Saturday, September 13, 2008

(Way past) time to put a price on carbon!

Two more items that support the need for a price on carbon:

Today's Quirks and Quarks featured an interview with Dr. Andrew Weaver, Professor and Canada Research Chair in Climate Modelling and Analysis in the School of Earth and Ocean Sciences at the University of Victoria, one of Canada's most eminent climate scientists, and an important contributor to the Intergovernmental Panel on Climate Change.

Dr. Weaver has written a book called Keeping our Cool: Canada in a Warming World.

In the interview Dr. Weaver says "we have to go to zero emissions eventually" in order to stay below 2 degrees of warming and stabilize the climate. He says that the best way of dealing with this is to price emissions, using a mechanism like the BC Carbon Tax. According to Dr. Weaver, "the only real means to go to zero emissions is to put a high price on emissions".

Dr. Weaver said "We are at a turning point", where option number one is a fundamentally different technological and behavioural world, where we think very carefully before releasing CO2 to the atmosphere. The other path is a world in strife. "We will be having environmental refugees on a scale where we won't know how to deal with it."

In support of carbon taxes, yesterday the Green Party released a report commissioned by the government to determine the economic impacts of a carbon tax. (Thanks to Challenging the Commonplace for the tip.)

The report – Cost Curves for Greenhouse Gas Emission Reduction in Canada: The Kyoto Period and Beyond – concludes that the GDP impact of a $50/tonne tax shift is less than 0.1% of GDP per year until 2010, is virtually zero during the next five years and is then positive after 2015 (see chart below).
Further, the report projects net financial savings to those who take action as a result of the tax shift, after taking into account the investment in emissions reductions. At $50 per tonne, that windfall comes to $13.8 billion by 2010 and climbs from there (see chart below).

“Mr. Harper’s ridiculous claim that taxing carbon will bring about economic ruin and a recession is starkly contradicted by his own research,” said Ms. May. “In fact, this report shows a positive impact on GDP beginning in 2015. With this in the public domain it is clear that Mr. Harper is deliberately distorting the evidence. Mr. Harper’s fear mongering on a carbon tax is a deliberate and premeditated effort to demonize a sensible plan.

“The government’s own analysis proves that a $50 carbon tax shift will benefit businesses and individuals, and will achieve deep cuts in greenhouse gas emissions. The Prime Minister should now explain to Canadians why, in the face of this compelling evidence, his government stubbornly refuses to consider the carbon tax option and continues to viciously attack those who do. Mr. Harper must bring some honesty into this debate.”
The Greens propose to do just this:
The Green Party of Canada would implement a $50 per tonne carbon tax shift – with matching cuts in income and payroll taxes – as the cornerstone of a comprehensive plan for a green energy future that will reinstate Canada as a leader in the global campaign to prevent catastrophic climate change.
The Liberal Green Shift plan starts at $10 at tonne and increases to $40 a tonne over four years.

Update: The Green Party had originally released the "Cost Curves" report on June 20, 2007. They re-released it on September 12, 2008, linking back to their original 2007 announcement. But the Conservatives are still trying to scare people away from the mild Liberal version of the plan with talk of a recession and even a threat to national unity.

Of course, the other way to price carbon is using a cap-and-trade system, as is proposed by the NDP. They plan to sell carbon credits starting at $35 a tonne.

Which way is best? I don't know - but we need to decide and move forward with one of these options very soon!


Chrystal Ocean said...

Enjoyed your post, and thanks for the hat tip.

While the media emphasis on the plans by the Liberals and Greens has been on the carbon tax (and very little on the shift aspect, thereduction of income and investment taxes), it should be noted that both parties include in their overall climate plan a cap and trade system.

Their arguments are that the tax changes can be implemented immediately while a cap and trade system will take much longer to set up.

Therefore it isn't that the Liberals and Greens don't recognize the value of cap and trade. They do. It's a matter of the order in which these programs can be implemented.

LNeumann said...

Thanks for the comment Chrystal - that's a good point! I haven't had time to review all of the policies in depth yet (hence the links we've added to the blog).

ydzabelishensky said...

We have covered the folly of the Conservative Government's economic arguments for not implementing Kyoto before -- see the posts labeled "Baird" in this blog.

Now that the government's own suppressed study is out in the open, will they finally admit that they were wrong?

Unfortunately, I wouldn't hold my breath on this one.

ydzabelishensky said...

It's a good thing that I haven't been holding my breath since June 20 of last year :-)

As the Update in the main blog post above points out, the "Cost Curves" report is not really news, having been originally released by the Green Party of Canada on June 20, 2007. But the Conservatives persist in their scare tactics against carbon pricing. And the mainstream media seem to report these Conservative pronouncements almost uncritically. As David Greer Points out in his Letter to the Editor of the Globe and Mail on September 13, 2008,

"The Globe should have replaced its alarmist front-page headline with the more balanced one above the continuation of the story on an inside page: 'Economists Challenge Harper's Warning Of Recession If Green Shift Goes Ahead.'

"If we're to make headway on the most pressing issue facing the world today, we need reasoned debate on far-sighted solutions rather than self-serving fear-mongering."