Sunday, June 29, 2008

Northern premiers reject Dion’s carbon tax gamble: Call for Layton-style investments.

News this week of shrinking ice coverage in the Arctic Circle served once more to show the urgency, particularly in northern parts of Canada of making real reductions in greenhouse gasses.

So it says something that the premiers of the three territories most affected by climate change have come out against Stephane Dion’s $15 billion carbon tax scheme as the wrong answer to a growing problem.

The three leaders savaged the plan for its ineffectiveness and balked at the outrageous price tag for hard pressed northern families.

Yukon premier Dennis Fentie slammed Dion for proposing to increasing prices while having no plan to reduce emissions:

Mr. Fentie said he doesn't believe there's any actual evidence that a carbon tax will result in reducing emissions

“We think there are better ways to deal with this issue than another tax being applied, especially in the North where the cost of goods and services is already predominantly higher than anywhere else in the country.”

Of course, one of the advantages of the cap and trade system Jack Layton is proposing is that it reduces emissions while creating a new revenue stream for green innovation and investment. Northwest Territories premier Floyd Rolland identified that a major benefit over Dion’s tax: “We see instead a more productive or sensible solution to combatting the impact of climate change, such as making strategic investment in alternative energy sources such as hydro electricity, wind power and bio-mass.”

Is it any coincidence then that the only premier left to be in favour of Dion’s plan is the one who happens to be the brother of the Liberal environment critic?

Dion’s carbon tax is unpopular because it puts targets and timelines on increasing prices, instead of decreasing emissions. That’s why the northern premiers are against it, and why Dion now appears lost in the barrens.

4 comments:

Mark Francis said...

"The three leaders savaged the plan for its ineffectiveness and balked at the outrageous price tag for hard pressed northern families."

Cap-and-trade, which is also a Liberal policy (Green Shift page 22; Liberal Carbon Budget, March 2007) will also increase prices. In of itself, however, cap-and-trade offers no financial relief for anyone.

Tax shifting significantly decreased emissions in Sweden. Implemented in 1991, personaltaxes were slashed and a tax as placed in CO2 and sulphur emissions. By 2000 CO2 emissions were 25% less than they would have otherwise been, and were below 1990 emissions levels.

I think you will find that the premiers are really just negotiating. They will want a more regional approach, even though it will damage the policy. You will see the same attempt made when cap-and-trade comes along. Premiers will seek extra allowances and even blanket exemptions. The same thing happened in Europe, and has retarded progress in emissions reductions, especially in the case of cap-and-trade, which is far easier to subvert.

Truthfully, the best approach is a mixed system.

Jennifer Smith said...

One thing Sweden has that we don't: rail service north of the Arctic Circle. I don't know if there are any specific terrain issues here, but I suspect it's more a lack of financial incentive and political will. Just a guess.

Mushroom said...

Jennifer,

Northern rail service will become viable if the penalties for lorry transport become more punitive, just like in Scandinavian countries.

Blogging Horse said...

Mark Francis said: Truthfully, the best approach is a mixed system.

That may well be, but the part of that mix Dion has decided to champion is the least likely to get results and least popular. All told it's a bad package which is threatening public support for carbon pricing at all.

If he were smart, Dion would just get behind Layton's cap and trade plan and start pushing.