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Friday, November 04, 2005

Ottawa Has It ALL Wrong on Kyoto

I am not persuaded that global warming exists (though I expect it does) nor that it is caused by burning carbon-based fuels (though I suspect it is, in part), nor that it will become a problem (but I realize it might); for more on these issues, let me recommend Taken by Storm, by Chris Essex and Ross McKitrick, available here.

But if Canada is going to honour its commitments under the Kyoto Accord to reduce carbon emissions, it is going about it the wrong way. See this in the Globe & Mail (reg. req'd, though it is an old link and may have expired) for a summary of Ottawa's proposals. The gubmnt is proposing tax credits and subsidies for those who use and develop energy-efficient technologies.

Ottawa is considering a five-year package of more than $2.4-billion in carrot-like tax incentives and subsidies as a means of convincing business and consumers to curb Canada's output of greenhouse gases under the Kyoto accord, documents obtained by The Globe and Mail indicate.

This is another example of gubmnt intervention and risk of taxpayer money that is backwards. It presumes that politicians can pick the winners better than individuals risking their own money in the market can. It also builds and feeds a bureaucracy that is unnecessary.

My proposal is to tax the snot out of carbon-based fuels and let the market react by developing, producing, and adopting more fuel-efficient technologies and products. It would be considerably more efficient than trying to pick winners and subsidizing some firms in some alternative-energy industries.

And to all those who claim they need special help or tax breaks, I reply: if burning carbon-based fuel is indeed bad for the environment, then you are not covering the full costs of doing so unless you pay this tax.

Posted by EclectEcon on November 4, 2005 | Permalink

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Comments

You been reading the Green Party platform? Sure taxing the hell out of carbon based fuel (oil and gas etc) would probably spur private sector alternatives, however it would also cause a massive economic recession.

Lets say you triple the cost of gas: farmers will have to charge more for their produce meaning the cost of food goes up. The price of products in stores will go up due to higher transportation costs. Many businesses will no longer be profitable because of higher overhead leading to layoffs and bankruptcies. Inflation will rise, interest rates will go up.

Those who can afford it will purchase new alternative fuel vehicles; those who cant (middle class and lower) will have to stick to gasoline meaning the poorest in our country, the same people who will be affected the most by the higher inflation, unemployment and interest, would get hurt even more.

This is why leftist interventionist ideas don't work. These ideas always turn around and harm those that need the most help.

Better to just let the free market adjust slowly over time and produce these alternatives naturaly.

Posted by: Cool Blue | 2005-11-04 5:11:09 AM


A huge tax on energy would cause massive inflation which would ruin the economy and erode the nation's liquid wealth.

A small increase in taxes combined with across the board tax incentives for clean technology would be better. You wouldn't need any bureaucracy to administer it. It would just go through the tax system.

This is all besides the point though because if Canada's economy contracted to zero, it wouldn't make a bit of difference in emissions. Only if you get India, China, Europe, Brazil, and the US all on board will you make a difference - and there's no evidence that kyoto would make any difference even if you got the whole plannet to agree.

China alone is a filth pit of more than just greenhouse gasses. The air is toxic in most places.

Kyoto is dead. The Liberals will promise to impliment it for the next 40 years and not lift a finger to do anything (except to use it as an excuse to slide money over to their friends.)

Posted by: Warwick | 2005-11-04 7:15:39 AM


Kyoto - backdoor NEP

Posted by: AsISeeIt | 2005-11-04 7:28:03 AM


Oh they have it absolutely right on Kyoto...from their own perspective. They have ensured that no one they care about or need - Ontario - is affected by it. The burden has been placed on to Alberta, where the Liberal/NDP Party has almost no support.

Since they have nothing to lose, it is understandable that they're pushing forward. In fact, it's being cited as one of Chretien's accomplishment, along with opposing the Iraq War and preserving National Unity (despite the fact that Kyoto is undermining the latter).

Good politics, if you're a fascist state. Alberta secedes.

Posted by: Scott | 2005-11-04 7:36:09 AM


If we are going to start taxing to replace the unaccounted-for externalities, the list is long, and it _doesn't_ start at fossil fuels. There are already huge taxes on fossil fuels, from the royalties to the provinces, to the taxes on the pipelines, the refineries, and at the pump at burner tip, and the income taxes paid by the workers. More in Europe, less in the US and Canada, but still huge.
It is not the fault of fossil fuels that the taxes generated by the sale and use of fossil fuel does _not_ go to mitigate whatever harm is done by fossil fuel. Those dollars dissapear into the giant undifferentiated pot called 'general revenue' where they spent on everything from health care for widowsandorphans to fountains in Shawinigan.
These externalities are present but unaccounted for in almost everything we buy, and I (biased me) wold say that the largest gap is in our daily bread.

