Carbon Tax?

[Edward Campbell]

A properly designed carbon tax – something Dion's bloody stupid Green Shaft Shift is not - would, indeed, add something to the costs of rural living, but since 100% of a properly designed carbon tax would be paid by carbon 'consumers' everywhere - including by those who buy food grown in rural areas, live in houses built from raw materials 'harvested' in rural areas, drive cars, wear clothes and heat their homes in winter - then the effect will be, broadly, a 'wash' compared with today.

Any tax which aims, as does Dion's monstrosity, to 'punish' one region while buying votes in another is poor bad public policy proposed by an inept, regional political party. 

 

[George Wallace]

Imposing a tax on carbon would make life more expensive for rural people, since their lifestyle is more carbon-intensive. My point is that governments should not try to subsidize the lifestyle and should instead let whatever natural migration occurs take place.

There is no particular benefit to having people live in the countryside rather than cities, so if we do eventually move toward "internalizing" the environmental cost of economic activities into their price, we should let the process take its course and let people deal with the new economic reality of more expensive life in rural areas.

I would really like to know where you are coming from.  Where are you getting the idea that the Carbon Footprint in the rural areas is so much larger than the urban areas, and that the rural areas are so much more subsidized than urban areas?  With the 'Almagamation' of municipal and rural areas in many of Canada's new mega cities, we find it is the rural dwellers who are loosing out, through higher taxes, and fewer services.  I would say that you don't have many of your facts correct.

I agree with the basic idea but think it would be better to simply tax dirty energy in the first place. In a related matter, I don't think it makes sense to tax SUVs instead of compact cars. Instead, it's much simpler to tax gasoline uniformly, since what matters is how much gas is consumed, not what type of car it's being consumed in.

I see from this, that you drive a SUV.  ;D

 

[Brad Sallows]

>Imposing a tax on carbon would make life more expensive for rural people, since their lifestyle is more carbon-intensive. My point is that governments should not try to subsidize the lifestyle and should instead let whatever natural migration occurs take place.

Without an actual assessment of everything that goes into supporting a rural family and everything that goes into supporting an urban family, it is pointless to assume one or the other is more greatly "subsidized".  It's a fact that there are many pickup trucks in rural areas, and the owners do drive them large distances.  However, it's a fact that in urban areas there are office and apartment towers that are heated and lit 24/7, people commute, the roads are clogged with delivery vehicles (my estimate is that the most common vehicle type on the roads is a white full-size van), there is a vast network of paved and concreted roadwork, some suburbs have homes over 4000 sq ft, there are many more public green spaces which require maintenance (fertilizer, fuels) etc, etc.  Do not make the mistake of merely measuring what people consume day-to-day.  All of the supporting infrastructure must be measured.

 

[GAP]

NDP has largest campaign carbon footprint: analyst
Updated Tue. Oct. 14 2008 10:32 AM ET CTV.ca News Staff
Article Link

The leaders of the three main political parties have each generated enough carbon emissions this election campaign to equal the output of 1,000 people driving their car for an entire year.

The David Suzuki Foundation monitored the carbon footprints of the party leaders throughout the campaign, based on where they went everyday and how they travelled.

"The three main leaders have travelled between 46,000 and 56,000 kilometres, and that's more than once around the world for each of them," Dale Marshall, a climate change policy analyst with the David Suzuki Foundation told CTV's Canada AM.

"We know the leaders criss-cross the country over the course of the campaign and even fly from one end of the country to the other in order to cover the ridings they want to be in, so it's no surprise really."

Green Party leader Elizabeth May travelled by train during the campaign, conducting an old fashioned whistle-stop tour that resulted in much lower carbon emissions than the other leaders.

"It really does highlight the big, big difference between travelling by train and travelling by plane, especially when it comes to short distances -- Ottawa to Montreal or Montreal to Toronto or Calgary to Edmonton," Marshall said.
More on link

 

[john10]

Yes a carbon tax will make life more expensive but it will do that for everyone.

If it's accompanied by income tax reductions, then relatively speaking, people who consume less carbon would find themselves richer.

