You’re Not Shifting My Green, Stéphane

It has been a long time between blog posts: a period in my life where my periodic depression once again got the better of me. Perhaps, however, this is a good thing: it has allowed the past few weeks, with the whole Bernier-Couillard nonsense, yet another abdication of responsibility in the voting on the final bills before the House this spring, and now the introduction of the Green Shift by the Liberals to pass without comment.

For none of them really required it, although all have received reams of commentary, and, indeed, when it comes to the Green Shift, I will enter the fray myself.

So, let’s begin at the beginning. Is the Green Shift necessary?

A societal change certainly is. It takes a particular kind of fool not to notice that, however measured, world oil production (supply) and world oil consumption (demand) teeter at a balancing point. Some believe that we have passed the point and are demanding more than the available supply, thus forcing weaker hands away from the purchasing table already. Others believe there is capacity waiting in the wings — that the Saudis can turn up the valves; that Iraq can be brought on stream quickly; etc. It’s important to note that oil isn’t a single commodity: sludge-filled oils such as Venezuela’s, the tar sands, or even what the Saudis put on the table last week require different kinds of refineries and more expense in converting them into useful products. A refinery meant for light sweet crude isn’t even given these feedstocks. Certainly the production balance is shifting to the residual sludge rather than the high quality, easy to refine product: a permanent shift, indeed, given what we know about residual deposits.

As the price rises, individual decision are made. Gas guzzlers are no longer used for daily driving; econoboxes are, instead. Or, where available and practical, transit becomes a daily option. Food choices change; so do vacation choices. In effect, the price mechanism alone is sufficient; it need not be “goosed into action” by governments.

Still, of course, there are still all those emissions. I have always supported the notion that air and water “consumption” needs to have a price: it is how pollution of the common asset is reduced (perhaps, with the appropriate incentives, nearly eliminated). Similarly, such prices — rather than treating our environment as a free good — act to create “market space” for new experiments in fuel production — something better than “food for ethanol”, which makes no sense either on a energy budget (energy in to energy potential created) or a food supply basis, one would hope. In other words, there is a reason to consider certain price mechanisms at work (and for the common assets these will probably take the form of taxes or regulations), whether one believes in the global warming theory as advanced by its supporters or not.

At this point, it becomes appropriate to ask what kind of strategy might make the most sense.

On this file the Conservative Government has been lamentably silent. Their original environmental focus on pollution was applaudable, but not followed up and that follow up communicated for understanding and acceptance. Oily the splotch and “screwing all Canadians” make for free media coverage but do nothing to advance an agenda. Here the Government is deficient; end of subject. (One could charitably hold, based on other actions, that the real position is that different provinces or regions will form their own styles of solution, suited to their own needs, in this regard, and certainly I do not think it makes sense to have both provincial and federal rules, regulations and taxes in this area, but the Prime Minister has not said this in so many words, either.)

Then there is the NDP approach, centred on cap-and-trade. Effectively, cap-and-trade systems propose to regulate the size of the market created by assigning a price to a “pollutant” — and then allow that market to arbitrate the price mechanism. (If you ever needed evidence that this issue does not turn on the old “left”/”right” categories used in the media still, this is a powerful inducement to change your mind.) The nice part of cap-and-trade is that the decision can be made in a rational fashion: to continue without a reinvestment to reduce emissions, you must ensure you have the capacity — which means paying for what was once free to you, and damaged goods to everyone. Or, you can reinvest, reduce your emissions, and benefit by the capacity you don’t have to purchase. (As an example at a personal level — and the proposed system is not a consumer-level system — for average driving distances each year, it takes more than five years to “pay for” the benefits of a hybrid vehicle in reduced fuel consumption (and emissions). If you drive less than the average, you might buy emission credits; if you drive more, the investment in the hybrid makes economic sense (since the emission credits required are reduced from the time of purchase and thus offset the higher cost of the hybrid).)

As an old Progressive Conservative, I am always on the lookout for any party speaking to those Red Tory values that are my core. The Greens come closest to this: they demonstrate, in general, quite good economic sense. Their Green Plan also has internal logic — and far less gerrymandering of the results. It is what it purports to be, and no more. I could probably extend myself to support it.

This brings us to the Liberal plan, which is, prima facie, unsupportable. It is a mish-mash of spending programmes masquerading as an environmental imperative. There is no revenue neutrality in diverting streams of funds coming in via the price put on carbon via taxation to new federal programmes, or expansions of same. Child care, for instance, has nothing to do with carbon reduction — in fact, it leads to more emissions, in that it helps maintain the two-income, two-car, suburban lifestyle a little longer.

