Layman's Blueprint for a Truly Green Economy

Far too often I'm accused of only discussing the problems that face my little corner of the world rather than looking for solutions. With that in mind I decided to take some time (granted it was only a couple of hours) to consider a "Manufactured Right Here" solution to what many people around the world believe is the biggest concern of our times. Global warming.

Tackling such a major issue is a tall order and since I'm not scientist, politician, economist or even an environmentalist the concept I've come up with may be totally out to lunch. Never the less here it is. A layman's plan for carbon management.

Feel free to poke holes in it, tear it up and spit it back out. Don't hesitate to tell me how naive I am to think something this simple might really work. I'm fine with that, in fact your comments are welcome.

At least I can honestly say I thought about the issue and maybe, if just for a moment, I can silence those who believe I spend far to little time thinking about solutions. After all, with the schedule I have 2 hours is a major committment.

Enjoy.

Cap and Tax Jurisdictional Plan

Background

When considering Canada’s most highly discussed greenhouse gas reduction plans, “Cap and Trade” and the “Green Shift”, three questions immediately come to mind:

Why should corporations be encouraged to profit through the trading of emission credits which are essentially the equivalent of cleaner air? (Cap and Trade)

Why should corporations be permitted to meet their environmental obligations by simply purchasing “clean air” credits rather than actually reducing destructive emissions? (Cap and Trade)

Why should every person in Canada be expected to pay higher taxes regardless of whether or not they live in a jurisdiction that allows excessive levels of greenhouse gas emissions to exist? (Green Shift)

Consider the case of a province like Newfoundland and Labrador, where emissions have remained virtually unchanged for nearly 2 decades.

In 1990 (the target setting year for Kyoto) Newfoundland and Labrador’s emissions accounted for about 2% of Canada’s total output, a number within reason when you consider that it also accounted for between 1.6% and 2% of Canada’s population during the same period.

Other Canadian jurisdictions have a similar story to tell while some have seen their emissions grow by a staggering amount.With these realities in mind important questions need to be answered and a real solution implemented to address a growing environmental problem.

Perhaps the best solution is an approach that incorporates components of the “cap and trade” and “green shift” options with the inclusion of a jurisdictional or provincial component that empowers distinct regions while addressing national concerns.

The Cap and Tax Jurisdictional Plan is based on four fundamental principles:

1) Most federal funding initiatives and programs: equalization, health care transfers, etc. are managed and delivered on a per capita basis across Canada.

2) Political representatives are, quite rightly, quick to remind us that there is a real dollar value or cost associated with carbon emissions.

3) Every person in the Country, as a natural part of their existence, should have an equal right to emit a set amount of carbon per year.

4) No individual should have the right to infringe upon another’s rights through an over production of carbon that would jeopardize the environment in which we all live.

A Cap and Tax Jurisdictional Plan takes into account all four of these basic principles by placing a per capita cost on the value of greenhouse gas emissions and targeting those emissions based on the principle of equity.

How it works

Calculating Canada’s overall emissions and dividing the result into provincial or territorial shares, on a per capita basis, one can quickly see where the biggest problems exist and easily identify precisely how much of the excess emissions (those beyond the Kyoto targets) each jurisdiction is responsible for.

Emissions are already tracked in this way by the federal government today.

By setting a cost per ton on CO2 emissions, knowing each jurisdictional output and population, the federal government can charge each provincial or territorial government, not individuals or business, for a fair share of the “carbon costs” that region produces in excess of per capita limits.

(Eg: Newfoundland and Labrador, with 1.7% of Canada’s population, would be permitted to produce 1.7% of Canada’s targeted emissions. The province would be held responsible for paying the cost of additional emissions produced beyond that target.)Jurisdictions allowing unchecked industrial development without concern for the environment can then be held responsible for the cost of their excess emissions. Under the plan jurisdictions would be obligated to pay the cost of excess emissions into a federal “green renewal fund”.

Precisely how jurisdictions meet their emission expense obligations should be left to the individual jurisdictions to decide. This will allow them to determine their own approach to correcting or paying the cost for the emission problems in their region, either by collecting additional taxes, charging industrial polluters, using general revenues or implementing a unique “made right here” solution that best fits their unique situation.

Ensuring fairness and equity for all

Under a Cap and Tax Jurisdictional Plan each region pays its fair share of the “cost of carbon” rather than forcing everyone to pay equally. This is the fairest and most equitable solution. Emissions are not produced equally across the Country, nor are the direct benefits that stem from those emissions enjoyed equally.Carbon emissions are primarily the result of manufacturing output, industrial development and population density (autos, homes, etc.). The reason some jurisdictions have higher emissions than others is because they have more industry and more people producing those emissions.

