The Commons: Now is not the time for subtlety

By Aaron Wherry - Thursday, April 25, 2013 at 6:32 PM - 0 Comments

It was just two weeks ago, asked about Alberta’s carbon tax, that Peter Kent was moved to muse aloud about a contentious and contested topic. “There hasn’t,” he ventured, “been a great deal of subtlety in talking about carbon pricing.”

Perhaps this lack of subtlety is something like the root cause of our current impasse. Or perhaps this is no time for nuance.

The foreign press is now referring to Joe Oliver as the Canadian “oil minister, which is terribly unfair to the trees and rocks and water he is also responsible for making use of. Of a year-old op-ed, Mr. Oliver is accusing a NASA scientist of “crying wolf” and suggesting that James Hansen ”should be chaining himself to a mannequin in Rodeo Drive,” which would be pointless unless the mannequin was itself nailed down. And now another scientist is likening Mr. Oliver to “a Shetland pony in the Kentucky Derby,” who is “making Canada look like a country full of jerks,” which is terribly unfair to at least the three or four of us who aren’t.

It was on something like this note that Mr. Mulcair stood to harangue the government side this afternoon. Continue…

What exactly is Peter Kent’s position on carbon pricing?

By Aaron Wherry - Monday, April 15, 2013 at 9:28 AM - 0 Comments

The Canadian Press notes the recent visits of Alberta Premier Alison Redford and Environment Minister Peter Kent to the Washington, DC.

In separate appearances and meetings, Kent and Redford both stressed that Canada was taking climate change very seriously and that strong measures were in the works to reduce greenhouse gas emissions in the oil and gas sector … Gone was the federal talk about any form of carbon pricing being akin to a carbon tax that would raise the price of everything. Indeed, Kent took pains to stress that while Ottawa likes its regulatory approach to emissions, he was open to provinces setting up their own plans — as long as such arrangements lead to actual reductions in emissions.

So the Harper government might believe that putting a price on carbon is a terrible idea, but it respects provincial jurisdiction enough to refrain from criticizing provincial governments that decide to implement cap-and-trade systems or carbon taxes. That’s an entirely admirable and mature approach to federalism.

Peter Kent explains…

“There hasn’t been a great deal of subtlety in talking about carbon pricing…

LOL.

… There are those carbon taxes where the revenues go into general revenue and do not guarantee the reduction of a single ton of greenhouse gases. (But) Alberta has a tech fund wherein their revenues are focused only, and in isolation, on technology to achieve further ghg reductions than the emitters in that province are already able to achieve.”

Hmm.

Less than a year ago, Mr. Kent ventured that “carbon pricing in any form is a carbon tax.” There would not seem to have been any subtlety left at that point, at least so far as the Conservatives were concerned. A few months later, Conservative MP John Williamson explained that “cap and trade or cap and tax, a price on carbon is a tax on carbon.”

Over the subsequent weeks and months, the Conservatives have repeatedly criticized the NDP’s plan to implement a cap-and-trade system: saying, for instance, that ”a carbon tax like the NDP is proposing would critically hurt Canadian families” and that “the economy would be lost and family would be lost” and that “this costly new tax that will kill jobs, stall the economy and ruin winter” and so on.

So what is Mr. Kent saying now? Is he saying that carbon taxes aren’t necessarily bad? Is he saying that Alberta’s carbon tax is somehow okay or at least somehow less ruinous?

Let’s go back to CP’s report of last Wednesday—when CP paraphrased Mr. Kent as saying the federal government is not against carbon pricing. Here is what Mr. Kent was quoted as saying in that piece.

“I’m saying that carbon taxes where the taxes go into general revenues…

The general “revenue” argument is not new, but I’m still not sure how that matters if, in Mr. Kent’s opinion, any price on carbon is equivalent to a carbon tax and if, as it seems the government wishes to convey, a carbon tax is an inherently bad idea. Unless, again, we’re allowing now that a price on carbon isn’t necessarily a terrible thing…

…, as the NDP’s would, for social engineering, not for the reduction of (greenhouse gases)…

This particular matter of revenue is perhaps an interesting and worthwhile nuance to explore: that any revenue derived from cap-and-trade or a carbon tax should not be used for social programs. If that’s what Mr. Kent means by “social engineering.” This point has been raised in the past: Stephane Dion’s Green Shift used some of the revenue to reduce poverty and Brian Topp raised it as a point of concern during the NDP leadership race.

In 2011, the NDP committed almost all of the revenues from cap-and-trade to what it termed “green initiatives.” And when I spoke with Thomas Mulcair in December, I asked him about this point. He said then that “there has to be an equivalent amount that goes into environmental purposes” and “it has to be concentrated in those provinces, those areas where that money is being generated.”

Is there a possible difference between “environmental purposes” and “the reduction of (greenhouse gases)”? Maybe. But is that suddenly all that remains of this apparent disagreement over the NDP’s cap-and-trade platform?

… that’s something we would consider to be … unworthy,” he said.

So is there a kind of carbon tax that Mr. Kent would consider worthy? Is Alberta’s carbon tax worthy?

The global debate about how to reduce carbon has not really taken a hard look at how effective carbon taxes are in actually cutting emissions, he added.

Fair enough. There are certainly questions to be asked. Which approach would be most effective in reducing greenhouse gas emissions? Cap-and-trade, a carbon tax or regulations. Which would be the most cost-effective and efficient option? Here is Stephen Gordon’s take. Here is Jack Mintz’s take. If Mr. Kent is willing to engage it, there is certainly an interesting debate to be had.

I asked Mr. Kent’s office two questions after reading CP’s story on Wednesday. Here are those questions, with the responses provided.

Does Mr. Kent not categorically oppose all forms of carbon pricing?

Our government has been clear: we will not implement a carbon tax.

And what is Mr. Kent’s opinion of the kind of carbon tax used in Alberta?

With regards to Alberta, the Minister was very clear in the press conference and I refer you to the following statement from the presser on Wednesday: “Well, we’ve been working in terms of our federal sector by sector regulatory process with the oil and gas sector since late 2011. We continue to work with – with the sector, with stakeholders, with the provinces – Alberta and other provinces that are blessed with oil and gas. But I think it would be premature today to talk about where we are.”

These responses didn’t seem to sufficiently explain Mr. Kent’s position on carbon pricing, so I tried again.

The minister is quoted today as saying: “There hasn’t been a great deal of subtlety in talking about carbon pricing There are those carbon taxes where the revenues go into general revenue and do not guarantee the reduction of a single ton of greenhouse gases. (But) Alberta has a tech fund wherein their revenues are focused only, and in isolation, on technology to achieve further ghg reductions than the emitters in that province are already able to achieve.” Is he saying that carbon taxes are not necessarily bad policy?

To that I was told to refer to the previous responses.

