When Does a Carbon Tax Work?

When it comes to carbon taxes, it's all about pricing. The purpose of the tax is to discourage consumption of fossil fuels thereby reducing greenhouse gas emissions. It seems to work, sort of, but carbon taxes are hindered by a lack of political will, a.k.a. cojones.

So where to set the carbon tax/price bar? According to two influential economists, Nobel laureate Joe Stiglitz and Britain's Nick Stern, a hundred U.S. dollars a metric tonne should do it.

A hun per tonne. That's enough to send Rachel Notley, Brad Wall and, yes, Capt. Selfie into terminal apoplexy. Their blood would boil until their eyeballs popped.

Experts including Nobel laureate Joseph Stiglitz and former World Bank chief economist Nicholas Stern said governments needed to move quickly to tackle polluting industries with a tax on carbon dioxide at $40-$80 per tonne by 2020.

A tax of $100 a tonne would be needed by 2030 as one of a series of measures to prevent a rise in global temperatures of 2C.

In a report by the High Level Commission on Carbon Prices, which is backed by the World Bank and the International Monetary Fund, they suggest poor countries could aim for a lower tax since their economies are more vulnerable.

The aim of a tax on carbon would be essential to meet the targets set by the Cop21 Paris Agreement in 2015, they said.

Wait a second. Our then freshly minted Liberal government was instrumental in formulating that 2015 Paris climate accord.  Justin and Cathy went to the City of Lights to proclaim that "Canada is back." They squeezed every drop of political capital that they could out of that performance and the world cheered them on.

That, of course, was before Canada's enviro-duo said "bugger that, we've got bitumen to sell," at which point all their credibility was rapidly flushed down the political crapper, their false majority government.

There is a way for Justin to redeem his enviro-cred, an export carbon tax on bitumen. Figure out how much greenhouse gas will be emitted from the processing, transportation and end use of that energy and tax it, per tonne, right on the dock. And no cheating. You have to tax the carbon bomb hidden in that bitumen, the pet coke, the high sulphur/high carbon granular coal that comes free with every boatload of bitumen. The end user is going to burn that crud sure as hell and Justin needs to tax every kilo of that stuff.

And what do you think the chances are of any of that happening?

Wait, I'm Pretty Sure I Voted for Some of These People. Haven't You?

Sorry, my bad. I was thinking of horses. These are plainly backbenchers.

There's a proposal to levy carbon taxes on meat and dairy products. The photo shows the carbon emission apparatus.

Surcharges of 40% on beef and 20% on milk would account for the damage their production causes people via climate change, an Oxford University team has calculated. These taxes would then deter people from consuming as much of these foods, reducing both emissions and illness, the team said.

Food production causes a quarter of all the greenhouse gas emissions that are driving global warming, largely from the raising of cattle and other livestock. These emissions are increasing as people around the world become richer and eat more meat.

"Coal Is The Future" - Tony Abbott

Australia's prime ministerial windbag, Tony Abbott, leaves no doubt about where he stands on climate change - it's "crap."  Since coming to power, the now seriously unpopular Abbott has wasted no time boosting coal energy, coal exports and dismembering the country's renewable energy and climate change initiatives.

Here's what Abbott had to say today on the subject of coal.

"For the foreseeable future coal is the foundation of our prosperity.  Coal is the foundation of the way we live because you can't have a modern lifestyle without energy.

"You can't have a modern economy without energy and for now and for the foreseeable future, the foundation of Australia's energy needs will be coal.  The foundation of the world's energy needs will be coal." 

That's about as "in your face" as it's possible to get.  Australia, like Canada, is and will remain a committed climate change pariah.  Count on Australia to support the Harper government in its never-ending efforts to subvert global action to minimize climate change.

Also in today's Guardian is a report on how CO2 emissions have increased since Abbott scrapped Australia's carbon tax four months ago.  The biggest increase comes from brown coal generators in the country's electrical utilities.  Quelle surprise!~

Oil Producing Countries Asked to Levy Carbon Tax on Exports

Oh this will go over well with Ol' Shifty Steve Harper.

A gaggle of poor nations are asking major oil producers to levy a 3-5% carbon tax on oil exported to affluent countries.   The receipts would then be deposited in a "green climate fund" to help the poorest and most vulnerable countries adapt to global warming.

The Ecuadorean president, Rafael Correa, proposed a carbon tax at a summit of Arab and South American countries in October in Peru which included the heads of state and energy ministers of nine of Opec's 12 countries. The Guardian understands the proposal was taken seriously and not dismissed out of hand. The idea was first mooted in 2001 by former World Bank senior economist Herman Daly – leading it to be dubbed the "Daly-Correa tax" – and will be further discussed by Opec countries at the UN climate talks which open on Monday in Doha.

