Taxing Carbon: Some Initial Thoughts

Campaigns of Hope & Fear

Aside from posting on some of the more frivolous aspects of the Liberals’ proposed “Green Shift” (not to be confused with eco-friendly urinal cakes, napkins and disposable coffee cups bearing the same trademarked name), I haven’t really delved into this pivotal issue to date, but now that I’ve finally gotten around to reading through the plan in its entirety, I’d like to explore it in some more detail over the coming weeks.

In following the “debate” since the plan’s release, I have to say that I’ve found the largely uninformed, knee-jerk reactions of “Conservative” politicians and supporters to be both needlessly alarmist and deeply pessimistic. And at the risk of vastly oversimplifying the matter, to a certain extent it doesn’t seem entirely unfair to regard the contrasting views of Stéphane Dion and Stephen Harper about the issue as those of “hope” and “fear” respectively.

Conservatives would have us believe that a carbon tax is nothing more than a nefarious “trick” that will, as Stephen Harper put it so eloquently back in June, “screw everybody” (especially those in “the West”), but to me, the reasons why this is automatically assumed to be the case seem founded more on an irrational paranoia and a deep-seated distrust of government rather than being based on any empirical evidence or sound economic principles. Quite to the contrary, most economists agree (in itself a somewhat unusual occurrence) that taxing carbon is a sensible idea and some, such as Don Drummond, the chief economist of the TD Bank Financial Group, have even described the Liberals’ carbon tax plan as “a good start” that will, at least in his estimation, leave the general Canadian taxpayer “better off.”

Of course, it would be entirely foolish to blindly place bets on the side of “hope” without failing to mention that the Liberals haven’t always been noted for their sound management of complex government programs in the past. One only has to look back to monumental boondoggles like the scandalous waste associated with the Human Resources Development grants program or the long gun registry to see how badly things can go wrong in this regard. While those are certainly more than fair enough points to raise by way of objection to the Liberals’ “Green Shift” proposal, I want to leave that aspect aside — at least for the time being — and focus instead quite strictly on the principle of the matter.

So, if you have any ideas on how you’d like to see this discussion run, I’d be more than open to suggestions. By way of full disclosure, I may be participating in a conference call with Dion about this issue in the coming weeks, so what transpires here will likely help to inform my questions about the program and its implementation in the rather unlikely event of a future Liberal government.

36 Replies to “Taxing Carbon: Some Initial Thoughts”

  1. So, if you have any ideas on how you’d like to see this discussion run, I’d be more than open to suggestions

    Why do these “schemes” always focus on moving money around , instead of actually reducing emissions ?

  2. Well done RT. You have me thinking.

    Boondoggle should be addressed quickly.

    It will be legislated that Fraser’s office be mandated to oversee the neutrality of the tax.

    That’s part of the plan that has been overlooked.

    I’ll be back, but thanks for starting this.

  3. It will be legislated that Fraser’s office be mandated to oversee the neutrality of the tax.

    There is only one revenue neutral tax ……. none .

  4. Bill — I like the fact that you use the term “scheme” which is the expression they commonly refer to such comprehensive government “plans” in Australia and England. It has such a negative connotation here however…

    Anyway, good question, but I’d suggest one that’s fundamentally flawed. After all, isn’t the brief of governments when it comes to just about everything that affects our daily lives, a matter of “moving money around” as you put it? In the “carrots and sticks” world of incentives and penalties that influence behaviour of the “free market” your expression could be equally applied to the monetarist, neo-liberal theories that Harper subscribes to.

  5. This sounds interesting Red. I don’t have anything to suggest right now, but I’ll look forward to the discussion.

    Off-topic: A came across this interesting documentary on Stanley Kubrick and his obsession with perfection that I thought you might like.

  6. Dion’s shift, smacks more of Kyoto Lite Canadian Style than anything else . The oil producing provinces being annex 1 countries , all other provinces being annex 2’s . As with Kyoto , Dion asks us to “trust me ” when it comes to hard targets , sorry , no . Same goes for any other party promising the same .

  7. Bill — I think it’s a mistake to view this primarily as an emission-reducing, environmental initiative per se in the same way as the Kyoto Protocol, but that could just be my take on it. (Just for the record, I’m not a supporter of the Kyoto treaty for various reasons.) I see it more as a required first step towards development of the next generation of more sustainable forms of energy.

  8. When did Kyoto have anything to do with emission-reduction ?

    I see it more as a required first step towards development of the next generation of more sustainable forms of energy.

    Why no R&D $$$$$$ ?

  9. Correction: Carbon producing provinces.

    Enlighten me . I was not aware there are provinces that do not produce carbon emissions .

  10. Ti-Guy — Thanks for the link. I’ll check that out later tonight. I’ve got a deep and abiding sympathy with Kubrick’s anally-retentive perfectionism and have always subscribed to Wilde’s notion that great things can be revealed from the smallest of details, so it promises to be highly pleasurable viewing.

  11. Bill — You asked “When did Kyoto have anything to do with emission-reduction ?” Are you serious? This framework was the whole point of Kyoto.

  12. Enlighten me . I was not aware there are provinces that do not produce carbon emissions .

    That’s correct. There aren’t any.

  13. This framework was the whole point of Kyoto.

    Disagree….. see China . Kyoto is about paying someone-else for the right to pollute at will . Reducing emissions have not , nor will ever be , the goal of Kyoto . As a society , we consume . To grow our society (economy) , we will consume more . Kyoto boils down to ” what’s it worth ?… and to who ?” .

