Tag Archives: price on carbon

What They Knew Could Hurt Them

The line from the Conservatives is that taking enough action on the climate crisis to avert catastrophe would damage the economy (as if that’s a real choice). Then, two months ago, we found out that their own experts told them that the Green Party’s climate plan would have a negligible effect on the economy, and that they tried to keep that report secret. Today, we find out that their own experts were also telling them that their plan to reduce greenhouse gas emissions through tax rebates/feebates for new car purchases would be extremely inefficient with taxpayer dollars.

The Globe and Mail reports that a September 2006 report informed the government of the following:

The key findings from the working group are that the cost per tonne of GHGs reduced is high for all options; ranging from $150 per tonne for a permanent incentive that rewards very fuel-efficient vehicles without distinguishing between technology or class; to $2,350 per tonne, for example, for an incentive that differentiates between passenger vehicles and light trucks and expires after four years.

The second option–at a cost of $2,350 per tonne–is more or less what the government introduced in the last budget, and has since been a resounding failure. So, not only did they know that our plan (which, remember, is a tax shift of only $50 per tonne) would succeed in reducing emissions while not harming the economy, they also knew that their plan would be shockingly wasteful and produce mediocre results at best.

At first, I’m tempted to conclude that this government is trying to create economic damage with their climate inaction plan in order to prove themselves right, or even that they’re somewhat sociopathic. But then I’m reminded that I should never ascribe to malice that which can be explained by incompetence.

Steep carbon tax could actually stimulate economy: report

It’s not every day you read a glowing news report about the Green Party in the National Post, but we live in interesting times. The story in yesterday’s paper has the same headline as this blog entry, and begins as follows:

OTTAWA — It was denounced by Environment Minister John Baird as “the mother of all taxes,” but a new report for the federal government says a $50-per-tonne carbon tax to reduce greenhouse gas pollution would do little harm to the Canadian economy.

The study – titled “Cost Curves for Greenhouse Gas Emission Reduction in Canada: The Kyoto Period and Beyond” – was submitted to the government in January.

Green party Leader Elizabeth May said it proves the Conservatives knew the top experts were urging them to accept her proposal of a $50-per-tonne carbon tax as the most effective tool to fight global warming.

“The Canadian public can conclude that the Harper government is deliberately misleading them when they claim that a carbon tax does serious damage to the economy, because they know it’s not true,” May said at a news conference.

In an analysis of carbon taxes ranging from $10 per tonne up to $250 per tonne, the report, obtained by May through an Access to Information request, concluded that the $50-per-tonne carbon tax could even have a positive effect on the economy by 2015. The Green party has proposed a tax shift by transferring revenues from the new carbon tax to reductions in payroll taxes for companies and in income taxes for individuals.

Mark Jaccard, whose consulting firm produced the study and who has been recognized by senior government officials as “one of Canada’s top climate policy experts,” went on to say, “if we’re serious about reducing greenhouse gases, we have to have a carbon tax or its equivalent. So in fact, Elizabeth May is the only politician who’s being honest to Canadians right now.”

In summary, our government has had a report in their hands since January, from one of their own trusted experts, that says they’re wrong and we’re right. They tried to keep this report secret, and we only now know about it because Elizabeth May obtained it through the Access to Information Act.

They know it’s not true that action on climate change would cripple the economy. They know that a carbon tax is needed to avoid the worst effects of climate change. They know that the Green Party’s “tax shift” idea (reduce income and payroll taxes, add carbon and pollution taxes) could actually stimulate the economy.

Faced with those facts, they decided the best thing to do would be to try and keep this information from Canadians. Honestly, what kind of mind works like that?

Jeffrey Simpson: The Greens Are Right

In a column in today’s Globe and Mail entitled The Greens are right: Use economic clubs to battle climate change, Jeffry Simpson is largely positive about our recently released climate plan. He doesn’t agree with everything we proposed, but he likes the plan enough to write:

Good for Canada’s Green Party. Last week, the Greens issued a policy to combat climate change that was the most arresting and innovative in Canada

At the heart of the Greens’ climate-change policy is something as obvious as it is politically toxic: Economic tools are the best way to change behaviour. Subsidies and exhortation won’t cut it. Price changes and markets might, or will. So the Greens propose a carbon tax, at levels that would raise the cost of a litre of gasoline (and other carbon-emitting products) by 12 to 24 cents.

The Harper government, predictably, screamed “the mother of all tax increases,” forgetting the Greens also had suggested that the money raised from the carbon tax be offset by reductions in income and other taxes. The net tax effect would be neutral…

This is bold stuff, and better than anything on offer from the other political parties.

It’s heartening to get this kind of endorsement. Yet, just six months ago almost to the day, Simpson was referring to Green Party leaders as “eco-nuts.” I’m not sure where he meant for that comment to sit on the spectrum between disrespectful and playful. Regardless, his seeming change-of-heart surrounding our credibility reminds me of a story.

A few years ago I had the great fortune of spending several summers directing an outdoor skills leadership program for 15-year-olds. On the surface, we were teaching them what we called “hard skills,” like fire building, canoeing, navigation and cartography, first aid, etc. In reality, however, this was in many ways a pretense for teaching more broadly applicable life skills.

One of my favourite sessions we did with these campers went like this. We brought the group of 12 teens to a spot where one of our leaders, Bill, had laid out a long rope on the ground. In the middle, the rope loosely twisted and turned around on itself in all sorts of ways. Bill asked our campers a simple question: if we pull on either end of the rope, do you think it will form a knot in the middle, or will all of the twists and turns just slip over each other, leaving a straight rope with no knots?

