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.
Showing posts with label Gordon Campbell. Show all posts
Showing posts with label Gordon Campbell. Show all posts
Saturday, 16 February 2013
A coal-fired plant and the lie of the land
By Mark Jaccard
Originally published in The Globe and Mail August 11, 2011
Stephen Harper can’t allow new coal-fired electricity plants to be built, such as the one Maxim Power is proposing in Alberta, and achieve his promise to reduce Canadian greenhouse-gas emissions 17 per cent by 2020. As a researcher of energy-economy systems, I say this with virtual certainty. I also know that any scholar in my field would agree with me, and that the Prime Minister’s expert advisers would tell him the same thing. The reasons are simple.
Our energy-economy system is currently dominated by the combustion of fossil fuel products made from natural gas, oil, tar sands and coal, a combustion that emits carbon dioxide, the main greenhouse gas causing climate change. The use of fossil fuels is linked to long-lived investments in energy supply and use – coal mines, tar sands processing plants, coal-fired electricity plants, oil and gas pipelines, industrial plants, buildings etc. We already have the technologies to use energy more efficiently, to switch to zero-emission sources such as hydropower, wind, solar and biofuels, and to prevent emissions by capturing and storing them.
But these technologies require considerable time to transform our energy-economy system, and it usually only occurs as old facilities are retired and replaced by zero-emission investments. Building a new coal-fired power plant goes in the opposite direction. It puts the lie to claims of significant emissions reduction over the next decade – an extremely short time frame.
History has a funny way of repeating itself. In 1997, Jean Chrétien committed Canada to a 2010 target for greenhouse-gas reduction, under the Kyoto Protocol, but did not implement the policies needed to achieve it – namely, a significant price on emissions and regulations to prohibit new investments that foster the combustion of fossil fuels. But 13 years was a safe distance in politics, and he left office before Canada officially reneged on its Kyoto commitment. One of his policy advisers has since acknowledged that Mr. Chrétien knew his policies would fail.
In 2007, Mr. Harper committed Canada to a 2020 target for greenhouse-gas reduction but hasn’t implemented policies that would achieve it. Like Mr. Chrétien, Mr. Harper must know his scant policies will fail. Recently released internal government documents show he’s receiving information from civil servants telling him his current policies are not transforming the energy-economy system in the direction he’s promised. Even his hand-picked National Round Table on the Environment and the Economy has said this, albeit inadvertently, in its 2009 report, Achieving 2050. The report shows that emissions must be falling already to achieve his 2020 target, which they certainly don’t when you allow new coal-fired electricity plants.
Mr. Harper’s choice of a target 13 years distant, without implementing policies to achieve it, is eerily reminiscent of Mr. Chrétien. Perhaps he sees the wily political master as his model. But there are other models available.
In 2007, then-B.C. premier Gordon Campbell also committed to a 2020 emissions reduction target. But to convince people of his sincerity – especially after two decades of climate policy failure by all Canadian governments at all levels – Mr. Campbell acted very differently. First, he got an independent body to set interim targets for 2012 and 2016, so people would know within a political time frame if he were on track to keep his promise. Second, he asked his advisers what investments needed to happen in 2007, and every year thereafter, to meet the 2020 target. On that basis, he immediately implemented a zero-emission electricity policy, which caused the cancellation of two proposed coal-fired electricity plants that had signed preliminary supply deals with BC Hydro.
BC Hydro abandoned its pursuit of coal and natural gas and switched to renewables such as run-of-river hydro, wind and biomass. If Alberta were not allowed to build another coal-fired plant, it would likewise use more renewables such as wind, biomass, hydropower and perhaps solar. This would slightly increase electricity rates, but not much because of the inertia in the energy-economy system – most electricity in Alberta would continue to be generated by existing low-cost facilities for years to come.
All of this raises an interesting conundrum for Canadians. What do you do when your government knowingly permits investments that prevent it from meeting its promises? Do you simply stand by and watch the construction of a coal plant that contributes great harm to the planet? Or is the only remaining ethical option to use every legal avenue and perhaps even peaceful civil disobedience to try to stop the plant?