This is not a bad thing, in fact the opposite is true, but by accepting the premise that there is a carbon cost connected with the emissions produced, through economic growth and its resulting prosperity, it must also be recognized that those who benefit most from those emissions should be responsible for the associated costs.

Environmental impacts aside, higher emitting regions benefit greatly from the carbon emissions they release. These benefits include lower unemployment rates, a wider corporate tax base, access to resource royalties and a larger personal or corporate income tax base on which to draw. These levels of these benefits that exist within a jurisdiction are a direct result of the industries that operate there and the people who work in those industries.

Is it fair to expect people living in less developed regions (with lower emission output) to pay the same “carbon costs” as those who enjoy the additional benefits available in more developed (higher emission) areas?

Under a Cap and Tax Jurisdictional Plan the areas that benefit the most will be expected to pay their fair share for the economic benefits they enjoy.

The benefits of a jurisdictional approach are clear

Canada is not a “one size fits all” Country and as such a “one size fits all” solution is not the answer.

Not all jurisdictions produce the same levels of emissions and not all jurisdictions have the same economic capacity or growth agenda.

Placing the burden of responsibility directly on provincial and territorial governments, rather than on all taxpayers, provides an incentive for jurisdictions to find creative ways of reducing emissions. It also puts those jurisdictions in direct control of their own carbon destiny while ensuring national and international concerns are addressed.

A Cap and Tax Jurisdictional Plan allows each jurisdiction to tailor a unique solution to their carbon emissions and related costs. This ensures that the solution is one that will work best for their constituents and local industries. It does not place a blanket tax on every individual or business in the Country and it does not make the assumption that the federal government knows what is best for each unique region.

As with any plan that puts a dollar value on emissions there will be a resulting increase in the cost of goods and services. This is unavoidable however most Canadians are willing to shoulder those costs as long as they are fair and reasonable and as long as they recognize that it will truly make a difference to their environmental outlook.

Additional costs are a reality under either a “cap and trade” or “green shift” plan just as they are a reality under a Cap and Tax Jurisdictional Plan. The difference is that under this plan individuals and businesses in more economically depressed jurisdictions, those that are not responsible for the lion’s share of emissions, are not expected to pay higher additional taxes without regard for their role in the production of those emissions.

The plan also ensures that when a region is in compliance with their targets they are positioned to recognize additional economic benefits.

Under this plan the federal government can charge the provincial and territorial governments directly for excess emissions. This allows the process of collection to remain streamlined and cost effective so more of the revenues can go directly into a fund that can be used to help reduce emissions on a national level.

The same level of simplicity would not be possible with the collection of taxes from over 30 million individuals on a variety of products and services or in taxing/fining individual corporations for their emissions. Under those approaches the bureaucratic costs alone would seriously erode the value of any revenues collected.

With a direct provincial/territorial approach the options exist to either collect emission taxes from the 13 jurisdictional governments on an annual basis or simply deduct the value of excess emissions from existing federal transfer payments and route those revenues into the new federal “green renewal fund”.

This newly created “green renewal fund” should be dedicated to the lowering of Canada’s overall carbon footprint.

This objective can be accomplished through investments in green technology solutions, providing funding for projects such as CO 2 sequestration, the east/west power grid, clean energy development, wind and solar projects, mass transit initiatives and investment in R&D opportunities.

This approach will drastically reduce greenhouse gas emissions nationally while being fair and equitable to all taxpayers and providing each jurisdiction with the flexibility and empowerment they need to manage their unique situation.

A green economy provides limitless opportunities.

A Cap and Tax Jurisdictional Plan provides an opportunity for jurisdictions to take advantage of new and positive economic opportunities that would otherwise not exist.Not only would those who enjoy the economic benefits inherent from the emission of greenhouse gases be required to pay the cost of those emissions but it is also true that new opportunities will become available for those that meet or fall below their emission targets.

Federal investment in green technologies and projects across Canada would allow jurisdictions already close to meeting their targets to almost immediately reduce their carbon footprint below the limit. It can help others to work toward meeting their goals.Once again let’s use the province of Newfoundland and Labrador as an example.

With the completion of a project like the Lower Churchill hydro development and a means to get that power to market (the east/west power grid) Newfoundland and Labrador would be capable of shutting down its major oil fired generating plant and immediately falling below its per capita Kyoto target, even based on 1990 numbers.

Once Newfoundland and Labrador has met its power needs and ensured its future capacity it could then sell any excess power generated to other jurisdictions, such as Nova Scotia or Ontario, and in doing so help them reduce their carbon footprint dramatically.This is just one example of how a Cap and Tax Jurisdictional Plan and its “green renewal fund” can benefit everyone.