I, like others disagree with your opinion that living in the country is more cabon-intensive. I know here in Sask, plenty of country people who embrace technology in order to not only supply their own power but also contribute power back to the grid which everyone can use. SaskPower has built roughly 100 massive wind turbines some of which are found on these country folk land. Others I know have installed such things as furnaces which burn low grade grain (which they grow themselves) or homes with sod insultation. I could go on.

I'll admit I don't have any concrete evidence that rural people consume more carbon than urban. I was mainly going by the fact that when the notion of a carbon tax was introduced, there was a lot of handwringing about how rural people would be disadvantaged because they emit more carbon. It makes sense though. People in rural areas don't have public transport and don't live in apartment buildings and so have higher heating costs.

This study by Brookings found that people who live in metro areas emit less. http://www.brookings.edu/reports/2008/05_carbon_footprint_sarzynski.aspx

You might want to go tell that to all the people living out there then. I am sure they could give you a few benefits. One thing I can think of is the number who use their land as a primary or secondary source of income. Such as food! Which if you ate food today I think you have an interest in. Unless of course you'd rather we import all our grains, fruits, vegtables and meats. We can let China produce it all for us, send it across the ocean on a big ship than truck it into the cities just so a few city folk don't get upset about a country family recieving a subsidy their family doesn't.

You make good points. If we did apply a carbon tax though, the environmental cost of shipping food from overseas would be built into the price of food. As I said, I don't see any benefits of having people living in rural areas versus urban areas that aren't already taken into account by the market.

 

[john10]

A properly designed carbon tax – something Dion's bloody stupid Green Shaft Shift is not - would, indeed, add something to the costs of rural living, but since 100% of a properly designed carbon tax would be paid by carbon 'consumers' everywhere - including by those who buy food grown in rural areas, live in houses built from raw materials 'harvested' in rural areas, drive cars, wear clothes and heat their homes in winter - then the effect will be, broadly, a 'wash' compared with today.

I'm not an expert by any means, but if the tax is imposed on companies, and they just pass it on to consumers, then isn't the effect basically the same?

 

[john10]

I would really like to know where you are coming from.  Where are you getting the idea that the Carbon Footprint in the rural areas is so much larger than the urban areas, and that the rural areas are so much more subsidized than urban areas?  With the 'Almagamation' of municipal and rural areas in many of Canada's new mega cities, we find it is the rural dwellers who are loosing out, through higher taxes, and fewer services.  I would say that you don't have many of your facts correct.

I'm not saying rural people are subsidized right now, I'm saying that in the eventuality that a carbon tax is imposed, I see no reason why they should be subsidized, since I expect the cost of rural living to go up. As I replied to the other fellow, I have no hard evidence, I was just going by the fact that there was a lot of complaining about a carbon tax being unfair to rural regions because they apparently emit more.

I see from this, that you drive a SUV.  ;D

Hehe, no just bicycle and metro for me.

 

[Edward Campbell]

I'm not an expert by any means, but if the tax is imposed on companies, and they just pass it on to consumers, then isn't the effect basically the same?

I’m not an tax expert either but the answer is: No, because the more competitive the market the more likely the producer is to ‘eat’ part of the tax in order to keep prices down. The tax needs to flow through the system so that the consumer always pays 100%.

Thus: the producers of shale oil should pay a tax on the carbon they use to extract/produce heavy crude – they add that tax to the price but, later, claim that tax back as a business cost or à la the GST, as a rebate (carbon taxes paid minus carbon taxes collected = rebate or amount owed). The purchaser of the heavy crude (a refinery) pays tax on all the carbon used to transport the heavy crude to the refinery and make it into consumer ready products – it is also added to the price (two tax ‘bites’ now) and then claimed back. The gas companies pay tax on the carbon they to move the crude to cities – once again added to the price (the third time a tax is added) and  these costs are claimed as legitimate business expenses or as a rebate. Next, the retailer pays taxes on the carbon used in delivery and in operating his gas station – taxes which he also adds to the price and then claims a rebate or a legitimate business expense. Finally, the consumer pays the taxes – all four – when (s)he fills the tank; but there are no rebates, unless (s)he is a business owner (Josephine the plumber, for example). If it’s just a Hockey Mom filling the mini-van then she pays all the taxes that have accumulated on the carbon she is going to use.

It cannot be exactly like the GST - which is a ‘level’ tax and, essentially, a value added tax - because, presumably, we will have complex calculations to set the carbon levels of e.g. coal, oil (light crude vs. heavy crude, too?), natural gas and so on.

