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Wednesday, August 27, 2008

Harper vs Dion With No Plan in Sight

With a federal election in the offing let’s put all the rhetoric and political spin about greenhouse gasses aside for a moment and do a reality check. Let’s try to put this issue into perspective for once.

We've all heard the vague numbers coming out of Ottawa and being thrown around like confetti on the wind. “1990 levels”, “2008 levels”, “reduction percentage by 2050”, but what does it all mean, how do the numbers really break down and is there a real solution?

In a nutshell, the Kyoto Protocol, which was abandoned by the Harper government after being ignored by his predecessor, called for Canada to reduce emissions to 6% below 1990 levels by 2012. It may only be 2008 but that ship has already sailed.

In 1990 Canada had emissions of 569 metric tonnes. A reduction of 6% means Canada, within the next 4 years, would need to reach a level of just under 535 metric tonnes. Instead of reducing to meet those targets, by 2005, Canada was producing in excess of 747 metric tonnes, an increase of about 24% above 1990 and 30% above its Kyoto obligations. That number is still rising.

It’s numbers like these that prove just how ineffectual Canada’s federal government, no matter the stripe, has been when it comes to addressing this global concern.

Instead of truly tackling the problem, as emissions climb, Ottawa’s power brokers and politicians have been scrambling to find ways to use the situation as a means of :

A: meeting their political objective of winning votes in larger centers;
B: lining the pockets of their cronies in big business;
C: filling government coffers; and
D: redistributing wealth from Canada’s fringes to its ever hungry middle.

The best solution Stephen Harper has come up with to date is a watered down version of a cap and trade system. The Harper system would set targets on industry and then charge them a set amount if they exceed those targets. They would also be able to buy and sell those targets with other companies much in the same way as stocks are traded on the stock exchange today.

Can’t you just smell the money trading hands now boys and girls?

Can’t you just feel the wealth growing in brokerage houses across the Country (or at least parts of it) while the skies grow ever greyer and chewier?

What about Stephan Dion? He’s had some time waiting in the wings. Surely he must have a plan. After all it was Dion who helped broker the Kyoto Protocol while serving as Environment Minister.

Enter the Liberal Green Shift.

Dion claims his Green Shift would be a revenue neutral tax. In other words the federal government would not profit from it (the truth of that remains to be seen) but instead would offer tax breaks and fund programs for Joe Taxpayer that would offset “much” of the cost.

According to Dion, by simply cutting back on our use of fossil fuels we can reap the benefits of this new windfall. However if we choose to squander our hard earned money on evil emission producing activities, such as heating our homes in winter, then we will lose any benefit we might have gained and possibly more.

Ah if only the world were just that simple…

First of all, doesn’t the fact that some of the tax collected will be used to fund things such as university tuitions, mass transit or other programs strike anyone as a little odd? Aren’t those programs exactly the sorts of things government tax revenues are used for anyway? Doesn’t that mean the new carbon tax wouldn’t be revenue neutral but simply another form of tax?

Secondly, what the plan fails to take into account, or more likely ignores, is that everyone, in addition to paying the added taxes, will see the cost of goods go up. This is especially true for anyone not living near a major manufacturing area such as Ontario, Quebec or the U.S. border. Those people will see the price of everything they consume rise dramatically as already high shipping costs increase and those costs are passed along to consumers in more remote areas.

The Green plan also glosses over the realities of people in rural areas who do not have the luxury of switching to mass transit to get to work or do their shopping. It forgets about places like the island of Newfoundland and the remote areas of Labrador, areas that have to import most goods by ship or truck. These areas and others like them will see massive increases passed along to consumers in areas that are already economically depressed and suffering from higher than average unemployment.

The benefits of getting a few tax breaks will not be as easily seen by rural Canadians as it will to someone in the say greater Toronto, Montreal or Ottawa area where mass transit is available and goods are more easily transported. Then again, that’s the plan isn’t it?

