Friday, May 23, 2008

Layton Talks Carbon Tax

Jack Layton outlined his ideas about tackling GHGs yesterday:
Canadians believe that it’s high time we place a price on carbon.

While many, like me believe that the most effective way to price carbon is through a cap-and-trade system where the big profitable polluters begin to pay their fair share, others suggest a carbon tax.

Advocates of a carbon tax suggest that by making the costs for certain things more expensive, people will make different choices.

But Canada is a cold place.

Heating your home is not a choice.

Already, far too many seniors on fixed incomes, single-parents, renters, people who live in the far north – are forced to choose between putting food on the table or heating their home

I don’t want to make that decision even more difficult.

Instead of making it more expensive to heat your home while consuming the same amount of energy and emitting the same amount of pollution, I want to help make it more affordable to heat your home – by helping to make it more energy efficient and pollute less.

We can do it through a national energy weatherizing program. The costs can be absorbed by ensuring the big polluters start paying their fair share.
This is a decent start for Layton. He needs to explain the NDP position on the carbon tax, because people like me see it as necessary. I agree that home heating is problematic. A blanket carbon tax on home heating might be a step too far, at least in the short run. Also, I like his idea of retrofitting homes to make them more energy efficient.

However, I have a problem with Layton's complete dismissal of a carbon tax. I think it is part of the mix. Yes, we need cap and trade. Yes we need to stop subsidizing the oil industry with billions of tax dollars and yes we need a carbon tax (at least on gasoline to start). It seems to me that none of these approaches should be mutually exclusive.

We should have a carbon tax on gasoline because consumers of gasoline are contributing to GHG production. We need to change consumption patterns and a carbon tax on gasoline should be considered as a way to accomplish this change. We should combine that with a cap and trade system where the big polluters pay for their pollution. Finally, the revenue from these programs should go into a fund to pay for improvements to public transit and initiatives like the national housing retrofit program. The idea of "revenue neutrality" is really a non-starter for me because as Layton says, that is really just moving expenses from one pocket to another (and if the government is not getting any more revenue then it can't fund things like mass transit and home retrofit programs).

I understand that the NDP does not want the Liberal Party to get any traction out of its carbon tax proposal, but there are plenty of legitimate problems with the Liberals' proposal to pick on, without dismissing the whole idea. A carbon tax is an idea whose time has come.
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  1. AnonymousMay 23, 2008

    Just how much colder than Sweden is Canada? Maybe we could just have a carbon tax in Vancouver, like they will have in Colorado (I guess the people there don't know it can get cold). Sweden has such a low poverty rate too -- what were they thinking?

  2. I agree we need a carbon tax, but we must not endanger people in the process. Do you have any information about the Swedish plan you could share? I suspect they were quite careful to make sure that measures were in place to safeguard the poor and elderly. If the Liberal plan had those safeguards, my guess is about half of the Liberal caucus would reject it.

  3. AnonymousMay 23, 2008

    I don't know of a source which gives detail of how this carbon tax interfaced with income -- sounds like it was just a fixed tax, first implemented in 1991. Renewable energy sources (like biofuels) are exempt. There is a recent Guardian article which says these are more widely used in Sweden.

    I don't want to give you a hard time. It sounds like we agree, both carbon tax and cap and trade are useful if done correctly, both industry and citizens should be involved, and we should make sure that everyone can afford to do their part and still have what they need (for heat and transportation).

    However, Layton has been making some blanket statements which seem like scaremongering. When Layton said in Parliament that it was unfair to ask people to pay more to heat their homes, he didn't exclude those with Hummers sitting on their expansive heated driveways. If he actually thinks all Canadians should be encouraged to do their part, he sure isn't getting that message across. Rather the opposite. There are numerous right wing blogs and commenters who think we should do NOTHING who are applauding Layton.

  4. Yes, it does sound like we agree for the most part. I don't mind Layton being cautious, because I suspect the Liberals are making stuff up on the fly. However, he should not just dismiss good ideas out of hand.