It would be possible, but less desirable, from a tax policy POV to tax each ‘consumer’ (the extractor, refiner, deliverer and retailer) as distinct entities and require them to ‘eat’ the tax (not claim it back as an expense) but a ‘good’ consumption tax is both visible and discretionary. If the taxes are just factored into the price the end user/consumer does not know that (s)he is paying a tax on carbon use – (s)he does not know that her government has decided to tax carbon use. The idea of discretionary tax is that you can decide how much tax to pay by the ways you decide to do things. You can drive less, set the thermostat lower, and so on.

There are limits on how much discretion you have – the poor have fewer consumption choices than do the rich. Thus a consumption tax must be accompanied by a cut in income taxes – always bad things, anyway – to those with low(er) incomes.

Finally: To the degree that a carbon tax is also a green tax – one designed to change behaviours – then it makes no sense at all for anyone except the end user to pay all of the taxes. The behaviour of the producers is driven, totally, by the consumers. If the consumers do not feel all the pain of the tax then they will continue to demand more and more from the producers and the tax becomes useless as an environmental measure.

 

[Snafu-Bar]

Using taxes as a form of environmental reform is assinine to begin with. Tax is not going to curb pollution, LAWS and REGULATIONS will. Legislation mandating a clean production cycle of any consumables OR ELSE is the only way to get corporations to start looking after thier end of the shit stick for once. Levey them with stiff fines that go into a pollution fund to be used on environmental projects that NEED attention and money to fix. Thus when a polluter pollutes the money then comes in and goes out to where it really matters. Board rooms and investors may look at this as the wrong approach, but it's the bullseye approach, target the problem and deal with it appropriately. Enough pollution fines will put a sizable fund together to start throwing money at fixing headache pollution problems head on, using the money from the TOP not the bottom of the economic food chain, as it should be done.

Cheers.

 

[Edward Campbell]

But we Canadians do use taxes to try to minimize perfectly legal and proper behaviours that we believe to be harmful: the so called sin taxes on tobacco and alcohol are the primary examples.

Price/cost can be an incentive: adding a small charge for plastic bags, as is done in Ireland for example, did change the pattern of use.

Before the national authorities displayed their shocking lack of courage – of all types – and decided to allow aboriginals to flagrantly break the laws, the sin tax on tobacco was working – fewer children were smoking, year after year, because they could not afford the habit. Now the decline has been reversed in many regions because ”tax free” aboriginal cigarettes are readily available - because Canadian politicians are afraid to enforce our laws.

 

[Snafu-Bar]

Yes past mistakes are clearly present and steamrolling along unchecked. Taxes are a means to collect infrastructure cash and is usefull if implemented correctly and at proper rates. Taxing taxes and hidden fee's and tarrifs unloaded on consumers is more along the lines of the practices that need to be addressed. Sin taxes we're put in place to grab cash on people who wished to purchase items deemed luxuries back in the days of it's inception, then you add provincial grabs then the federal grabs. Taxing the end user for these items is fine and acceptable, taxing the taxes is NOT, that as far as i'm concerned is theft. Couple in income tax(a ww1 leftover) that was supposed to be "temporary" and you can see where this leads...right back to Ottawa and the gang of thieves and liars.

The people on top who make the calls on HOW companies operate and how they choose to deal with thier impact on the environment are the ones DIRECTLY responsible for end results of pollution, thus they should be the targets for any tax or penalties for causing pollution. Targeting the consumer for the brainwashed existences we have become dependant on is no longer of our making and has become our NEED. We NEED electricity, we NEED transportation, and we need to work to afford those items. Can we exist without leaving an impact on the environment, some may be able to, but the average person is not going to be able to "unplug" from the system we are stuck in without having the financial means to do so. Thus we are trapped into having no choice but play our parts in the mass quantities of living.

The carbon grab would generate a ton of money for Ottawa to spend on thier nice new holiday packages and hefty 30% pay raises for all thier "hard work" raping the populous of thier last pennies and driving the nation into a mass cash crunch is NOT the way to fix our habits. Fix the habits by elimination, eliminate tobacco PERIOD. If theres a crop of tobacco on the grow go in and do like they do to marijuana and dismantle it. No more tobacco growing means no more problem. Also means no more tax inflow. Stoppping things will have just as much negative impact as positive. Einstien knew his stuff well Stopping smoking will have positive health care impacts as well as environmental impacts from producing it to using it. The negative side is all financial, no crops for the farmer no production for the workers and no product to tax the bejesus out of.

