The right use of carbon tax revenue? Sorry, there isn’t one

It never ceases to amaze me that some people can be so utterly certain about the right answer to questions that don’t have simple answers. The answer to “What is one plus one?” is simple. The answer to “How should we use carbon tax revenue?” is not. And for good reason.

To reduce carbon pollution we need to price it or regulate the technologies and fuels that cause it. We could just regulate. We could just price. But we know we have to do one or both to seriously reduce the pollution that causes global warming. After that, the certainty dissipates rapidly as each jurisdiction tries to mesh its carbon pollution policies with its other policy goals, the preferences of its voters, and the actions of its major trading partners.

BC’s carbon tax after 5 years

In 5 years, debates about BC’s carbon tax have generated much heat and little light, but Stewart Elgie and Jessica McClay of the University of Ottawa have just released a good effort to rectify this situation. Comparing fuel consumption (gasoline, diesel, propane, fuel oil, etc.) in BC with the rest of Canada, before and after the imposition of the carbon tax, they detect a significant change. Prior to 2008, BC’s petroleum fuel use changed in lock-step with the rest of Canada. But afterwards it fell 17.4% per capita in BC while rising 1.5% in the rest of the country. They also noted that BC’s economy performed as well or better than other provincial economies, a partial response to the much-touted argument that BC’s economy would suffer terribly because of the tax. (Stephen Harper repeatedly claims that carbon taxes destroy economies, with zero evidence in support – which some people would call lying.)

Alberta’s (Non)-Carbon Tax and Our Threatened Climate

Why is Alberta’s policy a regulation and not a tax?

Alberta’s government officially says it doesn’t have a carbon tax, and I agree. But if I had a dollar for every time I’ve heard someone claim it does, I could buy a lot of anti-oil sands ads, and maybe a politician along the way.

I hear about Alberta’s so-called carbon tax from business people, politicians, journalists, environmentalists, sometimes even economists (who should know better). But the policy in question is, in fact, a “performance regulation,” that sets a maximum “emissions-intensity” for industries, and fines them $15 for each tonne of CO₂ emissions in excess of that maximum.

Why carbon neutrality is a delusion

Here is a link to my brief report written in 2011 entitled "BC’s Carbon Neutral Public Sector: Too Good to be True?"  explaining why carbon neutral government is a delusion and what to do about it. 

*Please note, this document takes between 10-20 seconds to load and you will first get a blank screen.  The file will then load to that screen.  Thanks for your patience! 

Media and climate delusion

In my March 15, 2013 op-ed in the Vancouver Sun I described how promoters of carbon polluting investments and their allies avoid mentioning global warming when trumpeting the benefits of their favorite new coal mine, oil pipeline, tar sands project, coal port expansion, shale gas development, or natural gas liquification plant. My suggestion was that a paper like the Sun should provide a public health disclaimer underneath such articles that says: “The author has declined to explain that, according to scientists, this project would contribute to a climate catastrophe for you and your children.”

I was going to say that surely this is what the paper would do when publishing an op-ed by a tobacco company executive who was encouraging children to smoke. But then I realized that the paper would simply refuse to publish such an article. It would claim that it was not in the business of helping people profit at the expense of public health, especially of the vulnerable.

Some day papers like the Sun will also take this approach to article submissions by promoters of carbon polluting projects. Unfortunately, it is likely to be much too late for a lot of people and other living things, especially the vulnerable – unless, that is, more of us start to demand more from the Sun and other mainstream media.

The Sun editorial of March 21 is a good place to start. In an article entitled “Open port crucial to a healthy economy,” the Sun’s editorial board chastises Vancouver mayor Gregor Robertson for opposing expanding coal and oil exports from Vancouver’s harbor with the facile argument that this will hurt our economy. Note that they never ask what is being exported. All that seems to matter is the volume of exports. Presumably if the exports were cigarettes destined for children, or landmines, or heroin, or plutonium, or carbon-laced fossil fuels like coal, oil and gas, it would not matter. In fact, never do the Sun’s editors even try to explain why Gregor Robertson might oppose coal and oil exports, except to ridicule him for promoting Vancouver as a green city. They avoid mentioning global warming, but make a big deal about Vancouver losing trade to other ports.

