Carbon Tax Politics

For a change, here's a couple of observations on the politics of carbon taxes after watching two elections where it was a fairly significant issue:

Although you might think that making a carbon tax revenue neutral would be an effective tactic to neutralize the ‘tax grab’ line of attack, in practice people seem unwilling to buy into the notion of a carbon tax being revenue neutral.

The B.C. Liberal government, first elected in 2001, has done only one thing consistently throughout it’s 8 years in power – cut taxes. They’ve never shown any desire to increase taxes nor, at the time they introduced the carbon tax, did they have any need to do so. They specifically outlined the measures they would take to ensure the tax was revenue neutral including tracking and regular reporting with adjustments to the offsetting tax cuts as necessary to ensure no extra revenue was collected due to the carbon tax. On top of all that, they have a provincial media which is effectively an extension of their party. It's hard to imagine anyone ever making a more convincing case to an electorate that their carbon tax was indeed revenue neutral. And although it is difficult and risky to assume I know how things would have gone in the counterfactual situation where they did not take these measures, I don’t see that they got much of a payoff from all this effort to ensure revenue neutrality.

One of the bigger risks to support for the tax, both in B.C. and federally, was that other levels of government might come out in opposition, where their area would be hit relatively harder by the tax (for example).

Finally, one of the arguments against the tax from rural residents and people in smaller towns was that they had no option to reduce their carbon usage – where city folk had the option of taking transit, they had to drive everywhere.


So here's a suggestion: Future carbon tax proposals should scrap the notion of revenue neutrality and instead guarantee regional neutrality. Mandate that all revenue from the carbon tax will be returned to the region it was collected from, where it will be used exclusively for public transit development.

Note that this effectively downloads the real decision to local governments which can reduce their own transit funding and substitute in the money they get from the new tax - effectively make the tax back into a revenue neutral one for their area - or use the money for increased transit funding as 'intended'.

Of course it goes without saying that it is dumb to *campaign* on bringing in a carbon tax, that is the type of thing you do in your first or second year of being in charge...

B.C. Election 2009

B.C. will be having an election on May 12, 2009, 8 days from now.

If you want more info on the parties, their platforms, the polls, etc. I recommend Sacha's excellent site.

Personally, I'm not too enthusiastic about this particular election. The Liberal (in name only) party has been in charge for 8 years and although they've moderated some of their more unpleasant views (on aboriginal relations and the environment for example) and they have certainly accomplished a fair bit in terms of infrastructure (albeit by committing the province to a large stream of payments over the next 25 years or so), I'd certainly be happy to see them removed from power.

Under their watch B.C. has seen some of the fastest rising inequality and poverty levels in Canada, and has failed to take care of all of its citizens. Furthermore, the Liberals seem increasingly corrupt and willing to sell off the province's resources to their friends and party insiders and to big business.

Given the huge housing and construction bubble, the perilously low savings rates and the rising inequality, B.C. can be expected to be hammered extra hard by the economic downturn - if the Liberals do win this one, they may get to reap some of what they've sown.

The only alternative likely to be elected is the NDP party. The NDP platform has some good ideas, such as raising the minimum wage and ending/taxing the flaring of natural gas. Still, I can't bring myself to vote for a party that is campaigning on increasing the province's carbon emissions and contributing *more* to one of the greatest threats that mankind currently faces. It is funny in a way that so many people viewed the revenue neutral carbon tax as a tax increase, but even though repealing it will produce just as many losers as putting it in did, you don't hear, for example, residents of downtown Vancouver up in arms about the tax/debt increase they'll have to face due to repeal of the carbon tax that currently benefits them.

The other killers in the NDP platform are the promises to lower hydro bills (again, a move that will increase emissions) and to kill the plan for smart meters. After all, peak oil is another huge threat to our future, so obviously we should cancel plans to modernize our electrical grid and give ourselves a greater capacity to make efficient use of our electricity resources.