So we are stuck in the loop of WTF do we do now scenario. Tax is here to stay, but ways of life come and go. Eliminate by innovation... evolution. Either way Ottawa will invent a pocket lint converter to make new crisp currency one way or another.

Cheers.

 

[Kirkhill]

But we Canadians do use taxes to try to minimize perfectly legal and proper behaviours that we believe to be harmful: the so called sin taxes on tobacco and alcohol are the primary examples.

Price/cost can be an incentive: adding a small charge for plastic bags, as is done in Ireland for example, did change the pattern of use.

Before the national authorities displayed their shocking lack of courage – of all types – and decided to allow aboriginals to flagrantly break the laws, the sin tax on tobacco was working – fewer children were smoking, year after year, because they could not afford the habit. Now the decline has been reversed in many regions because ”tax free” aboriginal cigarettes are readily available - because Canadian politicians are afraid to enforce our laws.

I wonder if Harper's recognition of the Quebecois as a nation can help him in that reqard.  He essentially "gave" the Quebecois what they wanted to hear, recognition, but in legal terms it means nothing.  Harper has said that he recognizes the concept of the nation.  He stipulates that nations (plural) exist within Canada.  But the Quebecois have no legal standing within Canada.  That is what caused Gilles et al to scream so loudly about.   "The Quebecois" is merely those citizens of the Province of Quebec that "feel" themselves to Quebecois.   Some of them may "feel" that other Quebecers are also Quebecois but many will feel that some that call themselves Quebecois are not sufficiently Pure Laine to justify the tag.  Consequently it is impossible to separate Quebecois from Quebecers form legal purposes so the laws that apply to one must apply to all.  And the laws that apply to all are the laws of Quebec and of Canada.

By extension, the First Nations, can now be politically recognized as nations without any legal requirement to recognize the Nations as legal entities except insofar as any treaties already exist.  That would mean that Canadian law would be enforceable on land occupied by natives.

The Iroquois are a special case by virtue of the geopolitical situation existing at the time of signing their treaties.  They have a legitimate, in my view, case to make that they are neither Canadians nor Americans because the treaties made with them were explicitly treaties between one national leader, King George III, and an equal.  The Americans did not recognize the Iroquois de jure but  British force majeure forced a de facto recognition.  In some senses the right solution for the Iroquois is for both countries to recognize a separate Iroquois state on their borders then put up passport controls and negotiate Iroquois access to US and Canadian markets.  With tariffs on cigarettes and all.

Digression - to perhaps be furthered on some of the Aboriginal threads.

Back to your discussion on Carbon and other Sin Taxes......I know you are being consistent on this one Edward but I am afraid that you and I don't see eye to eye on this one.  I neither accept the premises for a "Carbon" tax - that Carbon is destroying the planet and that humans are responsible nor do I accept that taxing energy consumption generally is beneficial.  Organisms and Organizations need Energy.  They will find it from whatever sources are available and scarcities will be addressed accordingly, prices will rise and efficiencies and alternatives will be found.

I have no problem regulating Cleanliness, Hygiene and even Order and merely stipulating thou shalt not discharge wantonly (I spent 5 years in London Pea Soupers that would make Beijing's smogs look like Prairie mists).  But let's not pretend that it is anything more than that. 

I especially don't like the idea of throttling the gas at the same time as we are trying to improve productivity so that 1 working adult can support 2 retirees and a child or two.  Increased productivity demands more energy.


PS (If water is a more potent greenhouse gas than CO2 then what will be the impact on the environment when we convert everything to hydrogen engines that continue to suck up oxygen but then convert it to water which plants can recycle to O2?  Do we get more clouds, less sun, more rain, fewer plants, more mud and less Oxygen?)