Everyone was given a minute to examine the rope, without touching it, before making up their minds. Then, Bill asked us to spit into two groups. “If you think the rope will form a knot when we pull on both ends, stand on this side. If you don’t think it will form a knot, stand over here.” The group split in half almost perfectly.

“Ok,” explained Bill, “if you are absolutely sure that the rope will make a knot, I want you to go stand way over near this end of the rope. If you think it will probably make a knot but you’re less sure, stay on the same side, but don’t go as far. Same goes for the folks who are betting on there not being a knot.” Everyone was different degrees of “sure,” so they spread out in a line, parallel to the rope, so that the person who was most sure on the knot side was furthest from the person who was most sure on the not-knot side, with those who were less sure standing closer towards the middle.

“Now, Chris and I are going to start pulling on both ends of the rope. We’re going to do it slowly, until it either does or doesn’t form a knot. As we pull on the rope, I want you to move as your opinion changes. If you become more sure if your position, move further away from the middle. If you become less sure, move closer to the middle. If you change your mind completely, move to the other side.”

We started to pull the rope, and people started to move. This process lasted about fifteen seconds, and there was lots of back and forth. Eventually, all of the twists of the rope resolved themselves, no knot was formed, and Bill and I were left holding a straight rope between us. You’d think, then, at this point, that everyone would have ended up standing on the “no knot” side, since in the last few seconds it became very clear that a knot was not going to materialize. But that’s not what happened.

Why? Because the people who had decided they were 100% sure a knot was going to form had too far to walk. They couldn’t get to the other side in time. Some didn’t even try; they just stood at the other end of the room in disbelieve that they’d been proven wrong.

The moral of the exercise wasn’t, I don’t think, that we shouldn’t be sure about things, or take strong positions. But it’s important to recognize that, the more sure you are, the further you have to travel to get to the other side, and the harder it is to even see their perspective.

Again, I’m not sure how far along the other side of the “are the Greens credible?” rope Simpson was six months ago, but good on him for being open to movement. Maybe I should call up Bill and see if he’d be willing to do his rope activity for our Members of Parliament and other lifetime partisans. Couldn’t hurt.

Flying: Low Price, High Cost

Crossposted from Torontoist.

Reader Jonathan recently let us know about a trip he took to Ottawa and back via (cue dramatic music) Porter Airlines. That’s right, the airline of the infamous island airport.

It’s no secret that we have been less than enthusiastic about airport expansion, of which Porter Air’s operation has become the most prominent example. That being said, it’s worth noting that Jonathan’s review could not have been more glowing:

Wow! Flying is amazing! I think I might be spoiled forever…Just over two hours after I left my office, I was standing in Ottawa. To give that some context, I left work a little early and got to Ottawa before I normally get out of the office. Compare that with a train trip that takes over 4 hours for the trip alone! That two hours even includes 30 mins I had to kill in a nice lounge with free drinks and wifi.

Actually, we fully expect that his account is more or less typical, and we’ve heard similar stories from others. Not only that, but, as he points out, you would expect an experience so clearly superior to the train to cost way more, right? Not so! “The plane is just $41.70 more for a round-trip than the train,” Jonathan writes. “That’s less than $7 for every hour you save.”

So what’s the problem? If this is such a great service which is clearly filling a need (or, you know, at least the Western “I want it!” definition of need), how come so many people are getting so many bees in so many bonnets?

In fact, it comes down to that all-too-loaded word: cost. What we of course should have said is that Porter Air (and air travel in general) has a relatively low price. The cost, on the other hand, is both hidden and high.

These aren’t abstract, touchy-feely costs either. They’re real economic ones that we’ll all end up paying one way or another. The most blatant of these is the cost of climate change, which air travel contributes to much more than train travel, both because of the extra fuel/energy that’s needed to fly a plane, and also because of the high altitude at which those emissions are released. The Stern report (as everyone is hopefully tired of hearing about) pegged the real cost of not acting to reduce the severity of climate change (it’s already too late to stop it completely) at 3.68 trillion pounds. (Trillion! Pounds!) Stern, along with renowned author George Monbiot and the IPCC have also identified that, in order to avoid the worst of what climate change has to offer, we’ll need to make somewhere in the neighbourhood of 80% reductions in emissions below 1990 levels (that’s significant—always pay attention to the base year when people are talking about reductions) by the year 2050 at the latest (Monbiot suggests 2030).

Either we believe the science or we don’t. If we do, then we’ll quickly come to realize that there’s no room for flights of convenience in a world needing an 80% reduction in greenhouse gas emissions. (Note also the related but slightly different health and economic costs tied to air quality in Toronto.)

Does that make Jonathan, or others who fly Porter, bad people? We don’t think so. They’re simply making decisions that make sense for them, based on the information they’re presented with. That’s reasonable—that’s what we all do. And the most significant piece of information they have, in this case, is the artificially low price of the plane ticket, which hides its true, high cost. That’s why the idea of using the tax system to send the right price signals to the market is gaining in popularity. In other words, flying, which has a high cost once the externalities are factored in, should be significantly more expensive than taking the train. (This can be done in concert with reductions on other kinds of taxes, so that it’s revenue neutral and more politically palatable.)

In that scenario, individuals will be able to make informed decisions about whether or not they think flying is really worth it. If they do, then fine, but fewer people will. A level of personal freedom will be preserved, and emissions will also be reduced. Unfortunately, of course, this is one of those things that would have to be implemented provincially or federally. Until then, we’ll have to focus on the things that can be done municipally.