In my March 15 op-ed I deconstructed this “climate delusional” strategy, and this March 21 editorial provides a perfect illustration. No doubt there will be many more like it. But if you agree with me that this is an incredibly harmful and irresponsible bias of this newspaper, there are things you can do. For one thing, you can write a letter to the editor explaining that you will soon drop your subscription and will encourage others to do the same if the paper is unwilling to qualify its carbon pollution jingoism with an honest and consistent depiction of the scientifically-determined global health implications of continuing on this path. And you might ask for similar action from the people who are nearest and dearest to you – the very ones you would personally discourage from smoking.

How we can counter the delusional tactics of the carbon polluters

by Mark Jaccard

Originally published in The Vancouver Sun March 15, 2013

Over the past year, readers of The Vancouver Sun have been bombarded with op-eds, columns and editorials that argue British Columbians should accept carbon-polluting projects like the Northern Gateway oil pipeline, but that never explain how to prevent the climate disaster these would cause. The writers of these articles consistently ignore two glaring realities.

First, scientists agree that carbon pollution from burning coal, oil and natural gas must start declining in this decade if we are to limit the global average temperature increase to 2 C, a critical threshold in terms of preventing intensified storms, droughts, ocean acidification, ecological destruction and human suffering. The world's leading politicians, including Stephen Harper, agree that we should not surpass two degrees - which is why he committed Canada to emission reductions of 17 per cent by 2020 and 65 per cent by 2050 (targets that are unachievable with expanded production of oilsands, coal and shale gas).

Second, carbon pollution in the atmosphere is a global "tragedy of the commons." Since virtually all countries must reduce emissions to prevent a disaster, proponents of the next carbon-polluting project argue that theirs is small relative to the total, which is true no matter how big, and that stopping theirs won't help since others will go ahead, which is self-fulfilling if everyone follows this logic. (Likewise, the fishers who devastated the Atlantic cod argued that each was only a small contributor and, in any case, would be replaced by others if they stopped.)

What is sad and frightening is that the writers of these articles seem to lack the moral conscience and logical honesty to address these two critical realities of the global warming threat and our causation of it. Instead, they exhibit what Ayn Rand once called, "not blindness, but the refusal to see; not ignorance, but the refusal to know."

Proponents and supporters of carbon polluting projects focus exclusively on the jobs, wealth and tax revenues from projects x, y and z. They talk about how each project is essential and unavoidable. If they talk about the climate at all, it is to point out that each contributes only a small per cent of global emissions. They never talk about how we should act to avoid the tragedy of the commons from global warming, because to do so would undermine their project.

But the simple reality is that more carbon pollution equals more global warming. We have to stop extracting carbon from the earth's crust for ourselves and other countries. Then, we should join with leading jurisdictions, like California and several European countries, to use trade measures as necessary to pressure Alberta, China and others to reduce their pollution. There is no other way to tackle this extremely difficult global problem.

Imagine if this newspaper's editors refused to be complicit in the deceit and delusion, and asked every writer advocating an investment that increased carbon pollution to explain what B.C. should be doing to help humanity avoid sleepwalking over a climate cliff. If the writer would not explain, the paper could follow the article with a public health disclaimer, such as "The author has declined to explain how the increased carbon pollution he or she is proposing would not lead to a climate catastrophe for ourselves and our children - as found by scientists."

Of course, the newspaper is unlikely to play this role. But you can. Every time you see an article promoting more carbon pollution here and abroad, ask yourself if the author explains how this project can occur in a world that prevents global warming. If the author does not explain, ask yourself why.

When you hear, "We need this project for the economy," you might ask, "You mean we need extreme storms and ecological destruction - that we could not have a thriving economy if we ran our vehicles on electricity and biofuels or generated electricity from renewable energy?"
When you hear, "We need to be good neighbours to Alberta," you might ask, "You mean we need to help our neighbours get rich while devastating the planet?"

When you hear, "The Chinese will just get the carbon polluting fuels from someone else," you might ask, "You mean it's better for our children that we help the Chinese increase carbon pollution rather than discouraging China and other polluters in a peaceful, responsible manner?" When you hear, "The oilsands and other polluting projects will be developed no matter what we do," you might ask yourself, "Does this person have me and my children's best interests in mind?"

