent post on Dion's carbon tax proposal has made more than a few waves. You can find it here. I thought I would juxtapose it with an analysis by Canadian climate scientist Simon Donner (click on link for the entire piece):

Is there a better time to redirect federal tax code to stress fuels, rather than income? The signals are all pointing in that direction. Cars are outselling trucks and SUVs for the first time in years. Goldman Sachs reported this week that oil could reach $150 to $200 a barrel. Public transit usage is on the rise. A carbon tax on transportation and heating fuels would only further nudge our economy towards higher energy efficiency and lower per capita greenhouse gas emissions. Most importantly, even if 100% revenue neutral the tax will allow the government the political room to direct revenues to programs to further invest in energy efficiency, renewable energy and new technologies.

As for the politics: evidence from the US primaries, where Hillary Clinton's obvious pandering over a gas tax holiday appears to have sunk what was left of her presidential campaign, [suggests] that people do appreciate honest on the complex issues of today. Dion is in the strange position of being seen by Canadians as "weak, uninspiring and unintelligible" but still more likable than PM Stephen Harper. Voters across the spectrum might just respect Dion more for making seemingly risky and groundbreaking political move of pushing for a carbon tax.

I can't say that reading Warren's piece didn't stoke some doubts in me. His profession, after all, is political strategy, so if he says an idea is crap you have to give the opinion some weight. But I wonder if he isn't working from a political play book that's a few years out of date. For example, I don't believe for one minute that talking environmental issues tags you as an lefty urbanite. We can all see what's happening to our arctic, and I think Canadians are beginning to understand this as a security issue (maybe our most important security issue), not just a matter of saving a few cute polar bears.

Furthermore, I rather think the cry of "too complex for the Canadian people" lets people like Warren off the hook as strategists. If a political party is developing an agricultural policy, for example, everyone involved in the production of that policy (from wonks to communicators) is expected to know enough about it to push the policy and counter the attacks. AGW as a political issue, though, is genuinely new, and I have a feeling alot of the resistance to the Carbon Tax proposal is about teaching old dogs new tricks. Its, like, another thing to learn... Well, tough nuts. From this day forward political types are going to have to start boning up on Carbon Markets and cloud feedbacks, and will be expected to know as much about that as they do about the history of The Wheat Board (or whatever). Simply accepting the Tory political spin that this will drive up fuel prices, as Warren does in spite of the fact that all Dion's pronouncements on the matter have made clear that the tax will not apply to gasoline, doesn't cut it. Its lazy. Its giving up before the fight has begun.

And just to rephrase Mr. Donner's last bit: we've got all sorts of people within the Liberal Party (Warren among them) saying "The party can't run away forever! Let's got to an election campaign!", but without really say much about what the Libs positive platform is supposed to be. Now that some (fairly bold) policy is starting to emerge, they're running away from the policy! Well, what then is the policy to be? We'll bring gas prices down? Nobody will believe that, and it can't be done! Or how about promising daycare for all? But, how many times have they done that already?

Carbon Tax Smokes Out NDP

"“We don't see putting a charge on the backs of individual Canadians through taxes as the way to go” sounds more like a quote from John Williamson than from Jack Layton. But that was the message from the NDP leader last week - one he's followed up with this almost McTeagueian campaign against high gas prices at the pumps.

The NDP is not about to jump in bed with the Canadian Taxpayers Federation, at least not on a regular basis. But having apparently decided there's not enough to be gained from a fight with both the Liberals and the Greens for environmental votes, Layton is shifting toward a populism aimed at a different corner of the electorate."

As Radwinski suggests, the NDP seems willing to abandon its "urban activists" to reconnect with its lower income "roots".

Jerking around 1/2 of its base, in other words. Good luck with that.

Richard Tol Changes Tune, Talks Carbon Tax

Economist Richard Tol is often quoted with approval in climate skeptic circles, and indeed he has employed some rather questionable methods to argue that, among other things, Global Warming will make Canada a vacation hot-spot. To which one can only respond: dude, if someplace like Winnipeg warms to the level characteristic of an “optimal holiday destination”, it still won't lure the tourists, it will just make the flies and mosquitoes bigger.