While a Cap and Tax Jurisdictional Plan calls for a cap on emissions and a tax on excess output it does not directly tax individuals or allow for the trading away of carbon credits. Instead it allows each region to determine how to best handle carbon emissions and related costs and it ensures that any under-capacity in output directly benefits the people of the region by allowing them to leverage their emission shortfall in attracting new industrial and commercial growth.

Jurisdictions that meet or fall below their targets will benefit from the ability to more easily attract new industry and employment. This can be accomplished by offering less expensive carbon regimes than those to be found in already overly developed areas with higher carbon costs. This in turn would allow companies setting up shop in low carbon areas to produce their products or services at less cost than they would find in a higher carbon region.

The ability to attract new industry to underdeveloped regions would improve the economic outlook those regions and encourage higher emitting jurisdictions to further reduce their own emissions and related costs to better align their emission limits and growth potential.

A Cap and Tax Jurisdictional Plan would create a cleaner environment, fairer distribution of emission costs, a streamlined tax collection program, lower unemployment in underdeveloped regions, a more geographically dispersed economy for the benefit of all Canadians, a well funded environmental development fund and make Canada a leader in the green economy.

Canada's Economic Recovery Plan (For Dummies)

With the economy on life support, businesses closing their doors and laid off workers stacked up like chord wood across the Country the political thermostat has been cranked up on bust in Ottawa and the self serving rhetoric is flying around like hungry bees at the hive.

Unfortunately the only ones with anything to gain from all the hyperbole are the politicians themselves. Like it or not, the rest of us are on our own.

They can spin it however they like but the fact remains that there is no money available to bail out the forestry sector or the commercial fishing industry, both of which until recently employed hundreds of thousands of individuals. You see the problem with those industries, according to the Conservative talking heads, is not one that Ottawa can address. It’s all about a lack of markets for their products.

On the other hand to listen to our elected officials, you’d somehow believe that pouring billions upon billions of our tax dollars into the auto sector, which employs tens of thousands, is simply the right thing to do.

Funny, but I thought I read someplace that a lack of buyers for North American gas guzzlers was what was killing the industry. My mistake I guess.

Meanwhile, up on the Hill, the Liberals, NDP and Bloc are all claiming to be the champions of the working classes. Yes sir, they all want to be seen as standing up for little guy who’s lost his job. Why if the Harper government doesn’t soon implement changes to the qualifications for EI and help those people the opposition will…well it…

What? What exactly will Mike, Jack, Gilles do anyway?

Every MP in Ottawa knows the odds of electing another minority government are staggering. Nobody knows if the Liberals can actually win the next time out or not. According to the polls both the NDP and the Bloc stand to lose seats if an election were held right now. Add to this the fact that it would take all three parties to boot the Tories out of office, at a time when a huge percentage of MPs (mostly with the Bloc) need only one more year in office to qualify for their fat taxpayer funded pension and we all know exactly what they’ll do.

They’ll complain and attack each other for political advantage, protect their own incomes, ensure that 45 members of a party bent on splitting Canada apart get a good federally funded pension and they’ll do all of this, knowing full well that at the end of the day none of it will help the unemployed who need EI to survive.

On the topic of EI, I’m sick and tired of the rhetoric surrounding how many hours it takes to qualify. Once again the political elite and pundits have pulled Newfoundland and Labrador out of their back pockets (or from slightly to one side of it) in an effort to show how unfair the rest of the Country is being treated and how easy Newfoundlanders have it on the “rock”.

The latest trend these days is to compare the number of hours necessary to qualify in BC or Ontario, between 600 and 700 hours, while, and I quote, “…in most parts of Newfoundland it’s almost a God given right to collect and you only need the minimum of 420 hours”.

What they never mention is that the high number of hours quoted for Ontario, BC (or what ever province is the flavor of the day) is what’s needed in urban areas with low unemployment rates. By comparison, in the North East Avalon region (call it the St. John’s area if you like) you also need more than 600 hours to qualify, just as in most urban parts of Canada.

While I’m on the subject, they also don’t inform anyone that roughly half the population of Newfoundland and Labrador lives in that particular area or that in parts of Ontario and BC and across Canada there are rural areas, just like those in Newfoundland and Labrador, where the minimum number of hours are all anyone needs.

The only difference between Newfoundland and Labrador, when it comes to EI qualification, is that many other provinces have far more people living in those rural areas than Newfoundland and Labrador does and as a result are more likely to have large numbers collecting EI, or as Jim Flaherty is likely to refer to them these days, “EI finalists”.