It's a great plan really, cancel plans for new electricity production, lower prices to encourage more consumption and kill measures designed to encourage conservation. I don't see any problems with that agenda at all.

Whoever wins will deserve what they get trying to govern this province from 2009 - 2013 (Olympic perks and a whole lot of economic headaches, I predict).

So yeah, I think I'll vote Green. I thought I might vote for the Marijuana party, since legalizing marijuana is one of the most positive changes that could be made by our politicians, but I see that they are endorsing the Greens rather than running their own candidates.

The main thing that will bring me to the polls is the chance to again vote in favour of scrapping our antiquated electoral system and replacing it with one that can actually function in a province with more than 2 political parties - STV. But more on that in another post perhaps - or just visit the blog I wrote back in 2005 the first time we voted on electoral reform. Maybe if we can fix the electoral system we'll have more palatable choices when the next election comes around.

About that Green Shift

As a follow up to my post below, I wonder if Stephen Harper read this New York Times Op-Ed by two prominent right-wing economists calling for the U.S. to adopt a green shift and wondered why his ideological allies were trying to destroy the economy of their own country, or why they referred to the green shift policy Harper had demonized so thoroughly as a 'no-brainer' or why they referred to Harper's own chosen policy as a 'an enormous, hidden, tax increase'.

Update: Credit to Gillian Steward in the Star for picking up the same point. Maybe there is hope for the print media after all ... nah.

Update 2: I almost forgot, in addition to destroying the American economy, the Green Shift proposed by the right wing American economists in the New York Times will also threaten American national unity.

Down With The Print Media

One of these days, I may or may not get around to writing a post on the ongoing decline of the newspaper industry covering topics such as, will newspapers disappear in their current form (yes) and will it be a good thing (probably).

A year ago, I likely would have been more favourably disposed towards the print media, but, as impossible as it might have seemed 12 months ago, the most recent year has lowered my opinion of them significantly.

Two of the main catalysts for this change in attitude were the media treatment of the coalition government (when the media was scared into showing its establishment roots, fronting absurd push polls, calling the NDP commies and screaming for daddy figures to ride to the rescue) and the media coverage of the Green Shift.


For example, consider this from the Globe and Mail's year end / next year look-ahead editorial, "The Liberals were all too happy to accuse the Tories of inaction [with respect to the economic crisis], but did not offer alternative policies so much as the promise of consultation, and refused to move away from their Green Shift plan despite how ill-timed a risky wealth transfer would have been."

"a risky wealth transfer" So, in what way was it risky? In all its coverage, did the Globe identify a single risk from the plan? What might such a risk be? We've had increases in gas taxes over the last 30 years many times, we've had cuts to income taxes many times. As far as I know there hasn't really been any particular risk to such moves.

And also "ill-timed" Why was it ill-timed? Because carbon prices were plunging? But wouldn't that be the ideal time to implement such a shift, to preserve the incentives to conserve? Because the economy was deteriorating? But what difference would the source of taxation matter to the economy - and to the extent that the shift was progressive in nature, wouldn't it mitigate the economic slowdown by putting more money in the hands of those likely to spend it?

The truth is, the person writing the Globe editorial didn't consider these questions. It never occurred to them that to use words that had an actual meaning in reality, they simply were looking to criticize the green shift, didn't want to point out that it was good policy supported by anyone who understood the issues and was unpopular thanks to demagoguing politicians who were amply enabled by the media, and simply picked a few empty words to fill in their sentence such as "ill-timed" and "risky", before moving on the next point.

Consider that this is the Globe and Mail, arguably one of the better newspapers in the country (it's a relative measure), and in their year end summary they have nothing but a few words of offhand, meaningless bs to offer with regard to one of the most important policy debates we faced this year.

As I said, this topic needs a more thorough coverage - I haven't really explained my full thought process in this post, I'm just typing out my impressions. It could be that this is all just sour grapes on my part that a policy I think is a good one was treated with disdain by the media. And maybe newspapers contribute enough of value that they're worth preserving (any suggestions what that value might be?). Or maybe whatever might fill the vacuum if they disappeared (crap like this) would be worse. But more and more I'm convinced that newspapers do more harm than good and that it will be a cause for celebration when they are delivered for the last time.