See previously: A rough guide to the Conservatives’ carbon tax farce and Great Moments in Farce: The definitive collection

The Harper government’s scandalous carbon-price-paying past

By Aaron Wherry - Thursday, April 4, 2013 at 10:37 AM - 0 Comments

Mike De Souza finds that the Conservatives purchased carbon offsets to account for emissions related to the Vancouver Olympics.

The Harper government paid $226,450 to conserve trees in a British Columbia forest to prevent its activities at the 2010 Vancouver Olympics from contributing to global warming, say newly released internal memos obtained by Postmedia News. The three memos, prepared for Environment Minister Peter Kent, said the money was used to buy certified credits to compensate for about 16,000 tonnes of carbon dioxide equivalent emissions generated from federal employee travel, security, the torch relay and other government activities at the Vancouver Olympics, which were hailed as the first carbon neutral games in history…

The total would be equivalent to paying a carbon tax worth about $13.55 per tonne of emissions. It does not include other credits that were donated and purchased by suppliers and sponsors to make the Vancouver event entirely carbon neutral.

But it gets worse. Not only did the Harper government pay for its emissions, it apparently did so with an official pronouncement of pride in having done so.

Today, Canada’s Environment Minister, the Honourable Jim Prentice, announced the Government of Canada’s commitment to offset federal greenhouse gas emissions for the 2010 Olympic and Paralympic Winter Games.

“Canada is proud to be the first host country in history to help offset the greenhouse gas emissions of its Olympic Games,” said Minister Prentice. “This commitment is one of many ways our Government is contributing to sustainable Games and meeting our global climate change responsibilities.”

Of course, the Olympics occurred in 2010, a year before the Conservatives started criticizing Liberal and NDP plans for cap-and-trade and two years before the Conservatives decided that to put a price on carbon was to wish great suffering upon Canadian families.

That said, the Prime Minister, presumably unaware until now of this price paid, will no doubt now wish to reconsider his generally fond assessment of the Vancouver Olympics. And it is probably a good thing that Jim Prentice quit in November 2010 for he would surely have to resign if he was in cabinet this morning.

The Conservatives on pricing carbon: For it before they were against it before they precipitated it?

By Aaron Wherry - Tuesday, April 2, 2013 at 12:35 PM - 0 Comments

John Ivison explains how the Harper government’s regulations on the oil and gas sector might be implemented.

Mr. Kent was said to be in Alberta last month, meeting with industry executives and there seems to be a broad agreement on both sides. Companies like Exxon, Cenovus Energy and Total are on record as saying a greenhouse gas levy at least brings cost certainty and reduces concern about trade restrictions on oil sands bitumen based on carbon density. While the feds will not impose that tax, their regulations will inevitably lead to a price being placed on carbon…

… eventually, the deal that Mr. Kent is currently negotiating will be released for public discussion. What is it likely to look like? One thing is certain — Ottawa will not be imposing directly anything that walks, talks or quacks like a carbon tax. The most likely scenario would see Ottawa set a target for large emitters across the country. Then, provincial governments would create mechanisms to meet those targets, via a carbon tax or cap and trade system.

And yet.

For their part, the Harper Conservative are intent on basing the next election campaign message around the NDP’s “dangerous” new taxes and spending schemes.

So, under this scenario, the Conservatives, who promised and advocated for cap-and-trade while opposing a carbon tax, but then decided that cap-and-trade was the same thing as a carbon tax and proceeded to loudly and repeatedly criticize the NDP’s proposal of cap-and-trade, will soon introduce greenhouse gas emission regulations that will lead the provinces to implement carbon taxes or cap-and-trade systems, but then the Conservatives will maybe still spend the next election campaign criticizing the NDP’s interest in cap-and-trade.

British Columbia and Alberta already have carbon-pricing policies in effect. Ontario is committed to a cap-and-trade system.The Quebec government is moving forward with a cap-and-trade system. Manitoba has already implemented a price on emissions from coal and would like to see a federal system of carbon pricing established. The Saskatchewan government is willing to put a price on carbon. And the Newfoundland government is considering a carbon tax or cap-and-trade system as options.

President Barack Obama favours cap-and-trade. Asked in February what the Harper government would do if the United States implemented cap-and-trade, Joe Oliver said that scenario was a hypothetical he didn’t want to get into.

What does carbon cost?

By Aaron Wherry - Monday, February 25, 2013 at 1:45 PM - 0 Comments

Environment Minister Peter Kent announced the government’s regulations for “heavy-duty vehicles and engines” this morning. For the purposes of determining the benefit of regulations, the government uses something called the “social cost of carbon.” Here is the EPA’s explanation of that calculation. And here is how the Harper government explains the figure in today’s regulations.

The SCC is used in the modelling of the cost-benefit analysis of environmental regulations in a RIAS to quantify the benefits of reducing GHG emissions. It represents an estimate of the economic value of avoided climate change damages at the global level for current and future generations as a result of reducing GHG emissions. The calculations of SCC are independent of the method used to reduce emissions. The SCC is also used by the United States in their costbenefit analysis of regulations. The values used by Environment Canada are based on the extensive work of the U.S. Interagency Working Group on the Social Cost of Carbon.

The estimated value of avoided damages from GHG reductions is based on the climate change damages avoided at the global level. These damages are usually referred to as the social cost of carbon (SCC). Estimates of the SCC between and within countries vary widely due to challenges in predicting future emissions, climate change, damages and determining the appropriate weight to place on future costs relative to near-term costs (discount rate).

SCC values used in this assessment draw on ongoing work being undertaken by Environment Canada in collaboration with a federal interdepartmental working group, and in consultation with a number of external academic experts. This work involves reviewing existing literature and other countries’ approaches to valuing GHG emissions. Preliminary recommendations, based on current literature and, in line with the approach adopted by the U.S. Interagency Working Group on the Social Cost of Carbon, are that it is reasonable to estimate SCC values at $28.44/tonne of CO2 in 2012, increasing at a given percentage each year associated with the expected growth in damages. Environment Canada’s review also concludes that a value of $112.37/tonne in 2012 should be considered, reflecting arguments raised by Weitzman (2011)14 and Pindyck (2011) regarding the treatment of right-skewed probability distributions of the SCC in costbenefit analyses.16 Their argument calls for full consideration of low probability, high-cost climate damage scenarios in cost-benefit analyses to more accurately reflect risk. A value of $112.37 per tonne does not, however, reflect the extreme end of SCC estimates, as some studies have produced values exceeding $1 thousand per tonne of carbon emitted.

As shown in Figure 3 below, the social cost of carbon values increase over time to reflect the increasing marginal damages of climate change as projected GHG concentrations increase. The time-varying schedule of SCC estimates for Canada has been derived from the work of the U.S. Interagency Working Group. The federal interdepartmental working group on SCC also concluded that it is necessary to continually review the above estimates in order to incorporate advances in physical sciences, economic literature, and modelling to ensure the SCC estimates remain current. Environment Canada will continue to collaborate with the federal interdepartmental working group and outside experts to review and incorporate as appropriate new research on SCC into the future.

For the purposes of the cost-benefit analysis, the government appears to use the $28.44/tonne projection to project $500 million in savings.