Posted by: JM | 2005-11-04 8:30:57 AM


If we are going to start taxing to replace the unaccounted-for externalities, the list is long, and it _doesn't_ start at fossil fuels. There are already huge taxes on fossil fuels, from the royalties to the provinces, to the taxes on the pipelines, the refineries, and at the pump at burner tip, and the income taxes paid by the workers. More in Europe, less in the US and Canada, but still huge.
It is not the fault of fossil fuels that the taxes generated by the sale and use of fossil fuel does _not_ go to mitigate whatever harm is done by fossil fuel. Those dollars dissapear into the giant undifferentiated pot called 'general revenue' where they spent on everything from health care for widowsandorphans to fountains in Shawinigan.
These externalities are present but unaccounted for in almost everything we buy, and I (biased me) wold say that the largest gap is in our daily bread.

Posted by: JM | 2005-11-04 8:34:25 AM


Apart from needing NO new taxes of any kind have you considered that the energy efficient technologies developement aspect might be a long, long, long way off in the future?

Just because you put up a $gazillion to advance a certain goal doesn't make the attainment of that goal possible when the difficulties the engineers face are non-trivial.

Liberal grants for R&D in Canada have been studiously neglected. This is a well worn hobby horse of Paul Wells.

Now the corrupt NDP/Liberals are supposed to be trusted with a new tax Smash and Grab of Alberta's petro dollars to spur R&D? They'll just dump the money into general revenues like all targeted taxes,(eg. gas tax) or use it to increase Quebec's level of transfer payments to bribe Quebecer's support for Canada.

All this presupposes the notion that there really is global warming, that global warming is unnatural, that global warming is a bad thing, and that humans can affect global warming at all. I'm not convinced of any of these premises.

You're an Easterner, Eclectic Econoclast, aren't you?

Posted by: Speller | 2005-11-04 8:40:00 AM


Harper unveils Conservative 'Accountability Act'

CTV.ca News Staff

Updated: Fri. Nov. 4 2005 9:49 AM ET

Capitalizing on outrage rekindled by the release of the sponsorship report, Conservative leader Stephen Harper has unveiled his party's "Accountability Act."

Addressing a gathering of party faithful in Ottawa Friday morning, Harper said his plan is aimed at a complete government makeover.

"This is about more than the specific sordid details of this specific scandal," he said to cheers. "It's about accountability."

In a speech outlining what amounts to his party's election campaign platform, Harper made clear his vision for the Prime Minister's Office.

"When I become prime minister I will undertake an

unprecedented overhaul of the federal government," he said. "That is my commitment to you."

"Cleaning up government begins at the top," he added, accusing Prime Minister Paul Martin of deflecting blame whenever the taint of scandal touches him.

"Under Paul Martin's watch the waste and mismanagement and corruption has continued."

But Harper said things would change under his leadership, beginning with the introduction of a "Federal Accountability Act," as soon as the Conservatives form a government.

Highlights of the proposed legislation include:

* more powers to independent officers of Parliament, including the auditor general and ethics commissioner;
* measures to ensure federal grants and contracts "provide value for taxpayers' money;
* "real protection" for whistleblowers;
* reform of access to information laws
* merit-based appointments to public office;
* a complete ban on corporate and union donations, and an annual cap of $1,000 on individuals' donations to federal political parties;
* a mandatory five-year break before former ministers and other senior public officials can lobby government;

"We must clean up corruption and lift up the veils of secrecy that have allowed it to flourish," Harper said, promising to "replace the culture of entitlement with a culture of accountability." >>>
http://www.rapp.org/url/?L92W172R
ctv.ca

Posted by: maz2 | 2005-11-04 9:21:12 AM


Check out these: Global Warming Gobbledy Gook http://strongconservative.blogspot.com/2005/09/global-warming-gobbledy-gook.html

and Market Forces vs. Government Forces for cleaning up the environment http://strongconservative.blogspot.com/2005/10/market-forces-vs-government-forces.html

Posted by: JSd | 2005-11-04 9:29:20 AM


But Kyoto has rigid timetables and formulas. If you left it up to personal choice, it will take a long time - and the planet will suffer. THE PLANET!!!

If we don't live up to this agenda, then we will be ignoring our sacred obligation to the UN. THE UN!!!

The oil companies would continue to fill the sky with carbons. CARBONS!!!

Now, why does all this make sense coming from people like David Suzuki? SUZUKI!!!

The problem as I see it is that the implementation of Kyoto was left to the Liberal Party, paid agent of the corporations and sensitive only to the whims of Ontario's voters. They knew the impact it would have, so they dumped it on Alberta, which is perfect because there's nothing they can do about it.

Or so they think: secession and statehood if necessary! Think of our homes, jobs, families and future. Canada doesn't care a lick about them. It is our obligation to take control and do what we have to do.