Originally published in The Globe and Mail August 11, 2011
Stephen Harper can’t allow new coal-fired electricity plants to be built, such as the one Maxim Power is proposing in Alberta, and achieve his promise to reduce Canadian greenhouse-gas emissions 17 per cent by 2020. As a researcher of energy-economy systems, I say this with virtual certainty. I also know that any scholar in my field would agree with me, and that the Prime Minister’s expert advisers would tell him the same thing. The reasons are simple.
Our energy-economy system is currently dominated by the combustion of fossil fuel products made from natural gas, oil, tar sands and coal, a combustion that emits carbon dioxide, the main greenhouse gas causing climate change. The use of fossil fuels is linked to long-lived investments in energy supply and use – coal mines, tar sands processing plants, coal-fired electricity plants, oil and gas pipelines, industrial plants, buildings etc. We already have the technologies to use energy more efficiently, to switch to zero-emission sources such as hydropower, wind, solar and biofuels, and to prevent emissions by capturing and storing them.
But these technologies require considerable time to transform our energy-economy system, and it usually only occurs as old facilities are retired and replaced by zero-emission investments. Building a new coal-fired power plant goes in the opposite direction. It puts the lie to claims of significant emissions reduction over the next decade – an extremely short time frame.
History has a funny way of repeating itself. In 1997, Jean Chrétien committed Canada to a 2010 target for greenhouse-gas reduction, under the Kyoto Protocol, but did not implement the policies needed to achieve it – namely, a significant price on emissions and regulations to prohibit new investments that foster the combustion of fossil fuels. But 13 years was a safe distance in politics, and he left office before Canada officially reneged on its Kyoto commitment. One of his policy advisers has since acknowledged that Mr. Chrétien knew his policies would fail.
In 2007, Mr. Harper committed Canada to a 2020 target for greenhouse-gas reduction but hasn’t implemented policies that would achieve it. Like Mr. Chrétien, Mr. Harper must know his scant policies will fail. Recently released internal government documents show he’s receiving information from civil servants telling him his current policies are not transforming the energy-economy system in the direction he’s promised. Even his hand-picked National Round Table on the Environment and the Economy has said this, albeit inadvertently, in its 2009 report, Achieving 2050. The report shows that emissions must be falling already to achieve his 2020 target, which they certainly don’t when you allow new coal-fired electricity plants.
Mr. Harper’s choice of a target 13 years distant, without implementing policies to achieve it, is eerily reminiscent of Mr. Chrétien. Perhaps he sees the wily political master as his model. But there are other models available.
In 2007, then-B.C. premier Gordon Campbell also committed to a 2020 emissions reduction target. But to convince people of his sincerity – especially after two decades of climate policy failure by all Canadian governments at all levels – Mr. Campbell acted very differently. First, he got an independent body to set interim targets for 2012 and 2016, so people would know within a political time frame if he were on track to keep his promise. Second, he asked his advisers what investments needed to happen in 2007, and every year thereafter, to meet the 2020 target. On that basis, he immediately implemented a zero-emission electricity policy, which caused the cancellation of two proposed coal-fired electricity plants that had signed preliminary supply deals with BC Hydro.
BC Hydro abandoned its pursuit of coal and natural gas and switched to renewables such as run-of-river hydro, wind and biomass. If Alberta were not allowed to build another coal-fired plant, it would likewise use more renewables such as wind, biomass, hydropower and perhaps solar. This would slightly increase electricity rates, but not much because of the inertia in the energy-economy system – most electricity in Alberta would continue to be generated by existing low-cost facilities for years to come.
All of this raises an interesting conundrum for Canadians. What do you do when your government knowingly permits investments that prevent it from meeting its promises? Do you simply stand by and watch the construction of a coal plant that contributes great harm to the planet? Or is the only remaining ethical option to use every legal avenue and perhaps even peaceful civil disobedience to try to stop the plant?
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.
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.
BC’s Clean Energy Act: Balancing government control and independent regulation
By Mark Jaccard
Originally published in the Vancouver Sun June 4, 2010
Originally published in the Vancouver Sun June 4, 2010
BC’s
proposed clean energy act has triggered extreme statements pro and
con. “Great, because our elected representatives are taking
responsibility for electricity policy.” “Disastrous, because it
reduces utilities commission control over BC Hydro.”