For those worrying about the price of Thanksgiving turkey, the new regulations carry about $800 million in technology costs (that will be passed on to consumers) and another $4.8 billion in projected fuel savings.

What I suspect is necessary for a real debate on greenhouse gas emissions policy is a cost-benefit analysis that compares the Harper government’s regulations and the NDP’s cap-and-trade proposal.

The Peter Kent school of journalism

By Aaron Wherry - Tuesday, January 22, 2013 at 8:00 AM - 0 Comments

The Environment Minister pointedly objects to a story by Mike De Souza* by suggesting that De Souza is an “environmental activist” who favours a carbon tax. Here is the full letter, as printed by the Windsor Star on January 4.

I am writing to clarify a few points from Mike De Souza’s Dec 24 article regarding the federal government’s proposed regulations to reduce greenhouse gas emissions from light-duty vehicles. Our government is committed to protecting the environment and reducing greenhouse gas emissions while minimizing the economic impact on Canadians. We are working with the United States to develop GHG regulations that reflect the highly integrated North American auto sector, which includes thousands of Canadian manufacturing jobs.

Mr. De Souza, like most environmental activists, believes that a carbon tax is the only answer to combat climate change. Our government is fundamentally opposed to broad-based carbon tax schemes like the NDP’s $21-billion plan to tax everything without links to environmental benefits.

Canada has undertaken a sector-by-sector regulatory approach to reducing greenhouse gas emissions. Under our plan, industrial sectors are forced to reduce carbon emissions at the smokestack or tail pipe by developing and deploying innovative technology.

Ours is the first Canadian government to reduce greenhouse gases and we will continue act in Canada’s environmental and economic interests.

PETER KENT, federal Environment Minister, Ottawa

Mr. Kent writes that he’d like to “clarify a few points” about the story, but he doesn’t actually identify any particular parts of the story that he objects to. De Souza’s story is a reporting of the costs associated with the government’s new fuel economy standards as those costs are identified and explained by the Harper government in the Canada Gazette. I linked to that cost-benefit analysis here on December 8. And some of those costs were noted when Mr. Kent announced the regulations in November.

The minister’s letter refers to the NDP proposal as a carbon tax. More specifically, the NDP has proposed a cap-and-trade system. This is a bit of a thing. Mr. Kent, for instance, was first elected as a Conservative in 2008, when the party’s platform included a promise to pursue a cap-and-trade system—a measure the minister now equates with a carbon tax.

Joe Oliver tried to use a letter to the editor to make the government’s case in November. Ironically, in that letter Mr. Oliver deferred to the judgement of “eminent economist” Jack Mintz. Mr. Mintz supports a carbon tax as the best policy option to reduce greenhouse gases.

*Full disclosure: I’ve met Mike and I think we’ve chatted briefly a couple times, so I guess we’d qualify as passing acquaintances.

Reaching our GHG goals thanks to a price on carbon

By Aaron Wherry - Wednesday, December 5, 2012 at 1:32 PM - 0 Comments

Peter Kent addresses the UN convention on climate change in Doha.

Canada is halfway to achieving our national effort to meet our Copenhagen target. The combined efforts to date of federal, provincial and territorial governments, of consumers and of businesses will generate half the greenhouse gas reduction required to meet Canada’s greenhouse gas target by 2020.

This year’s report on emissions trends, surveyed the federal, provincial and territorial scenes thusly.

In this year’s report, Gross Domestic Product (GDP) is projected to be slightly higher in 2020 than in the previous report (by 0.8%), while GHG emissions are lower (by 5.3%). The projected decline in GHG emissions is thus associated with a reduction in  intensity, implying greater de-coupling between GDP and GHGs. The improvements in  emission intensity are in part due to: i) increased contribution of the services sector,  which typically emits less emissions per dollar of GDP; and ii) actual emissions in 2010 were lower than projected, while actual GDP was higher. The decline in emissions intensity was also due to the fact that consumers and businesses are making more progress in reducing emissions. Government programs are contributing to this by helping to accelerate the adoption of energy efficient technologies and cleaner fuels.

Canada is moving forward to regulate GHGs on a sector-by-sector basis, aligning with the U.S where appropriate. The Government of Canada has started with the
transportation and electricity sectors – two of the largest sources of Canadian emissions – and plans to move forward with regulations in partnership with other key
economic sectors, including oil and gas. Last year’s report included emissions regulations for light-duty vehicles for the model years 2011-2016 as well as an
electricity performance standard to phase-out coal-fired electricity, Alberta’s Specified Gas Emitters Regulation, British Columbia’s carbon tax and Quebec’s carbon
levy. Provincial policies such as Ontario’s phase-out of coal-fired electricity also made important contributions. Projected emissions levels in the 2012 version of the report have further declined, in part through the inclusion of further federal actions on additional emissions regulations for light-duty vehicles for the 2017-2025 period as well as heavy duty vehicle regulations. Recent provincial actions (e.g., Quebec’s capand-trade, Nova Scotia’s emissions cap for electric utilities, increased stringency of building energy codes, equipment standards and requirements for capturing methane from landfill gas) are also included. Total emissions in 2020 are projected to decrease to 720 Mt.

Joe Oliver tries to explain the farce

By Aaron Wherry - Thursday, November 29, 2012 at 11:54 AM - 0 Comments

On Monday, Vancouver Sun columnist Craig McInnes criticized that the the Harper government’s “carbon tax” attacks on the NDP. Natural Resources Minister Joe Oliver has now responded in a letter to the editor.

I am disappointed your columnist Craig McInnes has fallen for NDP leader Thomas Mulcair’s carbon tax boondoggle.

Novel opening gambit.

His plan would raise more than $20 billion in tax revenues from carbon – so it is not inaccurate to label it a carbon tax.

“Not inaccurate” is an interesting turn of phrase. But as we have explained at various points, the reference to revenue is, by the government’s own logic, a red herring. The Conservatives have said that, in their current view, anything that establishes a price on carbon is equivalent to a carbon tax. Therefore, it simply doesn’t matter whether that price results in public revenue or private revenue.

That said, if you want to play along with the idea of government revenue as an important distinction, consider that when John Baird was championing his government intention’s to establish a price on carbon in 2008, he said that industries would pay into a “technology fund.” Here are the details of that proposed fund. Does that count as government revenue?

President Obama recently joined Prime Minister Harper in opposition to a cap and trade system, which Mr. Mulcair supports.

Not quite. President Obama’s press secretary ruled out the possibility of the White House proposing a “carbon tax.” But the President previously proposed a cap-and-trade system. His press secretary’s phrasing—”would”—leaves open the question of whether the President sees a distinction between a carbon tax and cap-and-trade or if, as the Harper government is now trying to argue, Mr. Obama believes the two options are equivalent.

Eminent economists like Jack Mintz say the NDP plan could raise gas prices by 10 cents a litre.