Posted by: Scott | 2005-11-04 9:39:52 AM


David Suzuki, the Living Labcoat, has no more expertise in climate science than my dog does.
It's not his field. Suzuki's field is genetics.

Posted by: Speller | 2005-11-04 9:55:51 AM


So how am I supposed to integrate this with greater immigration? If we let our population decline, wouldn't it mean we'd be able to burn less overall petroleum? Last time I noticed, manual labour wasn't a priority in this country. If we had fewer people operating fewer machines, the overall level of pollution would have to drop, wouldn't it? And those highly talented, very desireable immigrants could remain where they were, and help their poorer brethern, instead of coming here so they could earn a bunch of money which Ottawa would tax away and send (or pretend to send, or promise to send)to needy third world countries and other disaster areas. Have I stumbled onto something here?

Posted by: kakola | 2005-11-04 10:03:32 AM


Bolshie alert. And I mean both the professor and the leader of the opposition.

The increase in waste and theft occurring in the federal government over the last few decades coincides with both (a) a steady increase in the number of rules and oversight mechanisms, and (b) a steady increase in the amount of money that comes into the government's hands.

And the answers to this, according to the people who would be our leaders, is to (a) increase the rules and oversight mechanisms, and (b) put more money into the government's hands.

Posted by: Justzumgai | 2005-11-04 10:20:54 AM


Speller,
Genetics UBC and piss poor at it. Not my opinion, those that worked with him.

Posted by: AsISeeIt | 2005-11-04 10:27:47 AM


Eclectic Economist is right. It's called a system of Pigouvian taxes. And it doesn't have to cause "inflation" or destroy the economy. That's because you make it revenue neutral by cutting another broad-based tax--say, the GST--so the cost of some goods goes down. That induces people to substitute away from polluting goods and towards non-polluting goods. Being right wing shouldn't mean being against any kind of government intervention. It should be about doing whatever needs to be done efficiently, using the price system, instead of with regulation and heavy handed direct government intervention.

Oh, and while it is true that David Suzuki's field is genetics, he has published a paper in almost forty years. He's been a science tourist for decades now. Makes you wonder about the tenure system doesn't it?

Posted by: CdnExpat | 2005-11-04 10:32:48 AM


Justzumgai, that plan is an excellent example of thinking outside the box. Goodness me, it's positively foolproof!

Posted by: Kathryn | 2005-11-04 10:37:13 AM


CdnExpat, the GST was touted as revenue neutral.
Fool me twice shame on me.

Less government is better government. All taxes are market intervention and are de facto a form of regulation.

Posted by: Speller | 2005-11-04 10:51:47 AM


"Being right wing shouldn't mean being against any kind of government intervention. It should be about doing whatever needs to be done efficiently, using the price system, instead of with regulation and heavy handed direct government intervention."

Uh-huh. And pigouvians might fly.

Socialist calculation always fails. It fails because the socialist calculators are not even 1% as smart as they think they are, their statistics are flawed, their prescriptions are self serving, and most of all because they are implementing their policies with other people's money and not with their own. Have you ever heard of a bureaucrat being fired for making a mistake and killing an industry instead of helping it? Or an economics prof who was busted down to kindergarten teacher, because his grand plans to tax "the snot" of what he thought was "possibly" a polluting industry, actually caused lost jobs and a lower standard of living? Of course not. When a government fails, it sets about demonstrating how the failure was caused by insufficient government invention. Academic failure requires even more funding, to do further studies of the remarkable phenomenon of garbage-in, garbage-out.

What you lefties are sorely lacking, is an understanding of what is your property, and what belongs to someone else. If your property is polluted by someone else, you can sue them. But you have to prove your case - with real facts, not with trumped-up, self-serving, pseudo-scientific suppositions and with economic pigouvian bluster. Because to take away someone else's property without demonstrating beyond a doubt that they have done you harm, is a crime.

Posted by: Justzumgai | 2005-11-04 11:25:10 AM


"Being right wing shouldn't mean being against any kind of government intervention."

OMG that is such a Canadian "right-wing" statement. No wonder my husband laughs at me and tells me that even if I someday become a citizen, I'll "never be a Canadian". (Apologies to right-wingers here, you know what I mean tho.)

BTW, my husband took several of his degrees at UBC and his father was a prof in the sciences there, apparently Professor Suzuki is a major joke in the campus community. Not that I'd ever heard of him before coming to Canada; he's strictly Can-Con.

from Meg the friendly American in Edmonton

Posted by: Meg Q | 2005-11-04 12:26:10 PM


Meg Q, CdnExpat lives in the US. Do you know what expat means?

Posted by: Speller | 2005-11-04 12:37:03 PM


Meg Q
Your father in-law is probably one of the people I was referring to, in those days it was a much smaller community and I knew most of them. My personal exposure to susuki was him demanding an appearance fee before he would show up for an important cause here on the Island. I won't go into it here but he and his people were told to take a hike. He was as you said, a joke.