The Opposite & The Green Shift

George does the opposite:



I was somewhat surprised to see Stephen Harper say the other day that the Liberals proposed shift of taxes from incomes to carbon would "wreak havoc on Canada's economy, destroy jobs, weaken business at a time of global uncertainty."

Sadly, no reporters were on hand, to ask, if increasing taxes on carbon and reducing taxes on income would destroy the economy, shouldn't Harper be raising income taxes and slashing carbon taxes in order to create an economic boom? If he truly believes what he says, isn't he showing gross negligence with respect to the Canadian economy. Given that the economy is currently struggling - couldn't he fix this with a reverse green shift, e.g. black shift?

* * *

Looking forward, the following scenario seems plausible:

1) Conservative party forms the next government
2) Canada goes into recession (we're pretty much in one already)
3) Conservative apologists explain that only a moron would blame the recession on the Conservatives because the federal government's policies are not so influential that they can change the course of the whole economy.

If you're childish like me, it will be fun to throw Harper's comment in the face of Conservative supporters when that time comes.

Green Shift vs. Black Shift

So, the Liberal party is proposing higher taxes on carbon offset by lower taxes on income, with what they are calling the Green Shift. Meanwhile, the Conservative party is proposing lower taxes on carbon, offset by higher taxes for future taxpayers (who will pay interest on the debt not paid off due to the tax cut on oil).

It seems like a pretty clear choice to me, but no doubt the Conservative plan will play well with people who want what is easy now and who don't worry about the future.

Good news day

Some good news for a change in Canada today:

First off, as someone who consumes more than his share of pre-packaged, high-fat food, it's good to see the Canadian government moving to follow the lead of Denmark (and New York fries) and ban trans-fats (for the most part anyway).

There's a great, (albeit somewhat smug) quote from Dr. Steed Stender, the head of the Danish Nutrition Council on the CTV's website on the topic (note: this quote is from before today's decision, back when Canada was still planning mandatory labelling for trans-fats, but no other regulation).

As for the Canadian and U.S. governments' approach, Stender has strong words.

"As they say in North America: 'You can put poison in food, if you label it properly.' Here in Denmark, we remove the poison and people don't have to know anything about trans fatty acids," he says."

Let's just hope they follow through on this and it doesn't die in a cut-off minority session or get watered down by industry lobby groups in the Senate like the bill on animal cruelty.


Second on the good news front, the Ontario government seems to be following B.C.'s lead in appointing a 'citizen's assembly' to study electoral reform.

Let it be known I hereby predict that the assembly will propose a Mixed-Member Proportional system (in contrast to the one in B.C. which recommended STV (Single transferrable vote). Let it also be known that either STV or MMP would be a vast improvement over the current First-Past-the-Post system which was never designed to accommodate anything other than a 2 party system.


Finally, the last piece of good news "Canada will be champion of Kyoto, Dion vows":

Just words so far, but better words than we've heard on the topic in a long time from the Liberals. And coming from someone who just may have the smarts and guts to make it happen. I wish him all the luck in the world.


So that wraps up today's good news. OK, it's true, our civilization is still unlikely to make it to the end of the current century intact but that doesn't mean we shouldn't avoid unnecessary heart attacks, try to prevent the destabilization of the global environment and replace outdated electoral systems in the meantime.

Update (July 17, 2009): So the Federal government still has taken no action on trans-fat, but the B.C. government will limit them starting in September, 2009.

The Ontario citizen's assembly did recommend MMP as I predicted but it was defeated in the referendum. Stéphane Dion wasn't just all talk with his environmental rhetoric, but sadly was unable to form a government as Liberal leader to implement any of it - since 2004 Canada's record on the Kyoto/Climate Change file has been one of, if not the worst in the world.

So much for good news.