 

[Kat Stevens]

I live in a rural, agricultural area in Central Alberta.  Within a kilometre of my house, there are 24 residences and farm buildings.  Calculate the amount of carbon produced in my square kilometre, I would, but I'm lazy.  Now calculate the carbon barfed out by one square kilometre of the 401 on any given day.  Yup, cities are the way to go, carbon production wise...  :

 

[a_majoor]

Trying to wish away carbon with taxes, hydrogen or mythical "Green" technologies that the gods will deliver from Mount Olympus real soon now is about as practical as designing your household budget around winning the lottery.

Carbon and hydrocarbon fuels are high energy density fuels which are solid or liquid at sensible temperatures and are usable with a very wide array of technology, from steam engines to fuel cells. They are relatively non toxic (think about that next time you are at the self serve gas station), and require a minimum of special equipment to transport and store. Any real or proposed challenger needs to have most of these attributes, or it is doomed for niche status at best.

People and business modify their behaviours based on a complex array of variables, including price, availability, convenience and so on, so raising or lowering taxes based on carbon content might or might not work. Indeed, it might induce perverse outcomes, such as everyone switching to CNG (compressed natural gas) as transportation fuel, spiking prices for household consumers as the natural gas they demand for their heating and cooking gets diverted to the vehicle and electrical generation market looking to escape carbon taxes. Environmentalists might also contemplate the effects of giant coal gassification plants turning coal into Syngas will have on the landscape, water supply and electrical generating grid in the area...

We have already seen the effects of the market economy at work, as the massive spike in gasoline prices this summer essentially killed the market for large trucks, SUV's and luxury cars in one financial quarter (and probably dooming the "Big Three", but that is another story), and caused a vast reduction in crude oil use throughout the US economy (from trucking to airline flights). Market forces can drive the adoption of new hydrocarbon based power supplies which bypass the thermodynamic limits of heat engines (fuel cells may only be the first of these technologies), unless perverse government interventions divert resources away from these technologies to wherever the State provides a quick payoff (remember that Ethanol was supposed to be the answer; huge government subsidies resulted in a food crisis since the State was paying people to burn food!).

 

[GAP]

When all's said and done, the carbon tax is toast
JEFFREY SIMPSON jsimpson@globeandmail.com October 22, 2008
Article Link

The demise of Stéphane Dion has killed any national attempt to tax carbon-producing products. Even if such a tax were offset by lower personal and corporate taxes, Canadians apparently won't accept this way of tackling the challenge of greenhouse-gas emissions that warm the atmosphere.

In British Columbia, Premier Gordon Campbell's carbon tax, offset by lower taxes on incomes and companies, has sailed into strong political headwinds. "Axe the tax," cries the opposition NDP to a widening chorus of applause.

No matter that 230 economists, who usually cannot agree that today is Wednesday, signed a letter in the last week of the federal election campaign implicitly recommending a carbon tax. No matter that 120 of Canada's leading scientists wrote an open letter, too, urging immediate action.

Most Canadians apparently aren't interested in paying anything extra to reduce emissions. They want the cheapest possible prices for gasoline, heating oil, electricity and other forms of energy. They don't trust politicians to recycle the revenues from a carbon tax into lower personal and corporate income taxes.
More on link

 

[Brad Sallows]

>They don't trust politicians to recycle the revenues from a carbon tax into lower personal and corporate income taxes.

That's pretty much all of it right there.  The politicians and the people who use government spending as a tap have proven remarkably unable to discipline themselves.  Until I see tens of billions of dollars of evidence that they are serious about cutting inappropriate spending, they can talk to the hand.

 

[Edward Campbell]

I don't know if this will change any minds, but Hank Paulson, a pretty conservative guy, says that a carbon tax, properly applied, should be part of any sane conservative programme in this article which is reproduced under the Fair Dealing provisions of the Copyright Act from Business Insider:

http://www.businessinsider.com/hank-paulson-on-climate-change-2014-6

HANK PAULSON: Climate Change Risk Is The New Housing Bubble

Rob Wile

June 22, 2014

Few were more intimately involved with manging the financial crisis than Hank Paulson, President George W. Bush's treasury secretary.
In a new op-ed in the New York Times, Paulson says he's seeing the same stresses that nearly brought down the banking system, and which led to the Great Recession, are playing out in climate.

    Looking back at the dark days of the financial crisis in 2008, it is easy to see the similarities between the financial crisis and the climate challenge we now face.