Personally I don’t like the idea of someone only having a job for 45 days being able to collect EI for a year. On that one point Stephen Harper and I can agree, but really, why all the bawling and blaring over EI anyway? To hear Steve and Diamond Jim Flaherty talk about it you’d think lowering the number of hours required was going to crush Canada and send the national debt spiraling into some bottomless abyss.

It seems they’ve conveniently forgotten something. For years the Canadian debt was paid down by siphoning off EI premiums meant to be used in just the sort of situation the Country finds itself in today. Billions were diverted over the years to debt reduction instead of being put aside for income support. Some estimates put the figure at $50 billion or more.

In other words the comparatively low Canadian debt the Harper government is so happy to talk about in these hard times is there, in large part, thanks to $50 billion in EI premiums that were collected from individuals and businesses who thought they were paying an insurance premium. If the debt now needs to be increased by a billion or two in order to see workers and families through the tough times it’s only fair Mr. Flaherty get off his high horse and pony up.

But of course he won’t and the reason is simple.

Any increase in EI costs would impact the federal budget and debt. If, on the other hand, a large percentage of laid off workers don’t qualify for EI and instead have resort to joining the welfare rolls it’s a provincial cost to deal with and who really thinks Ottawa could give a crap about provincial deficits or crushing debt loads?

So what lessons can we take away from all of this?

1. Canada’s politicians are very concerned about job losses and stabilizing family incomes, primarily their own;

2. Money to bail out corporations in major urban centers and protect tens of thousands of jobs– Good. Money to bail out industries in rural areas and save hundreds of thousands of jobs – Bad;

3. Canada’s growing deficit isn’t the result of large corporate bailouts or unchecked federal spending. It’s being caused by laid off workers who paid into EI and who would now like to collect a little of the insurance they paid for; and

4. No matter how bad things get, or how much they improve, someone will always find a way to crap on Newfoundland and Labrador simply because it exists.

Peter Mackay "Happy" about NL Search and Rescue Services

Just two months after 17 offshore oil workers tragically lost their lives in a helicopter crash off the coast of Newfoundland and Labrador, Federal Minister of Defence, Peter Mackay, said last week that his government will not be looking into changing the way Search and Rescue activities are conducted in Newfoundland and Labrador and that he is, “happy with the current configuration”.

I’d like to suggest to Mr. Mackay that perhaps he should pull on a survival suit and have someone drop him off about a hundred or so miles off the coast on a chilly spring day. After an hour or two of bobbing around, if he’s still breathing, the Minister should once again be asked if he is comfortable with the status quo.

Mr. Mackay’s comments came on the same day that former Chief Justice, T. Alex Hickman, the man who headed up the inquiry into the Ocean Ranger disaster, reiterated his concern about rescue services in the area and called once again for an improvement to those services.

Mackay's comments also came after a Cougar Helicopters spokesperson informed the public that Cougar, which runs the closest commercial rescue helicopters to the Province's offshore oil platforms is incapable of performing night rescues. A service that can be performed by Search and Rescue choppers which are not stationed near the oil fields and are not available for immediate response during the overnight hours.

Nobody is saying that any of the seventeen people who died during the recent offshore helicopter crash would have survived if Search and Rescue services had been faster but one thing is for certain. At the time of the crash there was not a single Search and Rescue helicopter in the Province. They were all away on training exercises in Nova Scotia.

The lone survivor was rescued by a Cougar Helicopter crew.

In my day one and one always equaled two.

In this case it's pretty clear that had that terrible crash happened at night instead of in the morning, the death toll would have surely included another name.

Luck and good timing are not the kind of "configuration" most of us would want to depend upon for our survival if we were the ones suddenly faced with a life expectancy of hours or even minutes.

For Mr. Mackay to say he's OK with the practice of allowing Search and Rescue to leave the Province without any service while conducting training is callous at best. To say it's acceptable that rescue crews are available "on call" after regular business hours (4 pm) while knowing full well that the private sector backup option cannot operate at night, is nothing more than cold hearted, disgusting and neglegence of the highest order.

The Minister's attitude is a slap in the face to the family of every person who has died at sea in recent years.

In the latest tragedy off Newfoundland and Labrador's shores nobody can directly point to an impact relating from the poor level of service being offered by the federal government but there are other cases where its been shown that even a reasonable level of service would have saved lives.

I’m sure in all these cases the people of Newfoundland and Labrador and especially the families of the victims involved, will find it hard to understand Mr. Mackay’s cold and callous position on this.

I began this article by suggesting that Mr. Mackay might benefit from spending a little time bobbing around the North Atlantic in a survival suit. I’d like to retract that statement and suggest instead that the Minister of Defence try it in February, without a survival suit, after dark, on a weekend while Search and Rescue crews are away on training.

In doing so he might actually accomplish something worthwhile for his Country, if only once.