Here’s a novel idea for both parties to consider. Instead of simply moving wealth around under the guise of protecting the environment and pandering to densely populated areas for votes, why not spend some time actually coming up with real solutions to a real problem?

I’ll give you one free of charge if you want it.

I’m no expert so this idea may be as useless as anything the brain trust in Ottawa has delivered so far but at least I’m willing to toss it out there. I’ll leave it to greater minds (or lesser ones) than my own to figure out if it’s worth the virtual paper it’s written on.

The chart below shows Canada’s emissions by Province in 1990 and in 2005 (the most recent year I could find). Clearly the biggest polluters are Alberta, Ontario and Quebec, in that order. In fact, not only are they the biggest polluters but they, with the exception of Quebec, have also seen their emissions rise sharply, rather than fall, by a staggering amount since 1990.


Here’s a question that comes to mind: Why should the people of all the provinces and territories be tarred with the same brush as the ones that have allowed such big environmental offenders to prosper inside their borders?

Consider Newfoundland and Labrador for example. As the chart indicates, its emissions have remained virtually unchanged over the period in question. In 1990 Newfoundland and Labrador’s emissions accounted for only about 2% of Canada’s total emissions, a number within reason when you consider that it also had between 1.6% and 2% of Canada’s population during the same time period.

Instead of simply setting up a mechanism for the big boys to profit by trading away our future, instead of making everyone pay equally for what is clearly a bigger problem in certain parts of the Country and instead of simply shifting hard earned cash into Central Canada by way of tax breaks, why not think outside the box.
What about a plan that incorporates some parts of each party's plan with a Provincial element. Sort of a Cap and Tax Provincial Targeting Plan (catchy name huh?)

Here goes...
When it comes to most forms of federal funding or federal programs in general: equalization, health care transfers, etc. calculations are generally done on a per capita basis.

In addition, politicians are always happy to remind us that there is a value to be placed on emissions, so why aren’t per capita calculations good enough when it comes to those?

Taking Canada’s overall emissions and dividing them up by each provincial or territorial share (on a per capita basis) one can quickly see where the problems are. All Ottawa has to do is simply charge each provincial government (not individuals or business) their fair share of “carbon costs” that exceed their provincial limit.

Under this plan provincial governments that have allowed industry to develop unchecked and without concern for the environment, would be left to make things right by collecting additional taxes, fining industrial polluters or paying Ottawa out of their own general revenues for that development. In other words they would pay their fair share for the “cost of carbon” they produce.

Remember that carbon emissions are the result of industrial development, manufacturing and population density (autos, homes, etc.). The reason why some provinces have such high carbon emissions is because they have more industry and more people. In other words they are benefiting from the industries and people that produce them.
High emitting provinces are gaining by having high employment rates, more corporate taxes, a large personal income tax base to draw from and all of this is thanks to the industries that have setup there and the people who work in them. Shouldn’t the provinces benefiting the most by destroying the atmosphere shoulder most of the burden?

Canada is not a one size fits all Country and not all provinces are producing the same amount of emissions. By making the provincial government responsible for paying its share of the cost it it puts the individual provinces in control of their own carbon destiny while ensuring that national targets are addressed. This approach would allow each region to look at its own unique options for how to address those federal costs in a way that works best for their constituents and the business interests in their area rather than placing a blanket tax on every individual in the Country.

Yes, the cost of goods would still go higher but at least those in more economically depressed areas and those who are not responsible for the lions share of the problem would not be forced to pay additional taxes as well. Provinces above their share of the target would pay. Those below it would not. It’s that simple.

To follow through on this, the newly generated federal revenues could then be used to lower Canada’s carbon footprint Nationwide through investment in new technologies, funding projects like CO 2 sequestration, the east/west power grid, the Lower Churchill hydro development, wind power, mass transit and R&D.

In the end this type of approach might go a lot further toward solving the problem than either of the existing federal plans and it would allow some flexibility in various regions that could have positive economic impacts.