The incredible logic of planetary destruction – rationalizing a new oil refinery on the B.C. coast

Media tycoon David Black says he wants to protect the B.C. marine environment he loves from an oil spill that could result from tankers shipping bitumen from the Alberta tar sands to China and other overseas markets. To this end, he just announced that he has the necessary financial backing for his proposed oil refinery at Kitimat, which would convert bitumen into gasoline, diesel and other refined petroleum products.

His logic is that a spill of gasoline and diesel would be less harmful to the marine environment than bitumen. Presumably this is true.

But like any school child, Mr. Black must be aware that we need to stop investing in facilities and infrastructure that put carbon pollution into the atmosphere – whether that occurs here or in China. Long lived investments, like his proposed refinery and the proposed Northern Gateway pipeline that would feed it, last many decades. Yet, scientists tell us repeatedly, and with increasing urgency, that global emissions need to start falling in this decade to have any chance of not increasing temperatures more than 2 Celsius above pre-industrial levels – a tipping point that is likely to unleash storms, droughts, epidemics and eventually significant sea level rise.

Mr. Black does not talk about how we prevent this catastrophe. This is not surprising – because his proposed refinery is not part of a healthy path for the planet and our children. The healthy path requires investments that produce zero-carbon electricity and biofuels for our vehicles, that prevents export of fossil fuel products to anyone who burns them to release more carbon pollution, and that combines with other leading jurisdictions to apply trade measures to pressure such countries to stop polluting.

And here is the biggest irony of all. Mr. Black justifies his proposal by his desire to protect the coastal marine environment. But this requires that he close his eyes (and distract the rest of us with baubles of jobs and tax revenue) to the effect that carbon pollution has on the oceans. Report after report from marine scientists track how rising CO2 concentrations in the oceans are killing sea life, starting with scallops and other acid-sensitive organisms. Mr. Black and his project would help advance the very destruction he claims he wants to avoid. The logic is astounding. And yet no one in the mainstream media is talking about this.

Climate and Voting – the environmental, social justice and survival issue of our times

British Columbia, where I live, will have a provincial election in May 2013. By a strange set of circumstances, BC voters have a rare opportunity, for the second provincial election in a row, to significantly influence the global climate struggle with their vote. Ironically, this means switching their vote from what it was in 2009 – it can’t get more non-partisan than that!

In 2009, the NDP opposition crassly promised if elected to kill in the cradle North America’s only true carbon tax, even though they had previously argued for its implementation. Many climate-concerned voters, who might have normally voted for the Greens or the NDP, voted for the governing Liberals in order to save the tax. During the campaign, I joined with experts from a diversity of ideological perspectives to try to convince people to vote strategically in our first-past-the-post system, hoping to ensure the NDP would lose swing ridings and not form government. (The NDP often emphasizes its concern for social justice, but sometimes seems to forget that climate change is one of humanity’s greatest social justice issues – just ask someone from Bangladesh, or a similarly vulnerable poor country, who understands the human implications of climate change.)

The Liberals just barely won the election and the carbon tax was saved, a victory that was even more significant than we thought at the time – since the global financial crisis soon blunted climate policy initiatives in most, but not all, jurisdictions. Today, the tax stands symbolically as the only significant carbon tax in North America, representing a model for future policy efforts. Policy advisors study the tax, the New YorkTimes writes about it, even Republican politicians have talked favorably about it. Preventing the NDP from destroying the tax was the most critical outcome of that election. The struggle was stressful, but successful.

In this election, however, the roles are reversed. The reason is the proposed Northern Gateway pipeline.

Recent papers in Science and Nature on our global carbon emission limits – summarized in Bill McKibben’s article inRolling Stone – explain what many of us have known for at least two decades. Humanity cannot develop our massive unconventional oil resources while at the same time preventing the 2 C temperature increase that scientists believe could destabilize the climate, perhaps leading to runaway global warming. In Canada, this means that we cannot be expanding production levels and transport infrastructure for Alberta’s tar sands. This does not mean shutting down the tar sands tomorrow. With existing production facilities and pipeline infrastructure, its operation would continue for decades. But it cannot be expanding with new major developments and additional pipeline capacity. As McKibben points out, the math is ridiculously simple – and terrifying.

This means that the proposed Keystone XL pipeline from Alberta to the US and the Northern Gateway pipeline from Alberta to the BC coast should not be built. They would allow tar sands production to double from its current level of 2 million barrels per day.

