Thursday, July 17, 2008

Cap in hand.

Today NDP environment critic Nathan Cullen is slamming Stephen Harper for effectively putting up the "Gone fishin'" sign while the majority of premiers stare down Stelmach and Wall -- the only premiers still holding out against Canada adopting the regulated cap on pollution that Jack Layton has been calling for.

The NDP's release ends with this thought-provoking line:

“Regrettably, the prime minister’s failed leadership is ignoring that consensus, and St├ęphane Dion’s latest position on carbon taxes runs counter to where the world is going.”

Intersting point. At a time when the majority of provincial governments and Jack Layton are for a cap and trade system why are Stephen Harper and Stephane Dion off-side promoting their own ineffective schemes?

8 comments:

Steve V said...

Wow, you almost had me there, until the release tried to lump the Cons and Liberals together. Yawn.

Steve V said...
This comment has been removed by the author.
Steve V said...

I should post this, just to address the apparent reading comprehension problem that seems to afflict the NDP these days:

"I have always said that a cap-and-trade system is also a good method of pricing carbon and harnessing the market to reduce emissions, and it would be completely compatible with the green shift. We believe that both are necessary and complementary, but that we can move more quickly on immediately pricing carbon through a Green Shift, while building a real cap-and-trade system with absolute targets over time that will fit with the emerging plans of the next U.S. administration and what is already underway in Europe."

Stephen Dion, Greenshift release speech.

Carry on!

Stephen said...

"...we can move more quickly..."

More quickly towards what?

More quickly than what?

And how does Dion know, since his carbon tax plans come with no definite targets and time frames with respect to GHG reductions?

Sean S. said...

shorter Steve V....."trust us"...

ch said...

You are absolutely right that carbon taxes come with a greater uncertainty in emission targets than cap and trade. If the carbon tax is set too low, the reductions may be minor and if they are set too high, the reductions will be large but at the cost of the economy. One uses models to estimate where to set them and then adjusts the price in following years.

Interestingly, the NDP and Liberal plans set similar prices, with the NDP estimating a starting auction of $35/ton and the LPC ramping up to $40/ton over 4 years. Given that the NDP is estimating a 2 year implementation time, this rates are essentially identical averaged over the whole 4 years.

The flip side is that with cap and trade the costs are uncertain and will fluctuate according to various market forces and the actual costs of reducing emissions. This places a larger uncertainty on the economy and, very importantly, a larger uncertainty on the welfare of low-income and middle-income families as these will be hardest hit by any carbon pricing.

One can debate whether you want to take a greater risk on poverty and Canadians who are at risk economically or take a greater risk with the environment by not necessarily meeting specific targets. Typically this depends on where you sit wrt to the left-right divide of the political spectrum, so it is surprising to see the NDP sit on the side of taking risks with low-income families and siding with the method preferred by the US, including the Republicans.

Even many strong environmentalists recognize that the time-frame for climate change is long-term. What is important is what stage we get to in ten years, not exactly how we get there in any one year. Meanwhile, people living in poverty live day to day, not even year to year, and cannot afford to be put at great economic risk. For this reason, many environmentalists who also support attacking poverty, will favour a carbon tax over cap and trade. Furthermore, once a carbon tax is in place, and low-income families receive extra income help through tax cuts and credits, one can put in a more controlled cap and trade in place to achieve the best of both systems.

Steve V said...

"shorter Steve V....."trust us"..."

Nice retort Sean, surely you can do better. It's sort of funny actually, when even John Baird admits that Dion is passionate and committed on the environment, but you can't.

BTW, expect more announcements before the election, he didn't release it all ;)

Stephen said...

BTW, expect more announcements before the election, he didn't release it all

In other words, watch for damage control...