There was some debate during the last election campaign over the precise impact on gas prices, but it’s interesting to see Mr. Oliver defer to the expertise of Mr. Mintz. The eminent economist thinks a carbon tax is the best approach to reducing GHG emissions.

Canada’s trucking industry also came out against a carbon tax because it would raise prices on the goods they transport. Mulcair’s NDP’s carbon tax will raise the price of everything, including gas at the pump, groceries at the checkout counter and electricity in your home. We simply can’t afford Mulcair’s NDP.

The regulations Peter Kent announced earlier this week will raise the price of cars. The government’s regulations for the coal-fired electricity sector will raise the price of electricity. And the Conservatives still have to announce their regulations for the oil and gas sector.

By the way, I remain happy—eager, even—to sit down with Mr. Oliver or Mr. Kent to discuss all this at the earliest opportunity.

(For whatever it matters: Craig’s column referred to my writing on the subject, but I don’t believe Craig and I have ever met, spoken or otherwise interacted. If we have crossed paths at some point in the past—and I’m simply forgetting that—I can categorically say that we didn’t speak or interact in regards to his column before it was published.)

See previously: Peter Kent tries to explain the farce

Why does Peter Kent want you to pay more for a car?

By Aaron Wherry - Wednesday, November 28, 2012 at 9:11 AM - 0 Comments

As a result of the greenhouse gas emissions regulations announced yesterday, the purchase price of cars will increase.

Officials estimated the cost of an average car would climb by $700 in 2021 and by $1,800 by 2025 when the rules would be fully phased in, though some industry analysts say the price tag could be as much as $5,200 per vehicle depending on the technology needed to achieve the efficiency gains. But Canadian officials also say the motorists would save $900 annually in fuel costs at today’s gasoline prices…

The Center for Automotive Research , an auto industry think-tank based in Ann Arbor, Mich., estimates the cost of the average new vehicle will rise by $5,200 in 2012 dollars as auto makers add expensive new technologies to meet the higher miles per gallon standard. “The [auto makers’] research and development departments tell us the true cost is more like $10,000 per vehicle by 2025,” Sean McAlinden, CAR’s executive vice-president of research and chief economist said Tuesday.

The new regulations follow current regulations that will also increase the purchase price. The Canadian regulations are modelled on the American regulations, which Eduardo Porter questioned in September.

What the government didn’t mention is that these improvements come at a high cost for drivers, automakers and society in general. They could be achieved much more cheaply by raising taxes on gasoline to a level comparable to that of pretty much every other industrialized nation. The new mileage rules are so expensive, in fact, that even if one factors in all the expected gains from the policy — like less damage from climate change and fewer deaths from respiratory disease — many economists think that the costs actually outweigh the benefits.

The reason is fairly straightforward. Fuel-efficiency standards do not really change drivers’ behavior in a helpful way. Gas taxes do. Consider how a gas tax would work. Because it would make gas more expensive at the pump, we would drive less. When time came to replace the old family S.U.V., we would be more likely to consider a more fuel-efficient option. As more Americans sought gas-sipping hybrids, carmakers would develop more efficient vehicles.

Peter Kent’s speech yesterday announcing the changes is here.

What will the Harper government’s regulations cost?

By Aaron Wherry - Tuesday, November 27, 2012 at 12:19 PM - 0 Comments

Megan Leslie writes to the Environment Minister to inquire about what projections and analysis are guiding the Harper government’s environmental policies.

The very basis of your government’s decision-making on this file has been called into question by your inability to provide essential information on cost. Your government’s understanding of the risks to Canada’s economy and the well-being of Canadians has been called into question by your lack of transparency respecting the projected impacts of climate change.

Sound policy decisions must be based on good science and good accounting. You and your government have failed to show evidence that you are meeting this standard. Similarly to your decision to withdraw from Kyoto, your plan to reduce greenhouse gas emissions has been roundly criticized as inefficient, ineffective and more costly over the long term than other plans. With the latest round of international climate negotiations taking place in Doha, Qatar this week, this information is even more pertinent.

See previously: By how much will Stephen Harper raise the price of your Thanksgiving turkey?

Peter Kent takes a stand against mischaracterization

By Aaron Wherry - Wednesday, November 21, 2012 at 9:23 AM - 0 Comments

The NDP quizzed the Environment Minister yesterday on the cost of the government’s regulatory approach to GHG emissions.

Anne Minh-Thu Quach: Mr. Speaker, in committee yesterday, the Minister of the Environment responded to one of my questions with a trivial statement. When I asked him about the cost of the ineffective sector-by-sector approach adopted by the Conservatives to reduce greenhouse gas emissions, the minister said that the figures were not important. Let us be clear: either the minister has no idea of the cost of his policies, or he wants to hide it. Since I like to be courteous, I will give him another chance. How much is the Conservatives’ sector-by-sector approach going to cost taxpayers?

Peter Kent: Mr. Speaker, that is a slight mischaracterization of our exchange yesterday in committee. Our sector-by-sector plan to reduce GHG emissions started with the regulation of the two sectors that contribute the greatest number of megatonnes every year: tailpipe emissions and coal-fired electricity. The cost-benefit estimates of those regulations can be found on the Environment Canada website with the regulatory impact assessment statement.

Megan Leslie: Mr. Speaker, a mischaracterization? We have the transcripts. The minister seems to know a lot more about made up NDP policies than he does about his own portfolio. Experts confirm that his sector-by-sector approach is not working. It is the least effective and the most expensive approach to GHG reductions. Six months ago we asked the minister how much the plan costs. There was no answer. Yesterday, he said that to him the numbers really are not that important. Is the minister hiding the answer or does he really not know the cost?

Peter Kent: Mr. Speaker, obviously my colleague was not listening to my previous question and was not in attendance at the committee meeting yesterday. The first two sectors have been regulated. The cost-benefits are available. A total number cannot be given until we regulate all of the other sectors in our sector-by-sector plan. The number that Canadians are interested in is the proposed $21 billion carbon tax that the NDP would pick out of the pockets of hard-working Canadian taxpayers.

We looked last month at the costs known so far. Below is the exchange between Ms. Minh-Thu Quach and Mr. Kent at Monday’s meeting of the environment committee. Continue…

How to rule out cap-and-trade without quite ruling out cap-and-trade

By Aaron Wherry - Tuesday, November 20, 2012 at 9:28 AM - 0 Comments

Lobbed a friendly question yesterday afternoon, Joe Oliver stood in the House and declared as follows.

I am pleased to announce that, although the United States is adopting a carbon tax, which the American administration did not say it intended to do, our government will never do so in Canada. We will never adopt the NDP’s $21 million carbon tax, which would cause job losses and increase prices overall. We will continue to lower taxes and stimulate job creation.

Now, moments earlier, Eve Adams had reported to the House that the Obama administration was steadfastly against a carbon tax, so maybe Mr. Oliver had received urgent news to the contrary or perhaps he misspoke. Nonetheless, here was the Natural Resources Minister declaring that the Harper government would never adopt a carbon tax.

