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Mark Francis answers your questions on Green Shift.

Mark, if you’re not aware, runs the blog Section 15. He’s a former Green turned Liberal, and he’s gotten a bit of fame from this case (which he will probably tell you he’d rather not have).

Anyhow, Mark has been doing a very good job of responding to critics and questions about the Green Shift at his own blog and at various blog comment sites. I saw a question tonight that was asked why couldn’t the Green Shift be regional rather then national, where provinces would keep the revenue from a carbon tax rather then it being administered as a national program, and here is Mark’s reply:

If one is going to keep insisting that a regional interpretation should be taken, I would point out two things:

    1. CO2 doesn’t care about regions
    2. Toronto has a lot to complain about Ontario, if one is to think in terms of regional fairness. Repeat this concept 100’s of times across Canada.

The entire point of cap-and-trade and direct carbon taxation is to include in costs costs which were previously external….If a regionalist system were used, that is, a system where each province kept the proceeds of a carbon tax, provinces with the highest emissions per capita would benefit the most. Provinces which had previously worked at reducing emissions, would get less. And if high emission areas failed to do anything, in order to make the needed reductions, the other regions would have to work even harder, in effect subsidizing the high emission regions. This is why a national system is needed, not a regional one.

That sounds like a pretty reasonable explanation to me why this needs to be a national program rather then a patchwork of provincial ones (and we all know how Harper hates national programs and is doing everything in his power to ensure the Federal government is as weak as possible by the time he and his regionalist Cons. leave office so that’s its very hard to do national programs. Why, above and beyond Harper’s antipathy toward the environment and anything that remotely puts a small dent into his Big Oil corporate friends, do you think he’s so angry about this plan? Because, it’s a national plan).

I’d like to nominate Mark as a Liberal spokesperson on some talkshows over this issue. I think he’d do a great job explaining this plan to folks.

UPDATE: Hat tip to Blues Clair in comments for pointing to this news release issued by an alliance of environmental organizations, including the chief climate change specialist with the David Suzuki Foundation, which seeks to answer and clear up the misconceptions people may have about the BC carbon tax which takes effect July 1st. I’m not sure if they have anything released on the Liberals Green Shift plan, but a lot of the misconceptions listed there (and lets be fair, a lot of this is stuff that the BC NDP have been charging this plan with as the reason why its faulty) are sounding pretty similar to the stuff that some people have been going at the Green Shift over. I’d like to see the David Suzuki Foundation and the other environmental organizations like The Pembina Institute come out with a similar release for Green Shift, if they haven’t already.

12 comments to Mark Francis answers your questions on Green Shift.

  • Kyle

    Remember, this plan isn’t set in stone, I wouldn’t be surprised that we end up with a system such as this:

    if a province sets up a carbon tax that is as comprehensive, they can keep the tax revenue and return it in tax breaks as they see fit, in exchange the federal government would eliminate the tax breaks and supplements funded by the tax.

    Since two provinces already have carbon taxes of some kind, I wouldn’t be surprised if while we end up with the same tax nation wide, that the shift is targeted differently in each province.

  • …if the oil sands operators are able to develop carbon capture on a large scale…

    Whooee! That’s dang big “if”, Jurist. Large scale CCS has yet to be developed anywhere — even places where they’ve been seriously trying. It should also be noted that CCS is not without some risk of possible unintended consequences.

    CCS is a pie-in-the-sky solution which is aimed mainly at keeping coal as king while stalling any actual GHG reduction. “Clean coal” is well-suited to AGW skeptics who have trouble facing reality.

    JB

  • Mark: Let’s note that the intensity-based nature of the Cons’ plan makes that AB-to-QC shift far less certain than it might be otherwise. Indeed, if the oil sands operators are able to develop carbon capture on a large scale, then they’ll be able to boost their own production (and potentially total emissions as well) while simultaneously being handed emissions credits to further inflate their profits at the expense of manufacturing and other industries which can’t reduce emissions as easily.

    Not that that should be seen as a feature rather than yet another serious bug. But the best response to the Cons’ indiscriminate shrieks of “NEP!” is to point out that their policies are designed to further overheat Alberta at the expense of the rest of the country rather than offering any balance between regional interests – not to allow Harper to claim he’s helping other regions at Alberta’s expense.

  • Whooee! Great point on the wealth transfer inherent in C&T, Mark. The fact that Harper’s plan advocates AB transfer wealth to QC is priceless.

    JB

  • The carbon tax prices will get passed along to consumers. Even with energy producers subject to regulations keeping prices down, the tax will get passed on at least in part as the regulators will adjust to accommodate the tax. I hope that they don’t pass along the entire tax, but that may happen.

    So, it’s likely not appropriate for corporations to have their costs completely offset. Indeed, further upstream they are to the consumer, or, to put it another way, the closer they are to the raw inputs which produce CO2, the more control they have to reduce the effect of tax on their corporate body. For example, a power utility can decide to change their power mix and move away from coal, thus reducing carbon taxation. Consumers don’t have such choices. They can merely struggle to try to reduce a needed commodity: electricity.

    Though the nuke plants in Ontario saved us a lot of emissions, we are still paying for them. There’s a deduction paying for them on every hydro bill. It’s old Ontario Hydro’s stranded debt.

    [Note: that was a TAX introduced by the Mike Harris PCs, but I digress…]

    And now, we are going to build more. I’ll take nuclear over coal, of course.

