Explaining the “Green Shift”

Ontario employment lawyer Paul McKeever attempts to demystify the Liberal proposed “Green Shift” carbon tax proposal.

McKeever concludes that “Either it’s not green, or it does not involve a shift. In other words: either it will not reduce CO2 emissions, or it will be a tax grab.” He suggests the latter, calling it not only a “bad plan” but a “very dangerous one.”

It would be interesting to hear the responses of those Libs who enthusiastically support this plan.


15 Replies to “Explaining the “Green Shift””

  1. Ontario employment lawyer Paul McKeever and leader of the Freedom Party. Freedom from what? From taxes. It’s a capitalis/ anti-tax party. Harris’ Common Sense revolution was too far to the centre for him so he created his own party.

    I’d critique the critique, but I can’t play youtube at work (not with sound at least). And at home I’m on dial-up… so I’ll leave it to someone else.

  2. Ya, and I suppose increased taxes on smokes didn’t result in people cutting down or quitting altogether.

    What a WANKER!

  3. Well, I found a small summary on his website.

    (His breakdown on McCain and Obama is very funny in ways that he probably never intended it to be.)

    “This Liberal Green Shift carbon tax is a dangerous idea”, says McKeever. “It threatens to put a lot of people out of work. This tax takes dead aim at the fuel that is the lifeblood of Canadian industry: the fuel that powers our industrial machinery and the trucks that transport Canadian-made goods. It will also make it harder for us to afford to heat our homes, to fill our gas tanks, to fly for business or pleasure, and even to run the barbeque. Green might be a trendy word, but the green shift is economic suicide”.

    I have no idea if he has any points to back these accusations up because I haven’t seen the youtube clip.

    In rebut, a report was released by M.K. Jaccard and Associates for the Canadian government on the costs to the economy for a carbon tax.

    To quote the Green Party’s release: “[It]concludes that the GDP impact of a $50/tonne tax shift is less than 0.1% of GDP per year until 2010, is virtually zero during the next five years and is then positive after 2015.”

    Here’s the pdf of the report in question.

  4. I don’t like the Green Shift because it is an obvious example of an economic calculation problem – in a complex system you cannot predict the effect on prices of the policy. Businesses will pass on any increase in prices to the consumer. The consumer will end up paying more, but how much more, in what areas is hard (nearly impossible actually) to calculate. Because its nearly impossible to predict and calculate, it means the the idea that its “revenue neutral” rests on a false premise. Revenue neutral to the government? If prices go up, so does the amount collected via the GST and PST – does the plan take that into account when dishing out tax cuts? What of other tariffs and taxes?

    I think for the consumer, it will not be revenue neutral – people will pay higher prices for certain, but its unknown if they will pay less taxes to offset this (since its hard to predict).

    That being said, I agree that this video is more than a bit disingenuous considering who McKeever is. And he can talk shell games all he wants, but his explanation looks like a shell game itself. He also thinks economics is a zero-sum game.

    So while I don’t like the Green Shift, I don;t think this is a good way to debunk it. The biggest issue is really that its too complex a system with too simple an explanation to be trusted.

  5. I don’t like the Green Shift because it is an obvious example of an economic calculation problem – in a complex system you cannot predict the effect on prices of the policy.

    You can’t do that with any system, worst of all, one that is ordered (or unordered, actually) by laissez faire.

    The biggest issue is really that its too complex a system with too simple an explanation to be trusted.

    That’s the usual libertarian cant. Either the solutions proposed are too complex for the simplicity of the problem or the solutions are too simple for the complexity of the problem.

    What’s ends up being left out is the scientific analysis of the problem itself, and that’s where libertarians give up, since they don’t do science, preferring to quote instead other libertarians.

  6. Sorry, I only have a minute, so I’ll have to listen to the tape later. But it sounds like this is the usual mistake.

    1. Not all the money goes back to the people polluting (i.e. industry pays much more than they get back) but EVEN if this were the case, 2. applies. Since it is not, there are also incentives in that some of the money is targetted to specific green initiatives and you don’t get that money unless you satisfy the conditions.

    2. Part of the equation is introducing a carbon tax (the other part is cuts/credits/incentives elsewhere). For an industry this means the less they pollute, the less tax they pay. Industry is driven by a bottom line and will have an incentive to look for ways to pollute less in order to lower their costs and make more money.

    I’ll listen to the tape later, but I assume he doesn’t understand either 1 or 2, or both. Am I right?

  7. He’s an employment lawyer….hmmm.

    David McGuinty is an environmental lawyer. Actually, an environmental lawyer travels on the trains with my husband (commuter via VIA) and he is absolutely LIVID about Harper’s non-plan and likes the Green Shift. He told my husband that Layton’s plan – big corporation will channel it’s losses down to consumers.

  8. I’m super busy this morning and don’t have time to check, but didn’t the Fraser Institute issue a report on the environment a while back that was significantly at odds with Harper’s “plan” or is that just my imagination…?

  9. More CON Pretzel Logic

    Mayencourt’s Tax Stand Questioned

    Candidate for federal Conservatives supports Campbell’s carbon levy, but not Dion’s

    Jonathan Fowlie, Vancouver Sun

    Published: Monday, September 15, 2008

    VICTORIA — In switching from provincial to federal politics, Lorne Mayencourt has gone from a party that unapologetically embraces the idea of a carbon tax to one that vehemently opposes it.


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