So never mind apparently what that Stephen Harper fellow said in 2009. And set aside, in this case, the importance of harmonizing our environmental policies with the United States.

Except that this isn’t quite a definitive statement.

Peter Kent apparently repeated the pledge—”The prime minister has made it very clear that we will not consider a carbon tax”—to reporters after yesterday’s meeting of the environment committee, but what does that mean? (That story references cap-and-trade, but the only quote from Mr. Kent refers to a carbon tax.) Is the Harper government using the definition of a carbon tax that it recognized in 2008 and 2009 (in which a carbon tax and cap-and-trade were distinctly different policies) or the definition the Harper government has been using over the last year (in which a carbon tax and cap-and-trade are exactly the same policy)?

When I asked Mr. Kent’s office in June about the impact of American policy, I seemed to be told two things: that the possibility of cap-and-trade was a hypothetical for which no clear answer could be provided and that the Harper government would not impose a carbon tax.

When I asked Mr. Oliver’s office in September, there seemed to be the same distinction: the Harper government would not adopt a carbon tax, but it was not in a position to comment on the possibility of cap-and-trade.

So that Mr. Kent and Mr. Oliver are declaring that the Conservatives will never implement a carbon tax is not new. But what about “cap-and-trade?” What about any policy that establishes a price on carbon? Anything short of an explicit vow on those explicit grounds leaves ambiguity.

Great Moments in Farce: The definitive collection

By Aaron Wherry - Monday, October 15, 2012 at 8:00 AM - 0 Comments

Most of these quotes have appeared here at one time or another over the last year and a half, but in case you were looking for something you could frame and hang on the wall, here in one place are the greatest moments in the Conservatives’ carbon tax farce.

Conservative party platform, 2004 election. A Conservative government will implement the commitments of Stephen Harper’s February 2004 paper, “Towards a Cleaner Canada,” including … Investigate a cap-and-trade system that will allow firms to generate credits by reducing smog-causing pollutants.

Bob Mills, June 8, 2005. Unlike the smog blind Liberals, the Conservative Party of Canada has a real plan to deal with air pollution. We will legislate caps on smog-causing pollutants like nitrous oxide, sulphur dioxide and volatile organic compounds. We will also propose a cap and trade system within Canada that will give companies incentives to actually reduce smog-causing pollutants.

Mark Warawa, November 2, 2006. Nothing prevents the Montreal Exchange from establishing a carbon credit along the lines that currently exist in Chicago. The notice of intent that we released last week explicitly mentions carbon trading as one of the issues we will be consulting on. 

Mark Warawa, November 27, 2006. Mr. Speaker, actually the environment minister had very good meetings with her international counterparts and they were establishing a workshop that will be held within weeks. The EU, U.K. and United States will all be participating in discussions on carbon trading.

John Baird, February 8, 2007. A carbon trading system is certainly up and running in the European Union, whereas a carbon tax…. I suppose it would depend on what kind of proposal you were making. It would be in the eye of the beholder.

John Baird, February 8, 2007. I will tell you that when it comes to compliance mechanisms, domestic carbon trading for the private sector is something we’re open to and looking at. A number of colleagues have pushed me on the idea of the Montreal exchange, as have Toronto and other areas. It’s something we’ll be coming forward on in short order when we release our industrial targets.

Mark Warawa, February 12, 2007. Mr. Speaker, as we have said, and as I have told the hon. member many times, we are open to domestic carbon trading, to looking at it…

Mark Warawa, March 27, 2007. I was quite surprised by some comments made by Mr. Cullen, unaware apparently…. Hopefully, he has read the Clean Air Act. Under clauses 29 and 33, it very clearly talks about carbon trading. It’s on pages 28 and 29. So carbon trading has always been part of the Clean Air Act. The market should decide where that trade will occur. So it is already part of the Clean Air Act…

Stephen Harper, June 4, 2007. Of course, it may not be possible for all countries, or all industries and firms within all countries, to reduce their emissions by the same amount on the same time line. That is why other compliance measures such as carbon offsets and carbon trading are also necessary. They are part of Canada’s plan and, provided they are not just an accounting shell game, they must be part of a universal, international regime.

Mark Warawa, November 29, 2007. We need to look at solutions, and this government is committed to solutions, solutions such as energy efficiency, renewable fuels, carbon capture and storage, a domestic carbon trading market.

John Baird, January 7, 2008. We’ve got to put a price on carbon. We’re doing just that.

John Baird, January 11, 2008. Our plan also will require big industry to pay into a technology fund starting at $15 per tonne of carbon, putting a price on carbon for those who emit the most.

Conservative party policy declaration, 2008. We support a domestic cap-and-trade system that will allow firms to generate credits by reducing smog-causing pollutants.

Jim Flaherty, February 26, 2008. Our government is also providing $66 million over two years to lay the foundation for market based mechanisms that will establish a price for carbon and support the development of carbon trading in Canada.

Ted Menzies, February 27, 2008. In budget 2008 we are taking further action to fulfill our commitments to a cleaner, healthier environment. For example, budget 2008 is committing $250 million for carbon capture and storage projects. Furthermore, our government is providing $66 million over two years to lay the foundation for market-based mechanisms that will help establish a price for carbon and support the development of carbon trading in Canada.

Mark Warawa, March 31, 2008. Our plan includes setting up a carbon emissions trading market, including a carbon offset system, to provide incentives for Canadians to reduce greenhouse gas emissions. We’re providing industry with the tools it needs, the tools of a domestic carbon market, and we’re also establishing the market price of carbon. We’ve heard from industry, we’ve heard from environmental groups, and we’ve heard from our international partners that these are necessary parts of the plan, and they are now part of a plan.

Stephen Harper, May 29, 2008. Canadian industries that do not meet their emission reduction targets will be required to do one of three things.  They will have access to a domestic carbon trading system which will include offset credits for non-industrial practices that reduce emissions.  We eventually hope to participate in a North American trading regime, depending on what action the United States takes, and I’ll talk about that in a second.  We likewise hope to participate someday in a more mature and robust emissions trading regime internationally.  As well, industries will have access to credits through the United Nations Clean Development Mechanism … I should mention that while our plan will effectively establish a price on carbon of $65 a tonne, growing to that rate over the next decade, our Government has opted not to apply carbon taxes. 

John Baird, May 30, 2008. “As Canada’s Environment Minister, I am pleased to be in Montreal today to celebrate the opening of the Montreal Climate Exchange,” said Minister Baird.  “Carbon trading and the establishment of a market price on carbon are key parts of our Turning the Corner plan to cut Canada’s greenhouse gases an absolute 20% by 2020.  Clearly, our Government’s action to fight climate change is working hand in hand with groups like the Montreal Climate Exchange.”

Conservative party platform, 2008 election. We will work with the provinces and territories and our NAFTA trading partners in the United States and Mexico, at both the national and state levels, to develop and implement a North America-wide cap and trade system for greenhouse gases and air pollution, with implementation to occur between 2012 and 2015.