While
the new act covers many issues, the key controversy is its proposed
replacement of the utilities commission with the provincial cabinet
for approving major BC Hydro projects and programs. These include
turbines at existing dams, electricity from independent power
producers, mass replacement of home meters, extensions of the
transmission grid and, most importantly, the Site C dam on the Peace
River. With the Site C dam as the heavyweight, the cabinet-approved
bill to BC Hydro customers approaches $10 billion.
Supporting
the act is the argument that our elected representatives should make
these big financial commitments, not the unelected technocrats at the
utilities commission. If BC is to meet its energy security and
environmental challenges, it needs policy consistency throughout
government. The counter argument is that only the utilities
commission has the expertise, the opportunities for public input, and
the distance from short-term political pressures to make sound
decisions having such long-term implications.
Today,
the governing Liberals argue in favour of cabinet control while the
opposition NDP argue in favour of the commission. But both parties
have been on both sides of this issue over the past two decades.
Indeed,
both perspectives competed within the NDP government of the 1990s.
Premier Mike Harcourt and his energy minister, Ann Edwards, believed
the utilities commission offered the best means of providing a check
on BC Hydro. They appointed me in 1992 to chair the commission, which
I did for five years, introducing intervener funding, an integrated
resource planning process with obligatory public involvement, and a
negotiated settlement process involving key interests including
environmentalists and consumer groups. These reforms are still
integral to the commission’s operation, whether applied to Hydro or
other utilities.
Within
the NDP government, however, Glen Clark questioned why unelected
commissioners, who never face the electorate to defend their
decisions, should determine major investments by BC’s largest crown
corporation. When Clark became premier in 1996, he effectively
removed Hydro from commission oversight and the corporation ceased
its open planning process. To everyone’s surprise it unveiled a new
strategy to build a natural gas pipeline to Vancouver Island and
several natural gas-fired plants, which would dramatically increase
greenhouse gas emissions. Political control over Hydro had clearly
become paramount.
When
Gordon Campbell campaigned for premier, he promised to re-instate
commission control over Hydro, which he did in 2003. Subsequent open
reviews and commission decisions finally convinced Hydro to abandon
natural gas and return to its earlier pursuit of renewable
electricity for Vancouver Island and the rest of the province. This
approach meshed with Campbell’s climate policy initiatives of 2007,
which included a requirement that Hydro acquire zero-emission sources
of electricity, be these from independent power producers or a future
BC Hydro project like the Site C dam.
Recent
frustrations, however, have convinced Campbell to once again liberate
Hydro from commission control, at least for the projects and programs
listed in his new act. The commission’s processes are slow and its
decisions can act against government policy goals, an example being
its decision (since overruled) that Hydro should continue using its
greenhouse gas-emitting Burrard Thermal plant.
Thus,
Campbell and the NDP have now been on both sides of this debate. So
which approach is better?
There
is no easy answer and, indeed, one should mistrust anyone who argues
vociferously for either extreme. It is important that the commission,
which is after all unelected, not thwart legitimate government policy
objectives. At the same time, the commission has demonstrated through
the years the value of an arms-length agency that provides a check on
major electricity investment decisions, restricting the influence of
short-term political considerations. In fact, I have been invited
over the years to explain the commission’s regulation of Hydro to
other jurisdictions that ended up emulating the BC model, including
Hungary (1993), Brazil (1997) and Quebec (1999).
In
the case of Site C, the decision is too monumental, in my view, to be
delegated to unelected officials. That decision must be made by
cabinet. But I am not convinced, however, that these other projects
and programs should be exempt from commission oversight. I think
government can achieve its policy objectives with language it has in
the new act directing the commission to be “guided by” government
climate and energy security policies. And it can require the
commission to accelerate its procedures. When I chaired the
commission, for example, we limited every hearing to two weeks and
allowed ourselves only one month to issue a decision.
While
quick actions are needed to transition BC toward a cleaner, more
electricity-intensive economy, we must be careful not to jettison
oversight mechanisms that have served us quite well.
Was the carbon tax smart politics? Or the cause of a “near run thing” election?