The past three decades have shown that the vast majority of politicians have proven adept at expressing great concern for the threat of global warming, while not actually committing to policies that would stop or reduce emissions growth. The governing Liberals in BC, for example, have said they still believe in reducing greenhouse gas emissions, yet promote rapid expansion of shale gas production and new coal mines. They express “concerns” about Northern Gateway, yet refuse to promise to stop it if re-elected in May. We all know what this means.

In contrast, the opposition NDP has promised to kill the project. And believe me, a provincial government that wanted to kill a project like this would be able to do it – even if the federal government had the jurisdiction to approve its construction and had already done so.

The NDP is leading in the polls, but that does not mean they will win the election. The Conservatives have all but collapsed, which will mostly help the Liberals. And the Greens are still capturing a large share of voter interest, which will mostly hurt the NDP. Meanwhile Liberal supporters pound away with personal attack ads – a strategy that has worked well for Stephen Harper in election after election – and one wonders if some desperate oil patch money is behind this. The election outcome is definitely not a foregone conclusion.

All of this sets the stage for well-meaning people concerned about climate to make a tragic mistake this May – by voting Green in ridings where it could have ensured the election of an NDP member instead of a Liberal. (We must never forget how Ralph Nader’s Green candidacy helped George Bush just barely defeat Al Gore.)

In my view, this election is, and should be presented by people concerned about climate, as a referendum on Northern Gateway, and we should be encouraging individuals to vote NDP in any riding where the NDP has a chance of defeating the Liberal candidate, even if that individual would prefer to vote Green in an electoral system with proportional representation. The only riding where I am suggesting climate-focused people might vote Green is in the Victoria riding where climate scientist Andrew Weaver has an excellent chance of winning (hence not a wasted vote) and would be supporting an NDP or Liberal government where it did the right thing and hounding it where it did not. (For example, both the Liberals AND the NDP are too bullish on shale gas and LNG exports – a subject for a future blog.)

At this point, the prevention of Northern Gateway would be a (second) unique occasion in which British Columbian voters would be able to influence the broader struggle to stop global warming with one X on a ballot. Its cancellation would embolden activists and average citizens to realize that the tar sands and other carbon polluters can be stopped and would contribute to a rethinking of climate policies and emission reduction efforts in the two biggest carbon polluting countries in the world: the US and China.

Jobs for us, a planet for our kids

by Mark Jaccard

Originally published in The Vancouver Sun February 16, 2012

People who profit from an expanding fossil fuel industry want you to be suspicious of climate science. You should be suspicious of them. 

All the world’s leading climate scientists know that burning coal, oil and natural gas is heating the earth. These scientists may debate whether our current path will increase temperatures four or six degrees Celsius in this century, but they all agree that either of these outcomes will devastate British Columbia’s environment during the lives of our children and, eventually, raise sea levels by tens of metres. Unfortunately, the fossil fuel profiteers have a lot of money to buy media coverage, politicians and even a few contrarian scientists who are not climate experts, so our ability to prevent this disaster is a long shot. But, for our children, we have to try.

For one thing, we must see through the deceit of politicians who trumpet jobs from fossil fuel expansion while ignoring the impacts on the planet, not to mention on their own climate promises. Prime Minister Stephen Harper knows that his pursuit of oilsands expansion, the Northern Gateway pipeline across B.C. from Alberta and dangerous oil tankers on our coast contradicts his promise to reduce Canadian greenhouse gas emissions 17 per cent by 2020. Premier Christy Clark knows that her pursuit of expanded shale gas production and natural gas exports contradicts her promise to reduce B.C.’s emissions 33 per cent by 2020. One of her ministers has already justified this destructive choice, saying “jobs come first.” In other words, jobs from destroying the planet are preferred to jobs that preserve it.

But what would happen if we rejected the plans of politicians and fossil fuel profiteers who are propelling us to the high-carbon, planet-destroying economy? Actually, we know the answer. The evidence is all around us.

In 2007, the B.C. government recognized it could not allow fossil fuel electricity plants and meet its emissions reduction promises, so it cancelled contracts to build two new coal-fired power plants and relegated the natural gas-fired Burrard Thermal plant to backup status. Yes, the economy lost jobs associated with these fossil fuel projects. But in their place, BC Hydro contracted for zero-emission electricity from run-of-river hydro, wind and biomass projects. A recent estimate by PricewaterhouseCoopers puts the combined economic impacts of these clean electricity projects at 18,000 person-years of construction and 2,000 full-time jobs, which is more than the coal plants would have created. These include high-paying skilled jobs in engineering, accounting, economics, finance, planning, law, environmental science, hydrology, public relations, construction trades, and technical operations.