Stephen Harper, June 20, 2008. Prime Minister Stephen Harper pulled no punches on Friday in describing a carbon tax proposal by Liberal Leader Stéphane Dion, saying it would “screw everybody” across Canada.

Stephen Harper, September 11, 2008. The Liberals’ carbon tax plan will plunge Canada into recession, sparking economic unrest that will revive Quebec’s separatist movement, Prime Minister Stephen Harper says.

Throne Speech, November 19, 2008. We will work with the provincial governments and our partners to develop and implement a North America-wide cap and trade system for greenhouse gases and an effective international protocol for the post-2012 period.

Jim Prentice, January 27, 2009. It is right there in black and white in our platform, and we have now made a commitment in this area. We will implement a North American cap and trade system for greenhouse gas emissions and atmospheric pollution, and we will reduce greenhouse gas emissions by 20% by 2020.

Jim Prentice, February 12, 2009. Canada, in the North American context, has some of the most significant hydro possibilities that remain to be developed, and once a price is put on carbon, many of those hydro projects will become quite competitive.

Jim Prentice, June 10, 2009. The offset system will be a key part of that overall commitment.  It is intended to generate real reductions in greenhouse gas emissions by providing Canadian firms and individuals with the opportunity to reduce or remove emissions from activities and sectors that will not be covered by our planned greenhouse gas regulations. It does so by establishing a price for carbon in Canada – something that has never been done before in this country.

Briefing note for Jim Prentice, September 11, 2009.  “I think you would agree with me that encouraging businesses and individuals to change behaviour requires appropriate price signals … We believe that a carefully designed cap-and-trade system will send the appropriate price signals to encourage changes and ultimately help reduce emissions.”

Stephen Harper, October 14, 2009. “There will be compliance mechanisms that set a price on carbon but obviously that will come into effect when we have continental or perhaps even an international cap and trade regime.”

Jim Prentice, December 2, 2009. Our policy is simple, to enter into an agreement with the major emitters in Copenhagen and to harmonize our targets and regulations with our partner, the United States, while establishing a carbon trading system.

Jim Prentice, December 3, 2009. The Leader of the Opposition reinforces this government’s strategy for a national cap and trade system that will include absolute caps, put a price on carbon, and be structured so it can be harmonized with a future United States system.

Harper government news release, December 2009. The Harper Government is working in collaboration with the provinces and territories to develop a cap and trade system that will ultimately be aligned with the emerging cap and trade program in the United States.

Peter Kent, May 19, 2011. “There’s no expectation of cap-and-trade continentally in the near or medium future and we don’t believe that it would be wise to go with a shallow market in a closely integrated continental economy,” Kent said. “It can always be something to consider in the future.”

Mark Warawa, December 5, 2011. Mr. Speaker, Europe addressed the issue of the price of carbon continentally. We have said that we will deal with the issue of a cap and trade agreement continentally, if the United States does the same thing continentally. 

Peter Kent, June 18, 2012. Carbon pricing in any form is a carbon tax…

John Williamson, September 17, 2012. Cap and trade or cap and tax, a price on carbon is a tax on carbon. That makes it a carbon tax.

Cathy McLeod insists on the presence of water fowl

By Aaron Wherry - Friday, October 12, 2012 at 2:42 PM - 0 Comments

Via Twitter, Conservative MP Cathy McLeod responds to my post about her understanding of cap-and-trade.

market driven cap + trade vs #NDP planned rev for myriad of gov programs. Hmmm sounds like a duck.

It seems to me that Ms. McLeod is attempting to differentiate between a cap-and-trade system in which the government auctions credits (and thus receives revenue) and a cap-and-trade system in which the government gives away credits. It’s not clear to me at this point that the Harper government ever absolutely ruled out ever deriving any revenue from the cap-and-trade system they proposed and pursued. They very well might have. (I previously sought to confirm this, but forgot to follow up with the official I was dealing with. I’ve just now sent a request to a different government official seeking clarity and documentation and will post whatever I receive whenever I receive it.) For the sake of the historical record, it is a detail worth noting.

But here’s the thing (a thing we explained in our last post): According to Ms. McLeod’s Conservative colleagues, whether or not the Harper government expected to generate any revenue from cap-and-trade is entirely irrelevant. Because cap-and-trade, in any form, establishes a price on carbon. And, so far as the Conservatives are now concerned, anything that puts a price on carbon is a carbon tax.

Peter Kent, June 16. “Carbon pricing in any form is a carbon tax…”

John Williamson, September 17. “Cap and trade or cap and tax, a price on carbon is a tax on carbon. That makes it a carbon tax.”

(Here is Jim Flaherty endorsing a price on carbon in February 2008. Here is John Baird endorsing a price on carbon in May 2008. And here is Jim Prentice endorsing a price on carbon in June 2009. And here, here, here and here Conservatives now lamenting the idea of putting a price on carbon.)

So we’re back where we started. The “revenue” quibble continues to be—according to the Harper government’s own logic—a red herring. And the basic policy that Ms. McLeod and her fellow Conservatives now oppose is still the same basic policy that the Conservative party and the Harper government were proposing and pursuing when Ms. McLeod was a candidate and MP.

I do give Ms. McLeod credit for engaging the discussion. Via Twitter, I asked her a follow-up question and will post any response she offers.

Here again is everything you need to know about the Conservatives’ carbon tax farce.

By how much will Stephen Harper raise the price of your Thanksgiving turkey?

By Aaron Wherry - Wednesday, October 10, 2012 at 8:00 AM - 0 Comments

Last week, Conservative MP Kellie Leitch warned that a cap-and-trade system would raise the price of “Thanksgiving turkey and potatoes.”

Conceivably this means the Harper government was planning to increase the cost of Thanksgiving turkey and potatoes when it advocated for cap-and-trade in 2008 and 2009. But setting the past aside for a moment, this raises the question of how much the Harper government’s current regulatory approach to greenhouse gas emissions is expected to raise the price of Thanksgiving turkey and potatoes. I asked Peter Kent’s office that question last week and received the following response.

The government’s regulatory approach to the reduction of green house gas emissions is not designed to generate revenues and for the most part are not expected to raise costs on Canadians. Given the example of light duty vehicles, the increased fuel efficiency will save Canadians money over the life of their vehicle.

(As noted previously, the mention of “revenues” is a red herring.)

As CP explained last month, the costs and benefits have been estimated for the regulations announced so far. Benefits for the passenger automobile and light truck regulations, as Mr. Kent’s office notes, include ”pre-tax fuel savings, reduced refuelling time, additional driving, reductions in criteria air contaminant (CAC) emissions and reductions in GHG emissions.” But there are also about $4 billion in costs, including costs that will be directly imposed on the consumer.