By Mark Jaccard
Originally published in the Vancouver Sun May 20, 2009
During BC’s election campaign and in post-election analysis, media commentators have lauded Gordon Campbell’s carbon tax as a “political masterstoke” while panning Carol James’ anti-tax campaign as “not so bright.” I think the evidence says otherwise. I think Campbell won the election in spite of the carbon tax not because of it and that James almost rode a brilliant strategy to an upset victory in an election that would otherwise not have been close.
Media pundits seem to forget that throughout 2007 the Liberals were a popular government in cruise-control, with a polling lead ranging from 12 to 18 percent over the NDP. With the election just over a year away, NDP prospects looked dismal – until the Liberals launched the carbon tax in February 2008.
Although earlier statements suggested they would support a carbon tax, the NDP quickly recognized this political gift from Campbell. Within months they launched their axe-the-tax campaign, focusing on its so-called unfairness to rural, northern, suburban and coastal residents and linking the policy to Campbell’s so-called “arrogant and uncaring personality.” By November, in an amazing reversal of fortune, polls placed the NDP at parity with the Liberals.
But in late 2008, Campbell got lucky – doubly-lucky. First, the global economic crisis refocused voters on who should govern during tough economic times, which rightly or wrongly favoured Campbell. Second, the economic collapse precipitated falling oil prices, in turn dropping gasoline prices by 30 percent. With the focus shifted from the carbon tax to the economy, the Liberals rebounded to a 5 to 10 point lead in polls prior to the election campaign.
Although we cannot run history twice, it is interesting to ask what the polling numbers would have been if there had never been a carbon tax and the NDP response. My guess is that the Liberals would have had at least a 12 and perhaps a 20 point lead over the NDP by April of this year – a popular government in 2007, with the additional benefit of growing voter support during the global economic crisis of 2008-2009.
Instead, the carbon tax gave the NDP a fighting chance. But to win the election, it still needed votes from a wide ideological spectrum (especially without the split of right and centre voters between two political parties, as occurred in 1973, 1991 and 1996 – the only elections the NDP has won). This explains why Carol James started the campaign by promising voters she would still axe the tax. Her target was key swing ridings in the interior (such as Prince George) and greater Vancouver’s outer suburbs (such as Surrey). Then, in mid-campaign, James shifted her environmental focus to attacking private hydropower development. Her goal in this case was to pull enough voters away from the Liberals and especially the Greens to win key seats in Vancouver and adjacent suburbs. The message that only an NDP victory would stop hydropower development probably contributed to the last minute Green decline to only 8 percent.
Pundits are now concluding that because James lost the election and because it cost her some votes, her anti-tax campaign was dumb politics. This is faulty logic. They should be asking whether or not her strategy provided a net gain or loss of votes in the critical swing ridings she needed to win the election. My guess is that it provided a significant net gain relative to where the NDP stood in 2007 and where they were likely to stand in the 2009 election, given the unfavourable external developments beyond their control – global recession, falling oil prices.
It will be some time before political scientists assess the likelihood of my argument. So why care now? The NDP lost. The tax remains.
I feel differently. I believe Gordon Campbell, and other politicians like him who sincerely want to reduce greenhouse gases, must understand that – as the Duke of Wellington said after barely defeating Napoleon at Waterloo – this election was “a near run thing.” And the main reason was the carbon tax.
Effective climate policy is extremely difficult to implement and sustain. Only via some mix of emissions pricing (carbon tax and/or cap and trade), regulations (vehicle standards, building codes), and public investment (public transit) will we reduce emissions. All of these policies have costs. All cause winners and losers. At the same time, most people tell pollsters they are already doing all they can to reduce emissions. They also say any government policy that increases their cost of living is unfair.
This arena remains deadly dangerous for the well-intentioned politician. As he goes forward with climate policy over the next four years, Gordon Campbell might well reflect on the political lessons from his own near run thing.
Originally published in the Vancouver Sun May 20, 2009
During BC’s election campaign and in post-election analysis, media commentators have lauded Gordon Campbell’s carbon tax as a “political masterstoke” while panning Carol James’ anti-tax campaign as “not so bright.” I think the evidence says otherwise. I think Campbell won the election in spite of the carbon tax not because of it and that James almost rode a brilliant strategy to an upset victory in an election that would otherwise not have been close.