Fossil fuel profiteers want us to believe that we must continue to pollute the atmosphere in order to drive our cars. This is not true. Vehicles can run on biofuel (biodiesel or ethanol), clean electricity and hydrogen, none of which pollute the atmosphere. An extended range hybrid car or truck can rely mostly on clean electricity, supplemented with biodiesel or ethanol, giving the same horsepower as conventional vehicles. Since such technologies are already commercially available, you can buy one today.

My research group at Simon Fraser University is currently estimating the job effects in B.C. of transitioning 80 per cent of cars and trucks to zero-emission technologies and fuels over the next two decades. This would create more jobs in zero-emission electricity generation as well as jobs in forestry and biofuel production as cellulosic ethanol can be produced from wood waste and dedicated wood chip-to-fuel facilities. Our preliminary estimate is that the replacement of planet-destroying gasoline and diesel with planet-saving electricity and biofuel in hybrid cars and trucks would create more than 60,000 person-years in construction and 15,000 to 20,000 permanent jobs in the province.

These are crude estimates which we will refine over the coming year of research — they depend on choices about clean electricity projects, biofuel production processes, and vehicle technologies and fuels. Regardless, the lesson is clear. Job creation is not a reason to develop planet-destroying fossil fuels.

We can create as many or more high-skilled, high-paying jobs by shifting now to the planet-saving energy system. As Nicholas Stern, former chief economist of the World Bank says, “the low-carbon economy will be more energy-secure, cleaner and safer … the high-carbon economy will self-destruct.”

Pipeline itself not the only problem we should worry about: Continued development of the oilsands will increase Canada's CO2 emissions

By Mark Jaccard
Originally published in The Vancouver Sun, January 25 2012

As a sustainable energy researcher, I have been inundated with media requests to comment on the proposed new pipelines from Alberta’s tarsands, especially Enbridge’s Northern Gateway here in British Columbia. I have mostly declined, assuming that with such intense public interest the key issues would get a full airing. But I was wrong — for no one is discussing the proverbial “elephant in the room.” This is the connection between tarsands expansion and Prime Minister Stephen Harper’s 2007 promise to Canadians to reduce our greenhouse gas emissions 65 per cent by 2050.

Harper’s promise, recently reconfirmed, simply reflects the overwhelming scientific consensus that while any increase in average global temperatures from pre-industrial levels is dangerous, increases above 2 degrees Celsius will likely have cataclysmic effects for the ecosystems on which we depend. Yet human combustion of fossil fuels has already driven the temperature 1.2 degrees higher, and we are on a path of 4 degrees or more in this century alone, which will ultimately increase the sea level by tens of metres. This is why leaders of industrialized countries, like the U.S. and European Union, agreed to reduce emissions 80 per cent by 2050 and will work to require global emissions to start declining this decade.

A target 38 years hence might seem safely distant. But this is incorrect. All leading independent climate policy institutes concur that only with immediate action will we achieve a 65-80 per cent reduction in less than four decades. In the case of vehicles, this means the rapid deployment of near-zero-emission technologies which, thankfully, are already commercially available. These include hybrid vehicles using biofuels (ethanol or biodiesel), plug-in hybrid vehicles, and battery-electric vehicles. In contrast, our demand, and soon the global demand, for oil must contract, especially the demand for high-cost, high-emission tarsands.

Thus, for his promise not to be a lie, Harper cannot allow expansion of tarsands and associated pipelines, and he must require a growing market share of near-zero-emission vehicles. He knows this because his analysts are privy to the work of the world’s leading researchers. Canadians on all sides of the issue should read a 20-page report from MIT’s Joint Program on the Science and Policy of Global Change entitled Canada’s Bitumen Industry Under CO2 Constraints (found at http://globalchange.mit.edu). The report shows how and why the Canadian tarsands must contract as part of a global effort to prevent a 4 degree increase in temperatures and catastrophic climate change.

Why, then, would anyone argue for tarsands expansion and pipelines like Gateway? The reasons are obvious, as writers have known through the ages.