Stéphane Dion’s plan is smoke and mirrors, one more turn of the big government crank. It is less effective than the Greens’ offering, less market-sensitive than the NDP’s. It slams itself down on provincial jurisdiction and proposes taxes on taxes every time the GST is collected. No thank you!

That this well-praised piece of tripe — loved by academics and media personalities alike — doesn’t even have any idea of what reduction targets might be expected for something that slams itself down as a permanent addition to the Canadian body politic, rides roughshod over our sovereign treaty commitments (China cannot easily be assessed for special carbon tariffs under the WTO regime, which we are both signatories to, for instance) and is, in effect, another wealth transfer scheme from the West to the East (this may be harsh, but it needs to be said), speaks volumes. It betrays the Liberal Party’s continuing view of what this country is, and their expectation that we will all just sit still and let “Big Daddy” tell us what to do.

I am no fan of the Campbell Government’s ill-thought-through carbon plans, but they are incremental in nature and can be changed. Dion’s plan is national social engineering, grandiose in conception, a blatant attempt to buy votes and a permanent degradation of the prospects of Canadians. No sensible person should give it — or the Liberals — the time of day, unless, of course, they do secretly want to be (in the words of Stephen Harper), “screwed”.

One final note: while heading out this morning I heard Bill Good’s rapid-fire phone-in on CKNW asking “if a federal election was held today, who would you vote for and why?”. (He asked this question last week for provincial politics, and got a decent split between the BC Liberals, BC NDP and BC Greens.) In the first 15 minutes of the call-in there were 20 callers — and 20 votes for “Conservative”. Not one caller mentioned the Green Shift; many mentioned their expectation that the Liberals, back in power, would steal (à la “sponsorship”) again. The first caller to offer a different opinion supported the NDP. Finally, as I was turning the car off, the first Liberal supporter showed up — and she didn’t mention the Green Shift, either. This is, of course, nowhere near scientific — but I find it interesting as a quick touchstone, given that the callers are all from the “ecotopian” Wet Coast, where greenish thinking is concentrated. Make of it what you will.

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2 responses to “You’re Not Shifting My Green, Stéphane

  1. “world oil production (supply) and world oil consumption (demand) teeter at a balancing point.”

    AM 980 today discussed that the world consumes 89 million barrels of oil a day, but produces only 87 million. Of course that number is staggering. Staggering.

    “Here the Government is deficient; end of subject. ”

    Hear, hear.

    “This brings us to the Liberal plan, which is, prima facie, unsupportable. It is a mish-mash of spending programmes masquerading as an environmental imperative.”

    Agreed. And this utter lie that it is anything otherwise is another reason the party is untrustworthy on every level.

  2. I am a strong supporter of consumption taxes, as opposed to income tax (which is just plainly wrong, unfair and unwarranted). This would have been Dion’s big chance to prove that he can think clearly. Alas, no such luck — even the Green Party’s plan is somewhat more reasonable, because under their plan, unlike Dion’s, Canadians would see a somewhat more substantial tax cut.

    I also commented on Garth Turner’s blog:

    I have always supported the idea of a carbon tax. Then again, I have also supported moving our tax system away from income to consumption taxes. It doesn’t matter whether you call it a carbon tax or whatever, but to ensure future prosperity, increased productivity and a better environment, we need to shift the focus on consumption and not on income.

    After all, taxing incomes is utterly unfair. Income is the fruit of a person’s labour and the government should not be entitled even to a penny of that. It is consumption that must be taxed — and hopefully, in the future, exclusively so.

    Mr. Dion squandered a major opportunity for tax reform. As I recently explained in an article I wrote, the carbon tax of $40 per tonne of emissions could be introduced immediately, rather than after 4 years, provided that the new system is accompanied by a shift to the flat tax proposed by the Canadian Taxpayers Federation: 15% on incomes below $80,000; 25% on incomes above $80,000. Plus, the first $20,000 should be tax-exempt (no one, particularly in our cities – Toronto, Calgary, Vancouver, Montréal, etc. – can make ends meet on $20,000).

    If Mr. Dion had sold his Green Shift in this manner, coupled with the above flat tax, believe me, voters would be knocking on Dion’s door right now, asking for a federal election so that they could give the Liberals a majority government.

    But, as is usual in politics, voters are fed half-baked ideas that usually end up costing taxpayers more than they were originally promised.

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