The proposed Regulations are anticipated to increase the cost of manufacturing passenger automobiles and light trucks. These costs are expected to be passed on directly to consumers purchasing these vehicles, and will add an additional $89 to the average purchase price of a 2011 model year vehicle, and an additional $1,195 to the average purchase price of a 2016 model year vehicle (less than 5% of the average purchase price). The benefits resulting directly from the proposed Regulations include fuel savings of approximately 28 billion litres over the lifetime of the vehicles of 2011 to 2016 model years. It is estimated that the added costs to these vehicles would be more than offset by pre-tax fuel savings with a payback period averaging less than 1.5 years.

Regulations for the coal-fired electricity sector will carry about $16.1 billion in costs. Again, those costs are expected to eventually (and gradually) be passed on to consumers.

The gradual phase-in of the Regulations defers most of the price effects to beyond 2020. This moderates the impact on consumers, and results in the share of household budget spent on electricity remaining relatively constant.

In the residential sector, the average annual change over the analytical period in residential electricity prices as a result of the performance standard is expected to have the greatest impacts in Alberta (1.61 cents per kilowatt hour [kWh]), Saskatchewan (0.74 cents/kWh), and Nova Scotia (0.76 cents/kWh). It is expected that the price increases from the Regulations will be passed on to consumers in proportion to their consumption. Households that consume more (or less) than the average would pay proportionately more (or less) of the total costs.

The Regulations will also have a similar impact on electricity prices in the industrial sector with average annual changes in electricity prices of 1.61 cents/kWh in Alberta, 0.82 cents/kWh in Saskatchewan, and 0.76 cents/kWh in Nova Scotia. These incremental price increases are not expected to have significant impacts on the industrial sector in Canada. In general, Canada has low electricity rates relative to many of its global competitors, and long-term trends continue to show that the sector is using less energy for each unit of economic output.

The Harper government still has to determine regulations for the oil and gas sector and other major emitters. Those will carry costs as well. (I’ve asked if a total estimate exists for the Harper government’s regulatory approach and will post that estimate if it is provided.)

But to properly assess cap-and-trade, it is ultimately going to be necessary to both understand how it will be implemented and compare the costs and benefits of such a system to the alternative: specifically, the costs and benefits of the Harper government’s regulatory regime. The potential emission reductions and increased costs of cap-and-trade can’t be evaluated in a vacuum, they have to be judged against the counter proposal. So to use Ms. Leitch’s paradigm, the question on this file for the next three years is this: How much is it going to cost for you to purchase Thanksgiving turkey and potatoes and by how much will greenhouse gas emissions be reduced as a result?

The quiet cuts (that were supposed to be someone else’s fault)

By Aaron Wherry - Tuesday, October 9, 2012 at 9:00 AM - 0 Comments

The Canadian Press obtains the paper trail behind cuts to water-quality sampling in the North.

Speaking in Haines Junction, Yukon, the prime minister quickly doused the controversy by saying the move was “not authorized” and that Environment Minister Peter Kent had ordered water sampling to resume once he found out about it…

But a 600-page internal file on the controversy, obtained by The Canadian Press under the Access to Information Act, shows the officials had in fact received a green light from senior levels at Environment Canada. They also indicate Kent was aware of the proposed cuts weeks before they were implemented.

See previously: The quiet cuts

The existential crisis of the opposition MP

By Aaron Wherry - Sunday, October 7, 2012 at 11:37 AM - 0 Comments

Megan Leslie had a dream last night.

Had the weirdest dream about eye-less zombie children taking over the world. I knew how to stop them, but Peter Kent wouldn’t meet with me.

— Megan Leslie (@MeganLeslieMP) October 7, 2012

I know that seems contrived, but honest-to-God, that’s what I dreamt.

— Megan Leslie (@MeganLeslieMP) October 7, 2012

And on that note, happy Thanksgiving! I’m thankful that I know how to stop dream zombie children from taking over the world.

— Megan Leslie (@MeganLeslieMP) October 7, 2012

Making a farce of Parliament

By Aaron Wherry - Thursday, October 4, 2012 at 4:53 PM - 0 Comments

Between 2pm and 3pm this afternoon in the House, four Conservative MPs—Phil McColeman, Peter Kent, Kellie Leitch and Denis Lebel—combined to make nine references to a “carbon tax.” Mr. McColeman did so during a members’ statement. Mr. Kent did so in response to a friendly Conservative MP’s question about government efforts to clean up contaminated sits. Kellie Leitch did so twice in response to Liberal questions about employment insurance policy. Mr. Lebel did so twice in responding to NDP questions about airport fees.

John Baird also referred to cap-and-trade as a “tax” while responding to a friendly Conservative question about trade policy. (Michelle Rempel oddly failed to use the phrase “carbon tax,” but still accused the NDP of advocating for a “carbon pricing scheme.”)

Yesterday, six Conservative MPs managed to use the phrase “carbon tax.” The day before that it was another half dozen. With one mention yesterday and two today, Ms. Leitch has now used 10 separate interventions to reference the phrase, the most of any Conservative over the last 14 sitting days. With the additions of Messrs McColeman, Kent and Lebel, I count 60 Conservative MPs who have used the phrase at least once in the House.

Here again is the rough guide to the Conservatives’ carbon tax farce. Presumably the Ottawa Citizen editorial board’s question of a few weeks ago still stands.

The Lemonade Stand test

By Aaron Wherry - Monday, September 24, 2012 at 3:42 PM - 0 Comments

As noted, the “revenue” part of the government’s new argument against cap-and-trade is a red herring. But Greg Fingas is willing to respond to it anyway.

Now, keep in mind that this is a minister within the same government which is shutting down and selling off vital public services – depriving countless Canadians of life, limb or livelihood in the process – in the name of deficit reduction. Or, put another way, in the name of closing a gap between expenses and revenue. One might then think that any even faintly competent administrator would consider more revenue to be a plus. And that goes doubly if the increased revenue is paired with a more efficient means of reaching another stated policy goal.

But according to Kent, the Cons’ overriding principle in making government decisions is the glibertarian theory that “revenue = bad”. Which would thoroughly disqualify his party from holding office based on the elementary test of being competent to run a lemonade stand … Moreover, by any reasonable comparison of climate change policies, the Cons would then be choosing to impose higher compliance costs on industry (and ultimately consumers) for the sole purpose of avoiding the “evil” of revenue – even when that revenue would serve to reduce exactly the deficit they claim to be fighting.

Peter Kent tries to explain the farce

By Aaron Wherry - Monday, September 24, 2012 at 8:00 AM - 0 Comments

The Environment Minister talks to Canadian Press.

In an interview with The Canadian Press, Kent said the NDP’s cap-and-trade proposal to reduce greenhouse gas emissions amounts to a carbon tax by definition, simply because it would see the government generating revenue. The opposition party’s election platform from 2011 shows the scheme would see Ottawa collecting $21-billion over four years. “Their $21 billion is an up-front tax. It’s a revenue generator. Ours is not,” Kent said, explaining how he justifies equating a cap-and-trade system with a carbon tax and dismissing both approaches as inferior.