Posted by: AsISeeIt | 2005-11-04 12:49:51 PM


Here's a right-wing, capitalist idea:

Increasing global demand, not just in Canada, is driving energy prices higher. To compensate, the *market*, via individuals, will decide how to best reduce exposure to the increased cost (smaller cars, better insulated homes, etc), and thereby consume less fuel and produce less carbon.

And, yes, I understand that increased global demand is due to increased consumption, so this might appear to be a wash. However, the increased demand is coming largely from outside our borders. Taxing the 'snot' out of carbon-based fuels at home only screws our own economy and does zip to the overall CO2 'problem' because the biggest consumers don't give a rip.

Let the market figure out ways to reduce consumption simply to save money. I shudder to think that the government must be the one to lead the way on this, they should stay out of it.

(wait, I misread EE's post. We might think that CO2 is the problem but it's snot ;-)

Posted by: jon | 2005-11-04 2:03:08 PM


You are probably right about our government not being a capable or competent arbiter of what will work. All history tells us this will be so because the bureaucrats always repeat their behaviour.

But, the idea that Taxing the carbon fuels so users pay more to the government is a bit flawed.
Have we not been paying outrageous taxes on gasoline and other fuels for more than 50 years? Has the demand gone down? Have we got real options for heating our homes and fueling our transportation?

I am affraid that the Kyoto commitments are flawed in the basic concept and that our spineless government has simply fallen back on the Politically Correct postion to avoid confronting the realities of energy demand/ economic stability and environmental impacts.

I'll buy a fuel efficient, alternative fuel vehicle just because it makes sense to me to use a vehicle with a lower cost of operation. But I'm not going to do it until that vehicle meets all of my transportation needs. I already take every precaution and use every aid available to reduce home energy use.

I do not want to see any government taking any more money out of the economy or out of my pocket!

Posted by: PGP | 2005-11-04 2:10:11 PM


Hmmm, being an American "expat" myself I've a vague awareness of the word but thanks for reminding me. Not certain what that all has to do with anything but still.

Bottom line, "carbon" taxes, "Kyoto" taxes, any sort of these ideas are plain stupid. Give incentives to industry - through the defens[c]e dept would be my choice - to develop alternatives if you must, through *real* projects, but I don't think the govt should either hike the price of fuels (with add-ons at the pump) or keep it down (by owning/bailing out oil companies, etc.). Frankly, I think what we're seeing has a heck of a lot more to do with a) sunspots and b) volcanic activity, among other things, than what we people do. But that's not a very rousing campaign platform or a very exciting Greenpeace mailer, etc. - not much a politician or activist can do about sunspots, is there?

Posted by: Meg Q | 2005-11-04 3:33:55 PM


thank you for mentioning sunspots and volcanic activity, Meg Q. "Scientists" like Suzuki and "Environtmentalists" seem to forget these aspects of our environment.
Climate change is a fact. Man-made climate change is not...therefore any Kyoto plan is self-destruction. The scarcer oil gets, the higher the price will get. The market finds a way to effectively deal with any issue.

Posted by: Angela | 2005-11-04 4:35:22 PM


Tax this snot out of gas and I will immediately develop and sell my new line of syphons.
Light, efficient, inexpensive. In clear and black.
Small, medium and large, depending on the size of the target tanks.
FAst transefers guaranteed, no spillage.
No problemo.

Posted by: John | 2005-11-04 9:03:00 PM


“My proposal is to tax the snot out of carbon-based fuels and let the market react “

This has to be the worst gubmnt interference imaginable.

Carbon-based fuels have already had the snot taxed out of them (including tax on tax). As has been noted elsewhere in these comments an additional massive tax on energy, the equivalent of a new NEP, would be an enormous blow to the economy. The only possible good that could come of such a move would be the immediate secession of Alberta from confederation (and my immediate emigration to the USA.)

Even assuming that the global warming alarmists’ greatest fears (I should say ‘hopes’) are true Canada’s contribution to their proposed solution is insignificant. And given the exceedingly shaky science Kyoto is based on it would be utter lunacy for Canada to ‘lead the way’ in ruining its economy ‘for the cause’.

So my proposal is for Canada to climb down from its UN-suck-up-goody-two-shoes-save-the-world idiocy and join the USA, Australia, Britain, India, China and a growing list of others in sh*t-canning Kyoto all together.

Posted by: JR | 2005-11-04 10:45:33 PM


I wish the technology in the movie Jurrassic Park was real.

We could go down to the Tyrrel Museum and clone some of the T-rexes that used to run around in the Badlands.

PETA would probably freak out when pieces of them started falling off from frostbite.

Posted by: Speller | 2005-11-04 11:00:15 PM



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