People who stand to get rich from tarsands development will delude themselves and try to delude others that the climate science is faulty or uncertain. As Upton Sinclair wrote, “it is hard to get a man to understand something when his income depends on his not understanding it.” And those who stand to gain from the tarsands indirectly (like politicians) will distract people from the obvious connection between tarsands expansion and climate catastrophe. “Tarsands are a small part of the problem.” “What about the Chinese?” “The tarsands will inevitably be developed.” “Low-emission vehicles and fuels are not ready yet.” And so on – all of it bogus. As H. L. Mencken wrote, “the truth that survives is simply the lie that is pleasantest to believe.”

The oft-heard argument that B.C. needs the jobs and tax revenue is particularly galling. This is like arguing we need jobs making a toxin or nuclear weapons. We are not helping ourselves and our children by creating jobs that spew CO2 into the atmosphere. We are already creating jobs that propel our vehicles without CO2 emissions, and we can do so much more.

And where is the logic in the almost-complete focus on pipeline or oil tanker spills by environmentalists and first nations? If Enbridge is able to convince the hearing panel that these local threats are acceptable, then the project goes ahead. But since climate change will devastate all of the ecosystems potentially affected by the project, efforts to prevent local damage from spills are fruitless if they are not part of a concerted effort to stop CO2 emissions. Otherwise, it’s like trying to prevent a fuel leak on the Titanic as it steams toward the iceberg. We need to turn the ship.

The facts are simple. Our political leaders are lying to us if they aid and abet the expansion of tarsands while promising to take action to prevent the imminent climate catastrophe. If you love this planet and your children, and are humble and objective in considering the findings of science, you have no choice but to battle hard to stop Gateway and other tarsands pipelines. It is time to face up to this challenge with honesty and courage.

Minimizing the inevitable rate hike: What is best for BC Hydro - to be run by its review panel or independent regulation of the past three decades?

By Mark Jaccard
Originally published in the Vancouver Sun August 23, 2011

The recent report by the panel reviewing BC Hydro's electricity rates triggered a predictable flurry of conflicting comments from entrenched ideologues. One side blamed private power producers for rising rates while the other blamed the utility's mismanagement and government environmental policy. With the rampant distortions, it gets confusing. Here are a few things to keep in mind.

First, throughout the world, new supplies of electricity cost more. In British Columbia, some increase in electricity rates is inevitable as we blend new higher-cost supplies with the low-cost power from our hydropower legacy. This is true whether that new supply is provided by private companies or a Crown corporation like BC Hydro.

Second, evidence from around the world shows that for small projects private power tends to be cheaper than public power, but for large projects there is little difference. With small projects, there are substantial costs associated with preliminary assessments of potential sites and, since only a tiny fraction of these are finally developed, many private investors incur losses.

If only BC Hydro was allowed to develop small projects in B.C., ratepayers would pay for these losses, just as ratepayers paid for BC Hydro's write-offs of more than $100 million on Site C two decades ago and over $100 million on a failed Vancouver Island natural gas plant a decade ago. In spite of these past costly mistakes by Hydro, the global evidence generally indicates that well-managed crown corporations can develop large projects just as cost-effectively as private companies.

Third, environmental policy is a factor in rising electricity rates everywhere. B.C.'s zero-emission electricity policy reflects our willingness to join many jurisdictions around the world (the US, Europe, China) in incurring higher electricity rates to reduce greenhouse gas emissions. If we cared only about having more money in our pockets today, and not for the future of the planet, we should build nothing but coal and natural gas plants. Only a few extremists, who arrogantly deny what scientists are frantically saying, still make this argument.

Fourth, electricity self-sufficiency also increases rates in the shortrun, but this extra cost may be justified as an insurance premium to reduce the risk of higher prices during regional shortages in future, and also the amount of power B.C. must purchase from polluting coal plants in Alberta. To ensure self-sufficiency when our hydropower production is low (because of low water flows), Hydro can build extra capacity or sign additional long-term contracts with independent producers. In both cases, Hydro
will have to sell surplus power at (usually) lower spot prices in years of medium and high water flow. We can have lower rates for awhile by not being self-sufficient. But like any decision not to insure, it may backfire and result in much higher rates and more pollution if we guess wrong. People who pretend away this trade-off are being disingenuous.