We’ve already dealt with this “revenue” question—by the government’s own logic it’s a red herring. Even if, theoretically, the cap-and-trade that the Conservatives were proposing previously wouldn’t have resulted in government revenue—and it’s not evident to me that that’s what they were proposing—it would have established a price on carbon. And the Conservatives insist—see here, here, here and here—that a price on carbon and a carbon tax are the same thing. Mr. Kent said so himself just three months ago. “Carbon pricing in any form is a carbon tax,” he said.

So three questions remain to be answered. When did the Conservatives decide that cap-and-trade was equivalent to a carbon tax? How do they reconcile their 2008 election campaign now that they believe what they opposed (a carbon tax) and what they proposed (cap-and-trade) are equivalent? And, given how vehemently they now oppose cap-and-trade, why can’t they commit to never implementing a cap-and-trade system in the event that the United States decides to do so?

Kent says the cap-and-trade idea proposed by the NDP is based on a good theory that indeed was once the preferred approach of Conservatives. But he says the party changed its mind because the theory breaks down in practice, and the Conservatives wanted a system that would guarantee emissions reductions. “It’s a great concept and it’s a minor cost of doing business for large companies, but it’s not proven and it’s got all sorts of negatives,” he said.

Here, maybe, could be the basis for a mature discussion about the practicalities of cap-and-trade and the options available. On that count, it is worth noting that the Conservatives have invested heavily in the unproven technology of carbon capture and storage. And the Canadian president of Royal Dutch Shell says carbon capture and storage won’t be adopted widely unless a price on carbon is established.

“Compliance with regulations is a much more tangible concept than a theoretical trading system,” he added.

Many economists also believe regulation is the most expensive way to reduce emissions (at least so long as they’re intended to meaningfully reduce carbon emissions).

The coal rules are not free, however. Federal calculations estimate that the new rules in just that one sector will cost about $16 billion in today’s terms. About half of that is due to increased consumption of natural gas that will be the side-effect of cracking down on coal. But Kent says there is a big difference between those costs and the NDP’s costing of its carbon reduction plan. With the Conservative regulations, the costs are spread out over decades, and none of money goes directly to the government, he explained.

Once again, the revenue argument is a red herring. Otherwise, Mr. Kent seems to concede that the Harper government’s approach is guilty of the primary sin the Conservatives charge against the NDP’s approach: it will ultimately raise various costs for consumers. It just might take longer for the Conservatives to fully implement their approach?

A rough guide to the Conservatives’ carbon tax farce

By Aaron Wherry - Friday, September 21, 2012 at 8:00 AM - 0 Comments

Herein, everything you need to know to understand the Harper government’s latest attempt to attack the NDP.

So what is the basic issue here?

In terms of public policy, this is a debate about putting a price on carbon. There are two ways to do this. You can directly tax major emitters for the carbon they release into the atmosphere. This is generally referred to as a “carbon tax.” Or you can set a limit on the amount of carbon a company can release into the atmosphere and then issue permits to exceed that limit which companies can sell amongst each other. This is generally referred to as “cap-and-trade.” Either way—either set by the government or the open market—a price on carbon is established. And if it costs money to release carbon into the atmosphere, companies will have an incentive to produce less carbon. That incentive will presumably encourage companies to find ways to pollute less (consumers will also presumably have an incentive to seek more environmentally friendly options). And that will presumably help counter the problem of climate change. If the government takes in revenue as the result of a carbon tax or cap-and-trade, that revenue can be used to fund green energy and emission-reducing policies and initiatives, as well as reducing income taxes to counter the impact of the higher costs that impacted companies might pass on to their customers. Here is the Pembina Institute’s briefing on carbon pricing, here is the OECD’s briefing on carbon markets and here is the Environmental Protection Agency’s guide to cap and trade. Here is Wikipedia’s rundown of countries and states that have considered or implemented carbon pricing. And here is Stephen Gordon’s guide to the economics of pricing carbon.

What has the NDP proposed?

In its 2008 and 2011 platforms, the NDP proposed a cap-and-trade system. When he was seeking the leadership of the NDP, Thomas Mulcair presented his own cap-and-trade proposal. (Brian Topp quibbled with Mr. Mulcair on one aspect of Mr. Mulcair’s proposal.)

What do the Conservatives say about what the NDP has proposed?

The Conservatives say the NDP proposal is a terrible, ruinous thing.

That sounds very serious. But your use of the word “farce” seems to suggest something silly is going on here.

You are very perceptive. There are at least three parts to the farce. Continue…

Nuancing the farce, Part Three

By Aaron Wherry - Thursday, September 20, 2012 at 11:24 AM - 0 Comments

The Prime Minister’s Office tries to impose a statute of limitations on what the Conservatives have advocated for while in government.

But what about that 2008 Conservative campaign promise of a cap-and-trade system, similar to the NDP’s?

“That’s the past,” responded MacDougall. “Our 2011 platform stands. So does the NDP’s — and that includes their plan to ‘put a price on carbon.’”

It’s unclear if this means everything the Conservatives said or did before the spring of 2011—including the bits they might conceivably be proud of—is now irrelevant.

Thing is, the Harper government’s stance on carbon pricing isn’t strictly “in the past.” Last year, Peter Kent said a continental cap-and-trade system could “always be something to consider in the future.” In June, Mr. Kent’s office was unwilling to definitively rule out the possibility. Joe Oliver similarly hedged when I put the issue to him this month.

Previous attempts to nuance the farce here and here.

‘The suggestion that the regulations have been softened or weakened is a misperception’

By Aaron Wherry - Thursday, September 6, 2012 at 9:09 AM - 0 Comments

As the Canadian Press previewed earlier this week, Peter Kent has announced regulations for the coal-fired electricity sector that are weaker than what the Harper government proposed a year ago.

The federal government is proposing new coal plants only be allowed if they can emit less than 375 tonnes of carbon dioxide per gigawatt hour of electricity generated. In the final version, that standard is 420 tonnes. The draft regulations proposed that old coal-fired units would have to meet the targets at 45 years old, which has been moved to 50. The final regulations have been criticized by environmental groups as a major weakening of the initial proposal.

Kent defended the changes, saying the government heard more than 5,000 responses during the consultation, which persuaded him that changes were necessary. ”I think the suggestion that the regulations have been softened or weakened is a misperception,” Kent said. “(The regulations) both significantly reduce greenhouse gas emissions and meet 2020 targets and at the same time … make sure we find the balance between responsible regulations and maintaining our still recovering economy.”

More here and here.

Again with the cannibalism

By Aaron Wherry - Thursday, August 23, 2012 at 12:26 PM - 0 Comments

Following Ryan Leef’s flub, Peter Kent also introduces Stephen Harper as the “Prime Minister of cannibal.”

Speaking as the announcement of a new national park in the Northwest Territories on Wednesday, Kent introduced Stephen Harper as the “prime minister of Cannibal” before quickly correcting himself …  the cabinet minister blamed Leef for his flub, telling the crowd the MP had regaled him with his own language mishap prior to the park unveiling.