heureusement, ici, c'est james

A "carbon market" sure does sound attractive, doesn't it? It sounds democratic and anti-interventionist. But because this plan - yes, the same one championed by the NDP - includes a government auction scheme, it will in fact mean more government intervention and a larger government bureaucracy.

Rather than simply measuring and taxing carbon output, in a market scheme, the government will not only have to measure and, for all intents and purposes, "tax" the output, but it will also be required to create a bureau that will auction off the credits and then verify that companies have in fact used the credits appropriately. This is a very government-heavy project.

It will likely function as poorly as the government-managed market has in the EU, where huge loopholes have essentially enabled large companies to use the credits as subsidies, with no measurable gains for the environment.

CARBON TAXES

On the other hand, "Denmark, which brought in a carbon tax in the 1990s, reduced its greenhouse gas emissions dramatically, and its economy grew faster than Canada’s."

This might come as a shock to those of us who seem inclined to believe that the tar sands have all but BECOME the Canadian economy, but we're way behind here - economically and environmentally - and we will continue to be for as long as we think that expensive oil will grease rather than grind down our economy. From a recent editorial in the Halifax Chronicle Herald:

"As long as we can run our cars on cheap gasoline and generate electricity with cheap coal, it is not economical to develop greener sources of energy.

When prices go up, the market seeks alternatives. According to a recent survey of the state of the world’s energy economy in the Economist, there is every reason to believe that the market will find alternatives.

Rich, smart innovators from the dot-com world are putting their brains and money into the energy market — billions in private research money. Google, for instance, is investing heavily in a project to develop green energy that will be cheaper to produce than dirty old coal.

Wind power, which used to be expensive, is already as cheap as electricity generated by natural gas, and it has the promise to be even more useful, if electricity grids are managed more intelligently. The price of solar power is coming down, although it is not yet practical on a large scale. Both geothermal and tidal power have great potential.

In Scandinavia, governments committed to reducing emissions in the 1990s. With wind power, energy-efficient buildings and community heating plants that run on waste wood or straw, communities there have radically reduced their energy consumption without ruining their standard of living.

In Canada, the government wasted money with popular but useless incentive programs and advertising campaigns, and our emissions steadily rose, driven by SUVs and the filthy oilsands."

In Japan, they're so far ahead that they're already installing solar panels ON WINDOWS to generate power (see pic below)!

We know we have to put a price on carbon. But if we want to put a price on carbon in the quickest, most effective way, we will select a carbon tax option.

Labels: carbon taxes, economy, environment, global warming, mass consumption, NDP

"It is widely conceded that Stéphane Dion is taking a major risk trying to sell a carbon tax when gasoline prices are climbing," says Susan Riley; says just about every rep of every media outlet in the country.

A major risk. When prices are climbing.

What are we waiting for exactly? A price freefall? Ten cents a litre? The glory days of cheap, drinkable petroleum? Get over it, folks. This is about as low as oil's ever going to get, and that's precisely the problem.

From this week's article in The Independent:

The world uses about 87 million barrels of oil a day, about a quarter of it in the US. Saudi Arabia is the only country thought to have the capacity to pump oil faster. Meanwhile, China is in the throes of an industrial revolution that demands ever greater supplies of crude, yet global production has stagnated for two years. The Saudi government rejected a recent appeal from Mr Bush to increase production, saying there were no oil shortages at present. Economists worry, though, that shortages are around the corner, as mature oilfields wind down.

The Paris-based International Energy Agency (IEA) said yesterday that it might have overestimated the capacity of oil-producing nations to open new fields to keep up with growing demand over the next decade. Global production, which the IEA previously reckoned could reach 116 million barrels a day by 2030, might not even make 100 million.

If supply/demand are that out-of-balance today, there will never be a more opportune time to discourage the use of dirty energy and encourage alternatives. This is it.

Not only is carbon dirty, it's also inducing price increases and rampant inflation. Merrill Lynch economists wrote in a note to clients that,

"for the first time in our memory, inflation, not growth, is the primary macro driver at the global level. The inflation shock has already happened. What matters now is how persistent it is, and how markets and policy-makers react. At a global level, this begs for an accident that will awaken markets and policy makers to the risks."

The contrast in Canada couldn't be more poignant. We have a PM that ignores the aforementioned risks and calls cheap oil an economic "fundamental" that benefits the country, while Dion, May and to some extent Layton each express how critical a carbon price is to sound economic stewardship.

Environmentally, Elizabeth May has called the carbon tax a "litmus test" for whether parties are serious about the environment. She's added her voice to a chorus of others, including David Suzuki and throngs of economists around the world that applaud the scheme. Moreover, "Thomas d'Aquino, president of the Canadian Council of Chief Executives, has said that Canada's provincial and territorial leaders should commit to a coordinated nationwide strategy to address the risks of climate change, and supports a carbon tax. Jack Mintz, economist and former head of the C.D. Howe Institute, also supports a carbon tax."

Jack Layton proposes a model on the plagued European cap-and-trade system while Natural Resources Minister Gary Lunn says, and I quote, "The leader of the Liberal party wants to propose a carbon tax on the price of gasoline and drive the price of gasoline north of $2.25 and higher, that is going to hurt hardworking people who are trying to get to work."

Hardworking workers trying to get to work to work for a living might also want to leave their children with a planet. (Perpetuating this kind of laughable hyperbole will enable every reasonably-minded Canadian with a half-decent bullshit detector to see how thoroughly engaged our government is in divisive, small-minded politicking of the worst kind.)

Like Layton, Dion also suggested a cap-and-trade system during his leadership bid, and my sense is that he realizes that the time necessary to implement and refine such a system has all but slipped away. There is room to apply and tweak the measure in a limited way, but the fact that a carbon tax can be implemented immediately cuts to the heart of the issue. Liberal MP David McGuinty says,

"There's no choice anymore. If Mr. Dion was a spineless person who understood the climate change crisis, the severity of it, the speed with which this is actually increasing—which is what the science is telling us—if he wanted to play politics with this, he'd do nothing, which is exactly what the government is doing. Mr. Dion, in fairness has taken a big step and he has ignited a debate in Canadian society that is actually taking hold, and so this is the time because we're facing a climate change crisis. That's why this is important to do it now."

My fear is that Canadians either don't sense the danger, or are too skeptical of the Liberal brand, or both. Frankly, we don't have a choice. Layton and May are not going to lead governing parties in the next election, and "playing" politics with this issue isn't an option.

Labels: carbon taxes, economy, Stephane Dion

The day will come when oil will hit US $100/barrel and we won't be willing to fill our cars with gas or fly or... wait a sec -

- hey, guess what? The theory that paying more for carbon will make use use less of it has already been tested. And it's failed.

Tick. Tock.

Think about it. We've already faced a huge increase in the amount we pay for carbon, and it hasn't made much difference, has it?

I won't belabour this - our short term options are limited and the cap-and-trade system still has a few kinks to work out. But if oil and coal are among the most profitable industries in the world, how would a tax prevent the carbon industry from simply paying more for the right to pollute?

It wouldn't. Not unless taxes were so high as to discourage business altogether. Not bloody likely. We'd need one shocker of a price signal to stop consuming carbon. Wouldn't it be great if we one day opted for a built-in economic mechanism that actually makes it impossible to choke the planet?

Meanwhile, I should add, we get this quote from a NASA ice sheet researcher: "things are definitely far more serious than anyone would have thought five years ago."

Labels: carbon taxes, global warming