Fifth, regulated monopolies manage their costs better than unregulated monopolies. BC Hydro has long been regulated by the BC Utilities Commission, but the Clean Energy Act last year removed much of its expenditures from that independent control. As I argued on these pages at the time, this alone can increase upward pressure on rates. (When I chaired the commission in the '90s, our executive director, Bill Grant, liked to say: "The only thing better in life than being a regulated monopoly, is being an unregulated monopoly.")

The BC Hydro review panel has essentially taken over the commission's function. But one has to ask why this ad hoc, politically driven oversight is preferable to the systematic, independent regulation of Hydro of the past three decades. The review panel's suggestion that Hydro's rate application be cut in half - from annual increases of 10 per cent down to five per cent - is probably what the commission would have ordered anyway. It reminds me of the mid-'90s, when the panel I chaired rejected a Hydro rate application, even though Hydro's witnesses testified the increase was crucial for sustaining reliable service. A few years later, Hydro's CEO testified that our disciplining of the company had been the correct decision, forcing it to find efficiencies without compromising reliability.

What conclusions do I draw? The public versus private power debate is mostly a red herring. Acquiring new power, protecting the environment, and energy self-reliance all increase rates. But these rate increases can be minimized if we re-establish independent regulation of BC Hydro by the commission. 

Finally, above all, ignore the ideologues.

Campbell's hidden $200-million tax cut

By Mark Jaccard
Originally published in the Vancouver Sun June 9, 2011

British Columbia politics in 2010 were dominated by accusations that Gordon Campbell
used the HST tax reform, which he claimed was "revenue-neutral," as a sneaky way to
increase taxes. Few believed his claim, and plummeting public opinion forced him to
resign. In 2008-09, B.C. politics were dominated by accusations that Campbell used the
carbon tax reform, which he also claimed was revenue-neutral, as a sneaky way to
increase taxes. His party's 20-point lead in the polls evaporated, and he almost lost the
provincial election in May 2009.

By now, Gordon Campbell must detest the term revenue-neutral. As it turns out, with the
carbon tax, he shouldn't have used it anyway. He should have said "revenue-negative," or
just plain old "tax cut."

That's right. The evidence now shows that because of B.C.'s carbon tax reform, at least
three-quarters of us now pay less taxes to the B.C. government. But one never hears this.
Instead, people still complain about Campbell's punitive carbon tax. To Campbell, the
world must sometimes seem awfully cruel.

Recall, when introducing the carbon tax, the Campbell government committed in
legislation to offset all tax revenue it received with cuts to personal and corporate income
taxes, along with cash payments to lowincome earners who pay little or no taxes. It also
gives back to municipal governments most of the carbon tax revenues they pay.
The B.C. finance ministry's records for the first two years of carbon tax reform (July
2008 to July 2010) show that the government collected $848 million in carbon taxes and
gave up $1.042 billion via income tax reductions and payments to low-income people and
municipal governments. Thus, in its first two years, the revenue-neutral carbon tax was
actually a $200-million tax cut. (And this is not even including the $100 cheques from
general revenue the government sent everyone just as the tax kicked in.)

In theory, a revenue-neutral carbon tax reform should have left about half of British
Columbians paying less tax and half paying more than before, although for a large
percentage the net effect might have been close to zero. In other words, benefits from the
tax cuts would be roughly equal to the higher payments for more expensive fuels. But
because the carbon tax reform ended up reducing net taxes by $200 million, the
percentage of net winners is likely to be somewhat greater than 50 per cent of taxpayers.

And this is only half the story. Energy consumption data show that B.C. businesses pay
about two-thirds of the carbon tax, with individual consumers paying the other third. This
would be equitable if businesses also received about two-thirds of the benefits from
cutting corporate and personal income taxes. However, the Campbell government
selected income tax cuts for businesses and individuals such that the latter receive about
two-thirds of the "recycled" carbon tax revenue. With B.C. households paying about one third of the carbon tax and receiving two-thirds of the income tax cut, the carbon tax
reform is, in effect, a transfer from B.C. businesses to B.C. individuals. It's a great deal
for individual taxpayers and even most small businesses, but not for some large,
emission-intensive industries.

Reviewing data on fuel consumption by different levels of taxable income in B.C., my
crude estimate is that the combined effects of the transfer from industry to households
and the carbon tax cut mean that at least 75 per cent of British Columbian households are
paying less taxes today because of the carbon tax. The much smaller minority who are
paying more are mostly the very well-off for whom the income tax cuts cannot offset
their high fuel use.