Climate policy misinformation: Pity the voter
By Mark Jaccard
Originally published in the Vancouver Sun April 20, 2009
A recent BC NDP press release states that Canada’s National Roundtable on the Environment and the Economy (on which I serve) “clearly supports” the NDP’s climate policy proposal to scrap the carbon tax and that I am Premier Campbell’s “top advisor” on BC’s carbon tax. Neither of these statements is true.
I have never met or communicated with Premier Campbell and did not advise the BC government as it rolled out its key climate policies in 2007 and early 2008, including the carbon tax. My only recent advisory role in BC was for the Climate Action Team, a committee of citizens and experts proposing future climate policy for BC in the period 2012 to 2020. In the first half of 2008, I attended six meetings as the team prepared the report it publicly released in July, long after the carbon tax had been implemented in the February 2008 budget. Ironically, my role advising a citizen’s committee (rather than politicians) was identical to the function I performed in 1998 for the Greenhouse Gas Forum, a citizen advisory committee created by BC’s NDP government.
Of course, the NDP did not call me Gordon Campbell’s “top advisor” from 2001 to 2006 when I repeatedly criticized his ineffective climate policies of that period. But now that I am applauding his recent climate policies and sharply criticizing the NDP’s alternatives, their strategy is to claim I am no longer independent.
Had I been Campbell’s policy advisor in 2007, when he finally got serious about the climate risk, I would have counseled him against implementing the carbon tax. This is the recommendation I gave, when asked, to Rona Ambrose as Canada’s Conservative environment minister in 2006, to Michael Ignatieff during his campaign for Liberal leader in the same year, and to Stephane Dion in May 2008. I would have told Campbell that while a carbon tax is the most economically efficient and effective way of reducing greenhouse gas emissions, it would be politically safer to implement an equivalent cap-and-trade system instead.
With cap-and-trade, the government allocates tradable emissions permits that add up to a fixed cap – which would decline over time in order to reduce emissions. As the cap declines, the value of the smaller number of permits starts to rise, which in turn increases the price of fossil fuels like natural gas, gasoline and home heating oil. Thus, an “economy-wide” cap-and-trade system has the same effect on the price of gasoline as the carbon tax. But when comparing the two, political optics favours cap-and-trade.I know this sounds cynical. But politicians implementing a carbon tax face a great risk that unscrupulous political opponents will mislead the public by claiming we can reduce emissions without taxing gasoline, conveniently failing to mention that their cap-and-trade alternative should have the same upward effect on its price for the same emissions reductions. The NDP have taken the game one step further. They are promising British Columbians that their cap-and-trade “alternative” would only apply to industrial emissions, meaning that the price of gasoline would not increase. Yet, they claim they can match Campbell’s promise to reduce emissions 33% by 2020.
Think of that. The current carbon tax in BC covers 75% of emissions, which makes it a leading policy in terms of its coverage. (Not-yet-taxed emissions sources include municipal landfills, agriculture and a few unique industrial process emissions, although the government is apparently working on this.) The NDP alternative would role this coverage back to about 35% of emissions, yet it promises to achieve the same reductions in 2020. In a recent study, I estimated that major emissions reductions from a cap-and-trade that applied only to industry (with accompanying regulations in transportation and other sectors) would lead to dramatic increases in industrial production costs, forcing cutbacks and even plant closures. Direct and indirect job losses in BC would be at least 60,000 from the NDP policy.
This is one of the reasons why we members of the National Roundtable say repeatedly in our report that the important issue is not cap-and-trade versus carbon tax, but rather emissions coverage. The report and its technical background documents are full of quotes like “Good design is more important than instrument choice. Either carbon taxes or cap-and-trade systems could be designed to be cost-effective.” Instead, it is emissions coverage that is the key feature to look for, “the carbon pricing policy must be able to implement a unified carbon price across all emissions.” Note the emphasis on “all” emissions.
The important message from the Roundtable’s new report is to ignore the debate on cap-and-trade versus carbon tax and instead focus on emissions coverage. For a given level of emissions reduction, the fairer, more effective and more efficient policy is one that covers more emissions. In BC, it is a choice between 75% and 35%.