Not only would those who benefit most (the worst emitters and those who condone their actions), pay the cost but federal investments in renewable power and green technology would allow some parts of the Country to almost immediately reduce their footprint to below their provincial target.

One place that comes to mind is Newfoundland and Labrador with projects like the Lower Churchill. By opening up the east/west grid and developing the Lower Churchill hydro project Newfoundland and Labrador could shut down its major oil fired generating plant and immediately fall below its target. It could then sell some of its excess power to other jurisdictions like Nova Scotia or Ontario and in doing so help them reduce their carbon footprint in a major way.

In addition, instead of trading away the benefit of this carbon under capacity through some sort of corporate trading system, as touted by Stephen Harper, provinces that move below their targets would then have the advantage of being able to attract new industry and jobs by virtue of offering less expensive tax regimes than overly developed areas with high carbon taxes.

I’m no expert but it would seem that such a plan might actually result a cleaner environment, lower unemployment in economically depressed areas, create a more geographically dispersed economy and allow the federal government to commit to a stable and shared power infrastructure and R&D program across Canada.

I can’t promise you this sort of thing would actually work, but at least it’s an idea and one that is offered without any sort of political gain as a motive. Unfortunately the fact that it isn’t politically motivated is why I can almost guarantee you that no federal politician will ever consider it.

3 comments:

Anonymous said...

Wow Patriot!!! I love it but I bet the federalies won't.

You are right that the provinces producing it should pay for their share but that would mean AL, ON, PQ and so on would pay the most so what politico will put his head in that noose even if it is good for the environemnt.

I like the fact that you didn't run away from the cost (even to NL) but realize that there is a cost to be paid for pollution. You do have a point though. Why should the people of Alberta (low unemployment and good jobs) cause so much pollution with the tar sands yet individuals would (under the Green Shift) pay no more than someone living in NL or PEI?

NP said...

All federial policies are based and winning voters in Central Canada no matter what party. WHY this is were the most voters are and were elctions are won mass transsit is well developed in this area and so is a rail and water transportation systems thus environmental polices promote mass transit and fuel taxes have less effect homes are heated by natural gas which comes out of a pipe in the ground carbon trading keeps big business happy which is important for campane funds

i have more for this but my computer in gone awal so i will leave it for another time

Calvin said...

First things first Myles. I would like to say how great it is too see you back on the job. Just when the entire Island is getting drunk on oil and the bottom is falling out of “the Independent “it’s very nice too see that we have a place lift our voices in concern about Newfoundland and Labrador.

As with all your writings Myles I try to find away into what you are saying to your readers and see the benefit of your ideology. From this writing all I have to say is wow. You make so much common sense “it’s rennin out your ears” as the old crowd use to say. But, if one Newfoundlander or Labradorean thinks for one minute that Ottawa is going to implement anything that is not going to benefit Ontario or Quebec, well excuse me when I call you an Idiot, because if anybody in our great province thinks for one second that the feds are going to side with Mr. 2.2% over the Mrs. 187 seats then you should have stayed in school..

This will never be. The only thing that the next election will show is how much Newfoundland and Labrador will have to pay out each year on Hebron and Hibernia and White Rose.

Ya see Myles, Ottawa never gives anything to any Province that it somehow can’t claw back with some sort of Tax. It will not be the center of the Empire that pays for this so called “GREEN SHIFT” but the provinces that produce the fuel that the industrial provinces need.

See Myles, while everybody is out getting drunk on our own Kool-Aid, Ottawa is already making plains for Newfoundland and Labrador to pay more taxes on the natural resources that we sell to the industrialized provinces and we know who they are.

I really hope that I am wrong on this and that I’m being a party pooper, but 59 years of history have shown me different. And, now we don’t even have Mr. Hicky I see as the head of the Newfoundland and Labrador First Party. As everyone is celebrating Myles, who will be sober enough to get our great province home.

I fear a return to something more common to our home.