The Liberal Party released their carbon taxation plan today, and I’d say it’s… okay. It does a lot of what a carbon taxation scheme should, of course, but it misses two major points.
Firstly, there’s no tax on gasoline. I understand that gasoline taxes are unpopular, but the lack of a gas tax in a carbon taxation plan when you are taxing literally every other fossil fuel seems like staggering pandering to me. I don’t even think a gas tax is unsellable – say “look, we’re going to tax gas, yes, but the gas taxes are going to be specifically redirected into a fund to improve public transportation so that in five years you can take a hybrid bus from Chilliwack to the Bay of Fundy or from your home to your grandma’s back yard.” The longer you let people think that their old lifestyles are sustainable – and they just aren’t – the harder it’s going to be to tell them the truth.
Secondly, the tax is revenue-neutral, erring on the side of costing a bit of money. I understand that the Liberals want to make carbon taxation as painless as possible by lowering income taxes at the same time. But this idea is flawed for two reasons:
1.) We desperately need massive energy infrastructure investment. Canada has too much oil power generation as it is; we need to replace that with solar, tidal and wind ASAP, and additional revenues created by a carbon tax in the short term could help fund these initiatives.
2.) Carbon taxation in the short run is revenue neutral, but in the long run it is presumably revenue-lowering because given time everybody will find ecological ways to avoid paying the tax. Which is good, but that means eventually you have to jack income taxes back up to compensate. I don’t look forward to the squabbling when that happens.
Still, on the whole, it’s an all-right plan, a solid B+ effort. Could have been much, much worse.
Also: 350.
Related Articles
7 users responded in this post
In regards to your second point: So What?
The purpose of a revenue neutral fiscal policy is to change taxpayer behaviour. It only works if the consumer can improve their tax situation by altering behaviour. Once we alter consumer behaviour, producers must alter theirs, or perish. This is basic first year economics.
Once producers have altered the product lines to environmentally friendly alternatives, the trend is set. Once the fiscal policy has run it’s course and brought about the desired changes, tax increases become irrelevant.
Of course, we’re really talking about trivial sums of money at the individual’s level. A $1000 annual tax cut shows itself in your weekly paycheque as $20.00 cash in pocket, not enough to make a difference in anybody but the very poorest’s lives, and they’re probably not paying taxes, so they won’t get it.
I really think that we freak out way too much about tax increases/cuts. For the most part they don’t matter to the individual.
So, what’s the objection to fission as a currently existing carbon emission free technology? For the future I think that the development of Pebble Bed Fission Reactors and Polywell Fusion show an interesting amount of promise. Both are pie in the sky reactors right now, but fission is currently a tested technology. I agree that oil shouldn’t be used to generate power. Honestly it shouldn’t even power cars. I’d love to see a Drop-In electric motor that could be installed into an existing car that wouldn’t require me to jump on a waiting list for a car I can’t even afford the insurance for.
So, what’s the objection to fission as a currently existing carbon emission free technology?
Fission is extremely expensive. It doesn’t get cheaper with scale; the more fission energy you produce the more expensive it gets. It requires numerous highly trained personnel with tons of expertise and incredibly complex and fine equipement. It has high recurring costs. Fission is dependent on refined uranium and naturally occurring refined uranium is rarer and rarer, meaning you have to process raw uranium, which is energy intensive and environmentally hazardous. Fission has major longterm safety issues – even pebble beds – that we don’t really have the capability to resolve yet. Fission has never been competitive as an energy technology without significant government investment.
None of these apply to solar and wind, and likely tidal once the technology is perfected.
Good points. I’ll freely admit that my fascination with nuclear power is sci-fi boosterism more than anything else. Also, wind, solar and hydro power represents energy that is already “there for the taking” so to speak so not developing the technology is ridiculous.
Just to mention, the reason there isn’t a new tax on Gasoline in Dion’s Green Shift plan is that a Federal tax on gasoline already exists.
From The Star:
Because the existing 10-cent-per-litre federal excise tax on gasoline is already equivalent to $42 per tonne of emissions, gasoline would bear no additional tax.
I love the Liberal carbon “tax”. First, it sure as hell beats “It may be a stinking sulphurous hole now but just you watch it turn around in 2050,” as advanced in the Tory non-plan.
Second, I suspect the reason you don’t see a gasoline tax is that as I understand it Dion intends to shift a portion of the taxes that are already in place on gasoline, rather than adding to the price.
AND he’s gonna drop income taxes to help us deal with the winter heating bills?
Hell yeah!
But this isn’t all that we have to do. I want to see a return to the thrift and anti-waste programs of the late ’70s fuel crisis: drop the speed limit to 90 km/h everywhere. Public information programs on energy efficiency between beer commercials during the playoffs. Drop the thermostat to 63 and put on a sweater… all that jazz.
I’m ready.
Revenue neutral or negative is the right setting for tax changes designed to encourage lower carbon use. While it’s true that there needs to be massive investment in renewables or other non-fossil feul energy sources there’s no evidence that any of it needs to be tax money. In fact the whole point of carbon taxes is that the market will provide the investment to take advantage of the lower taxes on these technologies compared to current ones. If the new stuff still can’t compete even with the carbon taxes then it’s just not worth it (or the tax is too low). There is no reason why money should shift to the government merely because there is a problem.