"The first global tax on carbon emissions would achieve the most efficient and just way to do what [the] Kyoto [protocol] has failed to do: make carbon emitters internalise the effects of their actions and pay for the pollution they create," Correa told the summit.

Those Damned Vikings and Their Carbon Taxes

What's wrong with those backwater pinkos in longboats?   Don't they know that socialism doesn't work?   Can't they get it through their Scandinavian skulls that they're supposed to be dying off prematurely in poverty?

Apparently not.

Not only are the Norse awash in Kroner that they're setting aside for future generations, they're also taking serious action on climate change.   Norway has just announced it will be doubling its carbon tax to $24 Cdn per tonne.

Norway will also plough an extra £1bn (Nkr10bn) into its funds for climate change mitigation, renewable energy, food security in developing countries and conversion to low-carbon energy sources, Environmental Finance reported.

It will step up spending on new projects to combat deforestation in developing countries to £44m, taking up its spending overall on forestry programmes to £327m. Previous forestry projects have involved Brazil, Indonesia and Ethiopia.

The Oslo government is also to spend £69m on buying carbon credits in 2013, to help offset its emissions, force through new building regulations to make all new homes carbon-neutral by 2015 and increase efforts to heavily cut emissions from cars, switching to electric vehicles.

Cons Shoot the Messenger

They told the truth the Government didn't want to hear.   They had to go.

"They" are the National Round Table on the Environment and the Economy.   The message advocated introduction of a carbon tax to reduce emissions.   For that the independent advisory group's funding has been axed.

Environment Minister Peter Kent had initially said the reason for the closure was because such research can now be easily accessed through the Internet, and through universities and other think tanks.

But Foreign Affairs Minister John Baird said Monday the shuttering of the round table had more to do with the content of the research itself.

"'Why should taxpayers have to pay for more than 10 reports promoting a carbon tax, something that the people of Canada have repeatedly rejected? That is a message the Liberal Party just will not accept,' Baird said in response to a question by Liberal Leader Bob Rae during question period.

"'It should agree with Canadians. It should agree with the government. No discussion of a carbon tax that would kill and hurt Canadian families.'"

When exactly have Canadians "repeatedly rejected" a carbon tax?  When were they ever given the opportunity?  Dion, in opposition, tried to raise the idea once but it died in an electoral ambush. 

What are these characters, North Koreans?   The entire Harper cabinet functions like a politbureau.  If the message doesn't "agree with the government," it's off with their heads.   What's next, a gulag?  

Like Pissing Into the Wind

One in ten. It doesn't make much difference what you're trying to achieve, if you're scoring 10% it almost always means you have a problem.

The carbon tax has a problem.

It's not so much a problem with the merits of the idea itself or the political hurdles it poses. Its main problem is the guy who says he'll stake all to make it happen - Stephane Dion.

The latest Toronto Star/Angus Reid poll shows that Dion isn't the guy to sell a carbon tax to the Canadian public.

"Liberal Leader Stéphane Dion's approval rating has sunk to its lowest level yet, with nine of 10 Canadians saying they disapprove or are not sure of his performance as the head of the party, according to the latest Toronto Star/Angus Reid opinion poll.

Not since former Liberal leader John Turner bottomed out with a 14 per cent approval rating shortly after losing the 1988 election have things been so bad for the head of Canada's most successful political party. Just 10 per cent of those surveyed stand behind Dion's leadership, the poll shows, compared to 32 per cent for Prime Minister Stephen Harper.

What's worse is that the number of people who said they were unsure about Dion's performance has dropped from 46 per cent at the end of last summer to 30 per cent this month, meaning that Canadians are making up their minds about a leader who has had difficulties rallying his party behind him as well as communicating his party's positions to potential voters.

"What's really disheartening is it's almost as if everyone's made up their minds already," said the polling firm's Mario Canseco. "Those who actually have something to say about Dion are saying negative things."

The online poll of 1,004 Canadians is considered accurate to within 3.1 percentage points, 19 times in 20."

I know this news is going to upset loyal Dion supporters and there are plenty of you among Liberal bloggers. You support Dion, you stand by him faithfully and that's all very nice. What you aren't going to do is get him elected.

The Liberal Party brand is propping up Dion, not the other way around. Canadians' dislike and distrust of Stephen Harper is propping up Dion.