Originally published in the Vancouver Sun April 20, 2009
A recent BC NDP press release states that Canada’s National Roundtable on the Environment and the Economy (on which I serve) “clearly supports” the NDP’s climate policy proposal to scrap the carbon tax and that I am Premier Campbell’s “top advisor” on BC’s carbon tax. Neither of these statements is true.
I have never met or communicated with Premier Campbell and did not advise the BC government as it rolled out its key climate policies in 2007 and early 2008, including the carbon tax. My only recent advisory role in BC was for the Climate Action Team, a committee of citizens and experts proposing future climate policy for BC in the period 2012 to 2020. In the first half of 2008, I attended six meetings as the team prepared the report it publicly released in July, long after the carbon tax had been implemented in the February 2008 budget. Ironically, my role advising a citizen’s committee (rather than politicians) was identical to the function I performed in 1998 for the Greenhouse Gas Forum, a citizen advisory committee created by BC’s NDP government.
Of course, the NDP did not call me Gordon Campbell’s “top advisor” from 2001 to 2006 when I repeatedly criticized his ineffective climate policies of that period. But now that I am applauding his recent climate policies and sharply criticizing the NDP’s alternatives, their strategy is to claim I am no longer independent.
Had I been Campbell’s policy advisor in 2007, when he finally got serious about the climate risk, I would have counseled him against implementing the carbon tax. This is the recommendation I gave, when asked, to Rona Ambrose as Canada’s Conservative environment minister in 2006, to Michael Ignatieff during his campaign for Liberal leader in the same year, and to Stephane Dion in May 2008. I would have told Campbell that while a carbon tax is the most economically efficient and effective way of reducing greenhouse gas emissions, it would be politically safer to implement an equivalent cap-and-trade system instead.
With cap-and-trade, the government allocates tradable emissions permits that add up to a fixed cap – which would decline over time in order to reduce emissions. As the cap declines, the value of the smaller number of permits starts to rise, which in turn increases the price of fossil fuels like natural gas, gasoline and home heating oil. Thus, an “economy-wide” cap-and-trade system has the same effect on the price of gasoline as the carbon tax. But when comparing the two, political optics favours cap-and-trade.I know this sounds cynical. But politicians implementing a carbon tax face a great risk that unscrupulous political opponents will mislead the public by claiming we can reduce emissions without taxing gasoline, conveniently failing to mention that their cap-and-trade alternative should have the same upward effect on its price for the same emissions reductions. The NDP have taken the game one step further. They are promising British Columbians that their cap-and-trade “alternative” would only apply to industrial emissions, meaning that the price of gasoline would not increase. Yet, they claim they can match Campbell’s promise to reduce emissions 33% by 2020.
Think of that. The current carbon tax in BC covers 75% of emissions, which makes it a leading policy in terms of its coverage. (Not-yet-taxed emissions sources include municipal landfills, agriculture and a few unique industrial process emissions, although the government is apparently working on this.) The NDP alternative would role this coverage back to about 35% of emissions, yet it promises to achieve the same reductions in 2020. In a recent study, I estimated that major emissions reductions from a cap-and-trade that applied only to industry (with accompanying regulations in transportation and other sectors) would lead to dramatic increases in industrial production costs, forcing cutbacks and even plant closures. Direct and indirect job losses in BC would be at least 60,000 from the NDP policy.
This is one of the reasons why we members of the National Roundtable say repeatedly in our report that the important issue is not cap-and-trade versus carbon tax, but rather emissions coverage. The report and its technical background documents are full of quotes like “Good design is more important than instrument choice. Either carbon taxes or cap-and-trade systems could be designed to be cost-effective.” Instead, it is emissions coverage that is the key feature to look for, “the carbon pricing policy must be able to implement a unified carbon price across all emissions.” Note the emphasis on “all” emissions.
The important message from the Roundtable’s new report is to ignore the debate on cap-and-trade versus carbon tax and instead focus on emissions coverage. For a given level of emissions reduction, the fairer, more effective and more efficient policy is one that covers more emissions. In BC, it is a choice between 75% and 35%.
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