However, Mr. Tol seems to have had a change of heart, especially with respect to the Stern Review, which he once described as "alarmist and incompetent". In "On Setting Near-term Policy while the Dust Begins to Settle", he states that

"The major messages of the Review’s assessment of the current science are sound."

And:

A persuasive case can be made that climate risks are real and increasingly threatening. If follows that some sort of policy will be required, and the least cost approach necessarily involves starting now.

Further, the most efficacious means of meeting the climate change threat is a carbon tax designed to make lower or near zero carbon technologies more attractive than, for example, coal:

...a tax, increasing at the rate of interest a la Hotelling, would produce a persistent and predictable increase in the cost of using carbon that would inspire cost-reducing innovation and fuel switching in the transportation, building, and energy supply sectors of our economy.6 If carbon were taxed at the point it entered an economy (a couple thousand sources for the United States as opposed to millions of end-users), then it would be dispersed appropriately throughout the economy with relative prices of thousands of goods changing in proportion to the underlying carbon intensities. Moreover, it would generate revenue. The $15 per ton of carbon dioxide tax noted above would, for example, generate something like $90 billion in tax revenue in the United States in 2007 if it were paid on every ton of carbon embodied in every unit of fossil fuel consumed. This is revenue that could be used to offset the regressive nature of the carbon tax itself, by underwriting tax credits for citizens with taxable incomes below a specified level. The substitution effect would still apply, of course, so carbon conservation could be expected even from the beneficiaries of the credits. Tax revenue could also be used to reduce other distortionary taxes. It could even be used to fund research into alternative energy sources.

And if Mr. Tol can change his mind, so can I. Richard, I once described your hair as "freakish". I was wrong. It is not freakish, but magnificent. In fact, given the utter paucity of hair among the skeptic crowd, I am surprised that they didn't make you their king. So let the freak flags fly!

In fact, an even weirder thing is that the paper quoted above is slated to appear in E&E. Could it be that they're having a change of heart similar to Richard's over at the Denialist house organ? Naw. That would be too much to hope for.

Quebec Leads The Way

Quebec's 0.8 cent per litre carbon tax will be going into effect within hours. It is the first of its kind in Canada, and here's hoping it goes off smoothly. One thing. The article suggests that:

It's also not clear if the carbon tax will be passed to consumers.

"It's a $150 million question," said Montreuil of the Canadian Petroleum Products Institute, vice-president of the organization in Eastern Canada.

"And the honest answer is no one knows," he said.

I think that, frankly, everyone knows. Of course it will be passed on. That doesn't mean the tax is not a good thing. It just means that, when trying to change human behavior, the tax code can be a bit of a blunt instrument.

More On McKitrick's T3 Tax

From David Reevely's (of the Ottawa Citizen) Ecolibertarian blog, further critical comments of McKitrick's version of a Carbon Tax. He too is concerned with the lag-time between emissions cuts and an end to the warming phenomenon:

Superficially, McKitrick’s proposal to tie the carbon-tax rate to observed warming is his idea’s best characteristic. Immediate feedback, adjusting to on-the-ground (or in-the-air) realities, and so on. The trouble is the extremely long lag that the overwhelming bulk of the world’s scientists believe exists between the emission of greenhouse gases and their effect (which is cumulative) on the amount of heat they cause the earth’s atmosphere to retain.

If we stopped all human greenhouse-gas emissions right now, the IPCC figures the earth would warm by another 1.1 degrees over the next century or so. That’s a timescale McKitrick’s proposed monitor-and-adjust carbon-tax system can’t cope with. Worst of all, because the T3 tax only responds to damage that’s already happened, it has little preventive effect.

In fairness, he does have a partial response to that in his FP piece:

Under the T3 tax, investors planning major industrial projects will need to forecast the tax rate many years ahead, thereby taking into account the most likely path of global warming a decade or more in advance.