    We are building up excesses (debt in 2008, greenhouse gas emissions that are trapping heat now). Our government policies are flawed (incentivizing us to borrow too much to finance homes then, and encouraging the overuse of carbon-based fuels now).
    Our experts (financial experts then, climate scientists now) try to understand what they see and to model possible futures. And the outsize risks have the potential to be tremendously damaging (to a globalized economy then,
    and the global climate now).

To start addressing the situation, Paulson calls for the creation of a carbon tax, which he argues is actually a "conservative" solution, since it allows market forces to put a price on allocating resources toward or away from addressing the problem. 

"A tax on carbon emissions will unleash a wave of innovation to develop technologies, lower the costs of clean energy and create jobs as we and other nations develop new energy products and infrastructure," he says. "This would strengthen national security by reducing the world’s dependence on governments like Russia and Iran.

Paulson acknowledges that the U.S. alone can't address the situation — but that no one else will be moved to do so if it doesn't take the lead. And he takes his own Republican Party to task for not taking the crisis seriously, saying that the short term economic consequences will be swamped by the long-term ones that would come from doing nothing and allowing the crisis to build.

"Republicans must not shrink from this issue," he writes. "Risk management is a conservative principle, as is preserving our natural environment for future generations. We are, after all, the party of Teddy Roosevelt."

This week, he says, the Risky Business project, a climate change-focused group Paulson co-created last fall with Michael Bloomberg and retired hedge fund manager Tom Steyer, will will put out a financial analysis on the costs of inaction across regions and economic sectors most imperiled.

I happen to agree with Hank Paulson on a number of levels. I think we do have an imbalance in energy use. Governments should be trying to encourage behaviors that make the most effective use of energy sources. We know, from our experiences with the so called sin taxes on tobacco and alcohol that taxes (cost) can be an incentive to change behavior ~ even if it is only to buy cigarettes smuggled in by First Nations rather than those produced by legitimate, tax paying corporations.

A carbon tax, a green tax can be implemented in a way that will, most likely, change behaviors and increase revenues. (To those who say that we don't need more revenue I say a) see the defence budget and think again, or b) fine, then lower income taxes by similar amounts, especially for lower income Canadians.)

A sensible, conservative carbon tax would look  very, very much like the HST: it would be transferred, 100% to the end user, you and me, and paid every time we fill the gas tank, turn on the air conditioner or the big screen TV set. Carbon producers and transporters would be credited with their shares, in and out, as they are now with the HST. But the trucks and trains that move e.g. milk and lettuce from farms to grocery stores would pay and they would add that cost to their prices.


Edited to add: Here is a link to Hank Paulson's opinion piece in the New York Times, Sunday Review that provoked the article above. Elsewhere, in the NYT Paul Krugman suggests that Paulson is preaching to a very, very small choir of conservatives who are still sane.

 

[GAP]

A carbon tax would end up just being another money grab....look at lottery revenues....governments are now dependant on it as a revenue stream.

The idea is laudable, the execution, not so much....

 

[Edward Campbell]

A carbon tax would end up just being another money grab....look at lottery revenues....governments are now dependant on it as a revenue stream.

The idea is laudable, the execution, not so much....

All taxes are "money grabs," but they are part of the social contract that allows us to live as we do.

In a perfect world we would pay one general tax that would fund a (statutory/constitutionally defined) very limited series of functions - including the national defence. Everything not on that short list - health care, highways, education, and, and, and ... - would be funded by highly focused taxes and user fees, each tied to a programme and each growing (or, in theory, declining) as needs grow (or decline, in theory).

A green tax (a carbon tax paid 100% by end users) would fund all environmental projects and programmes.

 

[Rocky Mountains]

Don't we already have a fairly substantial carbon tax?  Fuels already have a reasonably high gas taxes.  Just quadruple these and put an equivalent tax on coal.  Simple because maybe 10 companies produce 98% of coal.  Domestic problem solved.

Exports - sounds simple but we would end up hiring thousands of bureaucrats who would reasonably in theory,  but in practice, arbitrarily, pick apart every import from every country for its carbon based energy component.

The beauty of it is that oil or coal exports would not be taxed and we could tax the average carbon component of Chinese industrial production.  The one thing hard for the voters to stomach is that it should be on home heating or effectiveness is shot.