  14. Reducing emissions have not , nor will ever be , the goal of Kyoto

    I look forward to a discussion absent absolute and unscientific assertions such as this.

  15. Bill — I’ve heard that argument hundreds of times over, but it’s silly. Are you suggesting that nothing should be done because China is effectively calling the shots? How pathetic is that?

    And it’s also beside the point. My contention is that taxing carbon is simply a necessary first step in a wider and more comprehensive process.

  16. I look forward to a discussion absent absolute and unscientific assertions such as this.

    Fine and well , explain China being annex 2 . For the real laffs to begin , why don’t we wait until the Olympics are over to see just how “scientific ” Kyoto is ? My guess goes as follows ……. the Minister of Air Quality has apparently died suddenly of severe lead poisoning …. right in the forehead … , any takers ?

  17. How about we get you colouring book and sit you down at the little table with some chocolate milk and cookies?

  18. Are you suggesting that nothing should be done because China is effectively calling the shots?

    You agree China is calling the shots ?

    O/T Preview , please ?

  19. Please , beer and popcorn .

    Sorry, the baby bonus doesn’t even cover an evening of beer and popcorn.

  20. Sorry, the baby bonus doesn’t even cover an evening of beer and popcorn.

    True , kind of like Kyoto , metaphorically …….. on a global scale .

  21. Yes, yes… preview. I’ll try getting around to that some time this month. Funny, but Greg and the boys over at The Politic haven’t solved the problem yet despite numerous complaints over the years, nor has Stephen Taylor on any of his cookie-cutter BT blogs. But we’ll see what can be done because, you know us EVIL “liberals”… we’re all about finding solutions to problems.

  22. Because of the importance of the issue, it would be nice to have a mature discussion on it instead of this Con nonsense from the likes of Bill D Cat.

    Are they capable of serious, intelligent discussion?

    I’m looking forward to your review and thoughts on it.

  23. Well Bill D Cat send the bonus back and start looking for Liberal handouts which are not there.The picture of the kid says it all Red.Liberals do what they want because they want to.You have to add without thinking,which is the part that worries Canadians.

  24. For what it’s worth – T. Boone Pickens is on Larry King Live tonight. Now, you’d think these neo-cons would listen to a Texas oil billionaire who sees the writing on the wall and is going to get ahead of us on the oil/climate change issue – this guy knows how to make money.

  25. Whoops, meant to mention, as you are probably aware, T. Boone Pickens is a “staunch” conservative/republican – which makes it all the more interesting.

  26. focus instead quite strictly on the principle of the matter.
    One of the problems is that it will/is too easy to pick up a rhetoric that resonates with voters that will make the Green Shift plan seem like a tax grab on the poor and middle class. I’m not going to debate if it is or not(I think that it will be).

    The Green Shift will be perceived as forced social engineering.
    In the global scheme of things, many have already or have been forced to change habits. From taking less vacations, renovating their houses to better insulate, reduced the water they use, recycled (sometimes forced at the municipal level), some have changed jobs or changed cars – and yet the middle class has not seen the benefits from their efforts.

    In the uncertain economic climate, it is folly to ask that Canadian subscribe to the Green Shift. While Mr. Dion may try to sell it as a tax shift, I don’t think that many Canadian have benefited from other tax reductions in tangible ways.

  27. I see it more as a required first step towards development of the next generation of more sustainable forms of energy.
    In Quebec, there is a carbon tax – what companies have done is increase their prices and sometimes even increased profit margins. The government has basically that they have no mechanism to prevent this. I don’t think that Dion will be putting into place a watchdog agency.
    Further, watching the gross net profits of certain energy companies, it is rather amusing to think that consumers will be asked to dig a little deeper….

  28. Yes, Toujoutdan, here in Canada we talk about what it will cost to change our polluting ways and how much that change will effect our consumer based lifestyle. Also when it come to taking steps to unify the world on climate change efforts, all we here is that other countries like China and India have to pay before we pay, not recognizing that it has been North America and Europe that have done most of the damage to the world thus far, but hey who cares that was then and this is now, right. Canada used to be a leader and regardless that the Liberals did not achieve the results they had set out to achieve, at least they made an attempt. The current con government has gone from one argument to another, first they didn’t really believe the science in the whole global warming theory, then they wanted to wait until all the scientific studies were in, then they wanted to wait until the rest of the world does there share, and now they want to force the oil companies to work towards finding different methods and technologies that the government will subsidize the oil companies for??? Canada needs to change this government in order to accomplish anything on a global scale, the Americans realize this necessary change, so why can’t Canadians! Lets stop talking about the extra five to ten bucks it will cost to gas up and lets start talking about how much it will cost to gas up ten and twenty years from now. Lets stop talking about shifting taxes to help one group while another more fortunate group has to pay, WE ARE CANADIANS AND WE HELP EACH OTHER! Lets stop the stupid attack ads that say this person is that or is not this, lets debate the issues responsibly and like adults to resolve the problems. Lets stop the trickery in Ottawa and lets get to bottom of the important issues, without getting a report with multiple pages inked out (the income trust & Afghanistan detainees). The “Green Shift Plan” is an important first step to getting some real results and everyone knows it, however the cons are trying to confuse the issues and cover the facts with lies. Let us also vote for change here in Canada!

  29. Ruralsandi says…
    “Are they capable of serious, intelligent discussion?”

    No, because if they tried they would have to concede they have nothing and The Green Shift would actually work. Thats why they stall action, and dostort the facts. They have nothing of their own to put forward that would work.

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