And best of all, the T3 tax will encourage private-sector climate forecasting. Firms will need good estimates of future tax rates, which will force them to look deeply, and objectively, into the question of whether existing climate forecasts have an alarmist bias. The financial incentives will lead to independent reassessments of global climate modelling, without regard to what politicians, the IPCC or climatology professors want to hear.

Yyyyyyee-esssss, but that also encourages gaming the system, encourages blowing out extra carbon now while it’s cheaper to do so (creating a whole new tragedy-of-the-commons problem), and puts individual consumers, on whom any reasonable response to climate-change concerns primarily depends, at a distinct disadvantage in planning ahead.

In addition, there are other reasons to be cutting C02 emissions beyond mitigating the effects of AGW. For example, C02 increases Ocean Acidification. Insofar as the T3 tax might go down at some point because warming has slowed or reversed, and therefore encourage emissions increases, it will do nothing to solve this particular problem.

Stephen Harper Readies His Carbon Tax

Apparently, Harper will be revealing his national emissions targets on Thursday, March 29th. From Claudia Cattaneoin in today's Fin. Post:

Word in the oilpatch is that Ottawa's plan will be tougher than Alberta's, but not as stringent as the Kyoto Protocol on climate change.

Translation: Canada's oil-and-gas sector will have to pay up to meet Alberta's new regulations, and pay up even more to meet Ottawa's.

(Under Alberta's greenhouse gas regulations, announced this month, the 100 facilities that account for about 70% of the province's total emissions are required to cut emissions intensity by 12%, starting July 1, or about six months earlier than expected. Large emitters have the option of making operating improvements, buying an Alberta-based offset or contributing to a new fund that will invest in technology to reduce emissions.)

While Ottawa's plan is not expected to kick in until 2010, the two sets of regulations are likely to stack up on top of each other.

Ignore the woe-is-the-oilpatch tone and contemplate the political implications. Though the Harper plan will fall short dreadfully, it will be the same in kind as Dion's initiative. That is, it will be very difficult to tar the Liberal plan as being radical. Everybody is offering up some kind of a carbon tax, or at least something that can be interpreted as a carbon tax! The difference will be merely in the stringency of the various regulatory regimes, and the Liberal message should therefore be: Harper's plan is SOFT on Polluters, whereas Dion gets TOUGH with those who would use out skies as a garbage dump.

That's an easy battle to fight.

Everyone's Proposing A Carbon Tax

In mid Blo-vate, Sun columnist Neil Waugh notes this morning that Stephane Dion's recently announced "carbon budget" is:

... basically the same deal Alberta Premier Ed Stelmach will impose on what he calls the province's "specified gas emitters" starting July 1. They will have to reduce their "emissions intensity" by 12% or start paying a $15-a-tonne carbon tax into a technology fund.

So if the Dion plan is a carbon tax, which Waugh insists it is, then the Alberta plan is a carbon tax, and Ka Ching Ka Ching, Dion has political cover. Because, just as you can't be holier than the Pope, you can't be more Conservative than Alberta. So if a carbon tax is okay with Alberta, then Conservatives elsewhere in Canada should be prepared to eat a carbon tax. It will be very difficult to tar Dion's proposals as radical (although no doubt many will try).

And guess what? Environment Minister John Baird has been making Kyoto-like noises recently! We're apparently not pulling out of the treaty! We will "honour" our responsibilities! And now Canadian companies may be able to meet their targets through foreign investment, a la something like Kyoto's Clean Development Mechanism (CDM). Furthermore, while there is no word yet on how Baird will enforce his "mandatory" emissions targets for industry, unless he intends to rely on harsh language, you can bet it will be through some scheme very much like Alberta's. So the Federal government will, over the next couple of weeks, propose a carbon tax.

Whoo hoo, baby, the Socialist in my heart is dancing naked through the streets!

But here's the thing. If everybody is going to be proposing a carbon tax, what's the difference between the various plans? Well, Dion is proposing hard, absolute emissions caps. After burnishing his law and order credentials, he is now getting TOUGH on polluters. Meanwhile, Harper's intensity caps, which will kick in a few decades down the road sometime, has gone SOFT on the people who are murdering our planet!

Not bad positioning, should an election be called in the next couple of weeks.