The election may be won or lost on Dion's leadership. Yet he's intent on transforming it into a referendum on carbon taxes. With this pleasant, well-intentioned, intelligent but hapless character at the wheel, Dion may be dooming initiatives such as carbon taxes in a vain attempt to save his own political neck.

We'll have another leader of the party but a loss on a de facto carbon tax referendum may just set back that initiative for years to come, if not permanently. Once the Canadian voters believe they have spoken, it's going to be enormously difficult for another leader to get them to change their minds.

Dion's legacy may be that of a failed leader who gambled on really bad odds and wound up dragging down the environmental initiative with him.

The carbon tax initiative is too important to be put to a referendum by a leader who can't even sell himself.

The good news. Canadians are still waiting for the LPC to come up with a leader they can support. The party can retake the government - only not until it does some essential housekeeping.

Until then it's just pissing into the wind.

The Suzuki Factor

David Suzuki's endorsement of Stephane Dion's carbon tax initiative is a mixed blessing.

Suzuki's outspokeness has made him a bit of a lightning rod for criticism that he's an extremist, a granola munching tree-hugger.

I think Suzuki sees the global warming issue as a politico-scientific challenge. Both sides have to work together like a team of horses or nobody gets anywhere - ever.

If Dion truly has the fortitude to stand behind the carbon tax policy and if David Suzuki genuinely believes there is no other way, the two must work together and very publicly.

For his part, Dion has to show a degree of genuine leadership that's rarely seen in the timid. He must refine his initiative, stand behind it, explain it, defend it and then persuade Canadians that it's not just a nice idea but an imperative.

For his part, Suzuki must use his considerable professional influence to enlist a large body of the best scientific minds in our country to join him in supporting the carbon tax proposal. They need to lend their voices, their credentials to present a solid scientific consensus on the issue. They need to assist Mr. Dion by doing everything in their power to explain the merits of carbon taxation to a sceptical and sometimes ill-informed public.

I think the concept is workable. A lot of the already stated fears are misplaced. For example, there's no reason that home heating fuel cannot be exempted from these taxes. I believe there are similar workarounds for other problems.

That's not to say that carbon taxes won't be felt. Of course they will as they must if they're to work. That's the whole point. The idea is to get people to change their energy consumption habits. If you must commute an hour each way to work, you might want to help us all out by ditching that SUV. Maybe you'll suddenly see the merits of car pooling or mass transit. Maybe jobs will have to relocate closer to the available workforce as has happened elsewhere, relieving already chronic congestion in our metropolitan cores.

Here's another thought. We don't consume energy equitably so why should those who consume substantially more not expect to contribute more in tax? If you want to live in a 4,000 sq. ft. house in exburbia because that's where you can afford that elevated lifestyle, don't complain that it's expensive to clog up the highways commuting downtown to work. That's your choice, live with it. If you want to spend your weekends racing about the lake in your ski boat rather than kayaking, that's your choice, live with it. If the taxes are unacceptable, change your lifestyle. Just don't bitch to me about how you choose to live your life.

Keeping Carbon Taxes Visible

Can a tax aimed at achieving a social objective be effective if it's invisible?

That seems to be a stumbling block on carbon taxes on gasoline. Last week I filled up the VW with regular at a breathtaking $1.27 a litre. That afternoon I saw the price had jumped to $1.32.

That's five cents a litre in the course of as many hours. When I saw that, I sure wasn't thinking of the 3-4 cents a litre carbon tax BC levies. I was wondering where the overall price was going to be six months down the road.

Surely any sin tax is much more meaningful when you recognize you're paying it. But when that sin tax is utterly submerged in much larger market fluctuations, there's an "out of sight/out of mind" element that comes into play.

I support a carbon tax to discourage wasteful use of fossil fuels leading to unnecessary release of greenhouse gases. I'm just not sure the pump is the best possible place to be collecting it when fuel prices are predicted to just keep increasing in the foreseeable future.

It may be there is no better way but I'd like to see someone explore alternatives.

It's A Start

The Netherlands has introduced a new tax on gas guzzlers. Beginning today, buying a Hummer will set you back an additional $28,000 in environmental taxes.

Most high-end, V-8 cars will now cost at least $10,000 more. What remains to be seen is the extent to which this will influence buyers.

"It varies a bit, but if you take the high-end V8 vehicles, it will easily go up by up to 10,000 euros," Mercedes-Benz Netherlands spokesman Hubert Dubbelman said.

But the companies said drivers might continue buying gas guzzlers anyway.

"It is not clear if a customer who is willing to pay 160,000 euros for such a car is affected by the fact that he has to pay 10,000 more," Dubbelman said.