Get it? Because red shift means it’s moving away and blue shift -…moving on.
The media has had their take, such as it is, on Dion cum Liberal Party’s submission of a Carbon Tax - dubbed The Green Shift. The variety and veracity of the opinions they publish is astounding - mainly the angry, ignorant semi-bigotry newspapers strut about as if it’s the voice of Canada. I suppose it’s an easier way to dodge things like factual rigor since they don’t need to do all that annoying work like, examining information or understanding complex problems.
I had stopped turning to newspapers for a rational, informed response to world events years ago and The Globe & Mail, National Post et al. have done little to convince me this wasn’t the right decision.
I, despite my misgivings regarding Dion’s leadership, support the Carbon Tax credit in both form and principle. I think, however, there’s some profound misunderstanding of what it all means, how it works and what’s making the Tories so edgy that they’ll send fomenting pack-dog hacks to write letters-to-Ed nationwide.
Most of the opposition to the Carbon Tax premise most of their argument on the two tried-and-true pillars of political sympathy “it’ll hurt the economy” and “it’ll hurt the poor” - I’ll note the rather disgusting notion of separating the two, but this is their logic not mine.
They suggest the Carbon Tax will hurt the economy by making it too damned expensive for our manufacturing and farming sectors to do their work and compete with the unlegislated American producers. Our farmers will then of course have no choice but to shut down and line up at the welfare office, so the logic goes and then we’ll all be out of maple syrup and buffalo.
The same basic story holds true for the manufacturing sector - in this case since most of the big (read automobile) manufacturers in Canada are American companies, these companies won’t want to pay the taxes and will move their factories elsewhere.
Sounds sensical right?
Protecting our farmers has been a serious misstep in Canadian economic history for quite some time. While I sympathize with our yeomen, market realities are what they are and the Carbon Tax does not make or break Canadian farmers; Canadians not buying Canadian farm-goods is breaking the Canadian farmer and they aren’t doing that already. Frankly, I’m tired of my (and your) tax dollars being spent maintaining their polluting machinery so they can continue to under-perform at the grocery store. So it’s a matter of democracy here - a majority of Canadians are not farmers and I don’t think appreciate giving them special treatment over anyone else having a tough time getting paid to work.
Our manufacturing sector is hardly in danger if it opts into less polluting technology which will do two things - make Canada a leader in Green manufacturing and put money into OUR research and development community to spur more efficient manufacturing methods. It’s really expensive to shut-down a unionized plant and set-up a new one and GM is strapped for cash. Toyota is devoted to developing green methods and with the incentives to do so as the Green Shift outlines, it’ll encourage expansion, not reduction of capacity.
Here’s how it’ll play out for GM, Magna etc. They’ve gotta pay this tax, $40 a tonne after four years (adjusted for inflation). So in order for them to shut down the plant this tax has to be greater than the total cost of shutting down the plant (severance pay etc.), building a new one elsewhere and staffing it up, at worst. They could, alternatively, invest in better manufacturing practices to reduce the tax year-over-year and sell this technology to other companies and potentially turn a profit. What would you do if you were GM?
What about the poor? The poor often get trotted out by Conservatives to prove this point or that and then are unceremoniously crammed back in their box when they need to launch policy. In this case many critics suggest that the Carbon Tax will adversely affect the poor.
This just doesn’t pan out - the tax is based on usage is thus progressive. The richer you are the proportionally more carbon you consume - through your SUV, jet-setting, wastefully manufactured goods, etc. While poor people still produce carbon, they do so at a fraction the quantity of the rich (around 25 - 30% the amount).
If one does as The Green Shift suggests and use this policy to shift the revenue from the tax back to the poor you’ve created a virtuous cycle.
The economic argument criticizing the Carbon Tax is arguably the weakest - an economists first resort would be exactly this policy. You tax things that are bad - like pollution, not things that are good - like income; so this is better than some of the things we take for granted (income and property tax).
The danger, some argue, lies in the fact that the Liberals would now have this big chunk of change to squander as they’ve done in the past. (when was the last time a government was hailed as “fiscally prudent” even by their detractors?) Since the plan outlines expenditure as well as collection this is less of a concern, there’s a direct A-to-B correspondence between how the money is gained and spent.
A big issue some of the clever armchair economists argue is the value of our goods in the international market, particularly in combination against our high dollar. The problem with this assertion is it makes the un-motivated assumption that our carbon emission will be static for two reasons. Firstly, no innovation will take place, while this creates a tidy economic model it’s just not the case - especially in Canada. Secondly, the carbon-tax will fail to depress oil consumption because nobody slows down and nobody innovates. The carbon-tax will spur exactly these two activities - that’s what these kinds of taxes do.
Further, our largest trading partner, the United States has both presumptive leaders pledging to put a price on carbon - thus, we might face tariff barriers from the and the EU if we don’t implement Carbon Tax.
The biggest plus for the carbon-tax is the price stability of fuels. Economies aren’t hurt by high-prices they’re hurt by price instability. Carbon-taxes, versus say a cap-and-trade, introduce greater price stability which is probably the best thing for the economy when it comes to fuel.
My issue, perhaps in my rabid cut-throat economic-environmentalism, is that the Carbon Tax doesn’t go far enough. Primarily because it targets exclusively carbon. There are plenty of other emissions just as harmful to our environment which are much more closely associated with our Big Polluters (the 70 worst polluters in Canada). Thankfully, a standard already exists to convert those emissions into equivalent tonnes of carbon, making the application of the tax to them pretty straightforward. This conversion is called the Global Warming Potential (with CO2 being, by definition, 1).
Further is the tacit assumption that the tax will, in four years, bring our carbon emissions to 375 million tonnes - some estimates put our output at twice that level in business-as-usual models.
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