When one contemplates the past three years of invective in the media against Campbell's
"carbon tax grab," it is quite a shock to contrast this with clear evidence that the carbon
tax reform reduced taxes for a substantial majority of British Columbian households. But,
having researched environmental policies for over 25 years, I have come to learn that it is
not what politicians do to us that is shocking, it is what we falsely accuse them of doing -
and then what we do to them in revenge. Gordon Campbell's trying carbon tax experience
only reinforces that lesson.

Who knows what we might learn about the HST's net effect two years from now -
assuming it's given a chance to last that long. Too late for Gordon Campbell in any case.

Carbon neutral public sector: a myth B.C. cannot afford

By Mark Jaccard
Originally published in the Vancouver Sun July, 2011

On June 30, the B.C. government announced it had become “carbon neutral.” Do you know
what this means?

If you’re unsure, you’re not alone. Pollsters find most people are. But some vaguely understand that being carbon neutral absolves them from guilt because, by paying someone else to reduce their greenhouse gas emissions (especially carbon dioxide), they are somehow no longer causing climate change when taking an airplane. Like paying someone else to do penance, you still emit carbon, but no longer feel guilty about your impact on the Earth’s climate, ecosystems and people.

The carbon neutral industry is growing. There are the guilty parties: individuals and companies who want or must become carbon neutral. They pay money to people who reduce their emissions: “carbon offset providers.” The two parties find each other thanks to “offset brokers,” companies that verify the emission reductions and get a commission from each transaction. Finally, there is government, which sanctions the offset industry and may, as in the case of B.C., even set its own goals for being carbon neutral.

Saving the planet by paying money instead of reducing your emissions sounds too good to be true. Experts say it is, but no one is listening.

The reasons are quite simple. The people who are paid to reduce emissions do things like switch from fossil fuels to renewable energy, invest in energy efficiency and plant trees. The problem is that all these activities have been occurring before. In some locations and circumstances, investments in renewable energy, energy efficiency, tree planting and other offsets are profitable, and would occur without the offset payment.

The carbon neutral industry claims to have a foolproof system to ensure that all offsets would not otherwise have occurred. But they have a conflict of interest. Independent researchers are much more circumspect. By looking at past subsidy programs that are similar to offsets, and increasingly at existing offset programs, they tend to find that while some offsets are indeed bona fide, others are not. The big message is that even more vigorous verification schemes will not solve this. It is simply impossible for third party verifiers to ever know all the internal factors that will determine the long-run profitability of a particular investment by a so-called offsetter.

This evidence is conveniently ignored by the carbon neutral industry and governments. This in itself is of interest to researchers who, like me, are trying to find out why our societies have been implementing climate policy after climate policy for almost three decades now without hitting any of our greenhouse gas reduction targets. Those who research the ability of humans to self-delude may have something to contribute.

A myth like carbon neutral would be relatively harmless if it were just something that businesses and individuals did on their own. But when adopted as official government policy, it can be harmful. In his climate policy frenzy of 2007-2008, former B.C. Liberal premier Gordon Campbell implemented some policies – like our carbon tax and our zero-emission electricity requirement – that are now recognized among the best climate policies in the world. Unfortunately, he also bought into the idea that government should be carbon neutral.

An excellent recent Sun commentary by Bob Simpson pointed out that B.C.’s policy of a carbon neutral public sector has the perverse effect of diverting our tax dollars from schools and hospitals to purchase offsets from profitable companies like EnCana in order to subsidize their investments to reduce greenhouse gases (“Taxing the public for a private good is a bad idea,” July 4). This is both economically inefficient and unfair. Unlike the rest of us, EnCana does not have to pay the carbon tax on these particular emissions. Instead, our schools and hospitals pay the $25 carbon tax for each tonne of carbon dioxide emissions and then pay an additional $25 per tonne as an offset payment to be carbon neutral, money which goes to EnCana to subsidize its emissions reductions.

Wouldn’t it be nice if your furnace was exempt from the carbon tax, and then a local hospital sent you money to upgrade to a more efficient model? That’s not likely to happen. But, hopefully, what does happen is that the B.C. government abandons the myth of carbon neutrality and gets on with the important task of pricing or regulating all emissions in the province.