    The corporate tax cut which is part of the tax shift will be, adjusted for population, disproportionately going to Alberta, at a ration of 2:1 compared to the runner up, which is Ontario.

    Harper’s carbon trading will also price carbon emissions by commodifying it. Regions with high emissions will end up purchasing carbon offsets from regions with lower emissions.

    We know that Alberta is the region with high emissions. Can anyone name a region with low emissions, that is large enough to sell enough offsets to Alberta?

    Any guesses?

    Time’s up!

    The answer: Quebec!

    Harper is pushing a plan which will ‘transfer wealth’ from Alberta to Quebec.

    Perhaps Harper is hoping that Alberta won’t notice, but that Quebec, with all those votes Harper relishes, will ‘Je me souviens.’

  • Whooee! Kyle, you’re only talkin’ one side of the equation. Yes, TransAlta will pay a big carbon tax. Yes, that much tax could bankrupt them… if there were no corresponding tax cut on income. But, there is a tax cut as well as a new tax. It’s not all one way and while the tax cut may not completely offset the new tax, it will mitigate it and is not designed to force electricity suppliers into bankruptcy.

    I see many articles and blogs telling us how much carbon tax various entities and people will be forced to pay as if there were no corresponding tax cuts to offset the new tax. That is only telling half the story.

    Polluters and wasters will pay a disproportionate amount of carbon tax. That’s what makes it work.

    Going green is nothing other than reducing waste.

    Reducing waste is nothing other than being conservative.

    Efficiency, conservation and non-carbon fuels will save tax dollars and the planet.

    JB

  • Kyle

    Oh, and at everyone talking about how we no longer have cheap energy, don’t confuse cheap energy with cheap oil.

    Coal is still incredibly cheap! So is hydro!

    Reducing emissions can take man different forms. In Alberta, replacing electric stoves, ovens, and clothes dryers with natural gas ones would reduce emissions. In Ontario and Quebec the opposite would be true.

  • Kyle

    I would hope you would stop attacking oil, since the green shift only works out to $3 per barrel, which is pretty minimal (for Syncrude, which includes from digging it out of the ground to upgrading).

    As a whole, in Alberta the coal industry takes the biggest hit. Since the world still needs oil, it isn’t oil producers that are going to be reducing emissions, beyond what they can do easily. Electricity is the lowest hanging fruit in reducing emissions, since most coal production is closer to the centre of the province where coal sequestration is possible, without a long pipeline from the north of the province.

    To give you an idea on the financials of this, Transalta produces a large amount of power in Alberta. They have yearly revenues of close to $3 billion, they would pay a carbon tax on Alberta plants of close to $1 billion. This tax would more than wipe out any profit the firm might make, which this year was just over $250 million.

    The city of Edmonton operates a large coal plant aswell, which would pay $390 million in tax.

    The reason Alberta and Saskatchewan are far above the national average in emissions is a historical decision to expand power generation in the 1970s using coal power, while other jurisdictions most notably Ontario decided to provide new electricity using nuclear power.

    The large emitters in Alberta based on 2006 numbers will pay $4.6 billion in carbon tax. {115.4 megatonnes). While the tax shift is good in principle, there will hopefully be some refinement in the corporate tax provisions to make sure that the tax doesn’t return to the business community less than it takes out. I am not saying that individual producers would get the same amount, which would negate the purpose of the tax, but that nationally the business sector would receive tax breaks equal to the charges.

  • Thwim

    @marcel –

    Not to mention that the idea of going green hampering our economy is a myth that is increasingly falling apart as more evidence rolls in from those companies and countries that have.

    Going green is nothing other than reducing waste. Reducing waste will always be more profitable in the long term, it can just be difficult to do and expensive in the short term. But what was that quote? “We do these things not because they are easy, but because they are hard.”

    That aside, sooner or later we will have to wean ourselves from cheap energy anyway. Our only choice is the rate at which we do it. We can do it now, while we have some control over how fast we have to do it, or we can wait .. until we don’t.

  • @marcel

    In otherwards, you advocate the Conservative approach of “we aren’t doing anything on climate change until everyone else does”. If everyone in the world took that attitude, nothing would get done, and we’d be accelerating the planet’s warming without doing a thing to stop or slow it.

    That’s what nearly happened at the Montreal Protocol on climate change back a a few years ago, but thanks to the leadership of those nations who decided to lead the way, and of the chairman of that meeting, who happened to be Stephane Dion, that did not happen.

    Canada doesn’t even need to show leadership here.. it just has to get back and follow what Europe is doing, and that’s reduce emissions while continuing to encourage other nations like those you mentioned to help in the effort.

  • marcel

    I would like to respond to the statement above: “And if high emission areas failed to do anything, in order to make the needed reductions, the other regions would have to work even harder, in effect subsidizing the high emission regions. This is why a national system is needed, not a regional one.”

    If that is true, and it seems to be, isn’t the idea that Canada’s efforts to curb GHGs can make a measurable difference on worldwide climate change fall apart. China is building coal-fired power plants at the rate of one per week. What is Canada reducing our 2% of worldwide GHGs by 1/3 (our Kyoto target) going to do except handicap our economy against other nations. Shouldn’t we be actively pressuring China, India, Brazil to get involved so we can work together?

  • It seems to me by the time summer comes to end the federal Liberals are going to need something like this

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