Yes, Dean Del Mastro, emission regulations have costs -

Yes, Dean Del Mastro, emission regulations have costs

(And they’re actually larger than those of a carbon price)


This is from last Thursday’s Hansard:

Mr. Dean Del Mastro (Parliamentary Secretary to the Prime Minister and to the Minister of Intergovernmental Affairs, CPC): Mr. Speaker, picking up a bit on where the hon. Minister of Canadian Heritage left off, it is not just that the Canadian public rejected Liberal proposals over the last three campaigns, of course mindful of the Liberals’ woeful record with respect to climate change, but it is something to hear the Liberals continue to retread through ideas that have been rejected and present them once again as though they are new and should be taken up even though Canadians have said something quite different.

Does the member understand that there is a world price for oil, there is a world price for gasoline and that oil companies like the idea of a carbon tax principally because they will get the world price for oil or gasoline regardless, but the carbon tax will then be paid by Canadian consumers and it will completely exempt them? However, if they are actually regulated, they will have to absorb these costs and only receive the world price for oil and gasoline. Oil companies are not charitable organizations. They are an important industry for Canada, but they are not charitable.

It’s very true that oil companies are not charitable organizations–which is why it’s not a good idea to make policy based on the assumption that they will passively absorb the costs of new regulations. It’s not at all obvious why firms would pass along the costs of a carbon price but not the (larger) costs of regulation.

Firms’ responses to new regulations depend very much on what form those regulations take, so unless and until the Conservatives outline what regulations they have in mind, we won’t know the exact mechanism by which the costs will be passed on. But if, say, the regulation imposes the use of a new technology that reduces profitability, we’ll see a reduction in investment and output by Canadian oil companies and consumers will simply avail themselves of more imported oil as domestic production contracts. This shift to imported, unregulated oil will attenuate whatever effect the regulations would have had. And although consumer prices won’t be affected–imports are set by world prices–the cost of these regulations will manifest itself in the form of reduced incomes.

This whack-a-mole game will play out regardless of the form the regulation takes. Regulation is costly, and those costs will, one way or another, be passed on to consumers, workers and savers.



Yes, Dean Del Mastro, emission regulations have costs

  1. The idea that a ‘conservative’ would advocate government regulation over setting a price of carbon and letting the market adapt is mind blowing to me. They should hand in their membership cards and close up their Ayn Rand shrines.

    • Setting a price on carbon is a tax by any other name. And it’s been a complete disaster in Europe and elsewhere, everywhere it’s been tried. It’s complete idiocy, it’s nothing more than just another scheme for leftists to assert more government control over our lives. Regulation is no panacea but at least it’s not another tax grab.

      • Regulations is also going to cost you but it won’t be so obvious. Regulations are costly on companies and they will find a way to pass it on plus it will result in less production, so the overall economy will suffer. I think there is a general agreement that regulations will end up costing us (and the Canadian economy in general) more than a carbon tax or a cap-and-trade system. The other problems are that regulations are costly to properly enforce and they do not produce any revenues for the government, revenues that could be used to reduce income taxes for example. BC, Alberta and Québec have carbon taxes and the sky has not fallen.
        Conservatives are hypocrites. They are increasing our costs left, right and center (e.g., higher tariffs, higher EI contributions, regulations) and they count on people like you not to see it because the word tax is not there. Some of us are not so blind and we are not fooled by the games played by the Harper government.

      • Untaxed carbon emissions also have costs. They take the form of health effects and environmental damage, for example. Not pricing carbon just means that these costs happen to lie where they fall, and whoever is stricken by them bears the cost, or that they are borne by all Canadians through health care. It makes far more sense to price carbon according to its actual cost — this is a much fairer and more market-oriented solution, since it requires the individual beneficiaries of carbon to determine whether they would like to pay its total cost.

        • Actually, carbon is beneficial to the environment.

          • If I were a scientific illiterate, I wouldn’t go on the internet and shout it all over the place. But I guess to each their own.

          • What do you mean if? You are both a scientific illiterate and an illiterate. You’re also advertising it.

          • damn, I sure pulled a fast one when I wrote my science based thesis… lmao. I think I outlined my opinion on people like you below. We should reach for a strait jacket when a climate change ‘skeptic’ (i.e. loud moron) comes around crying conspiracy.

          • You can repeat your craziness all you like. You can’t make things up. There is no sulphur cap and trade, you complete moron.

      • True, it isn’t a tax grab. It increases the price a consumer pays without adding government revenues. So, worst of all worlds.

        It also prevents innovation in the market place:
        No $$$ for low tillage farmers
        No jobs in carbon sequestration
        No EOR using CO2
        Need I go on?

        As for failures, why don’t you go back in time and see how acid rain issues were solved. So really your whole reply is a bit embarrassing now isn’t it?

        • I’m pretty sure that if you believe that pricing carbon is part of some sort of leftist conspiracy to control your life you aren’t easily embarrassed.

          • Very good point. This leftist conspiracy ‘carbon tax’ thing makes the moon landing and 9/11 truthers look very sane and well adjusted.

            To Wit:

            Every national scientific institute in the world, NASA, 98+% of climate scientists, the UN, and Al Gore have colluded seamlessly for more than 30 years without a hint of conspiracy to redistribute wealth using a bogus scientific theory as backing.

            Every major corporation in the world including the likes of Shell and Exxon (who have the most to lose and unlimited budgets to fight) have been cowed into submission and asked for a carbon tax.

            Only a small well paid cottage industry of ‘scientists’ with dubious backgrounds, evangelicals who know this as an inherent criticism of creationism, and other various right wing nutcases can save us…

          • Wrong. In fact, there are about 10 falsehoods in just 5 paragraphs.

          • The problem with this Disqis thing is you keep showing up in my email inbox. I KNOW you’re wrong, you think you’re right. I don’t think you’re going to change your beliefs without some shock therapy and happy pills.

            Until you repudiate the accumulated knowledge of 30+ years of hard work by people far better, brighter, and more equipped than you. Using something more than crackpot conspiracy theories you are going to convince me of nothing buy your inadequacies.


          • You are such an arrogant neanderthal. I’ve shown you’re wrong and then you write these silly diatribes about being holier than thou. Go back to the cave you came from.

        • No jobs digging holes and refilling them. No jobs breaking windows and replacing them. You have heard of the broken window fallacy?

          What a bizarre analogy you presented.
          1. Acid rain was a real problem.
          2. There was no sulphur tax
          3. There was no sulphur credits market
          4. There was regulation
          5. The problem was solved

          And you call my comment embarrassing?

          • all you do is further reveal your ignorance. Sulphur is under cap and trade…

            Learn of what you speak if you’d like to be taken seriously

          • No it isn’t.


            This has big words in it but I’m sure you’ll get the idea. As I said, try knowing of what you speak.

            Best to keep your mouth shut and be thought a fool than speak and remove all doubt – Mark Twain

            Good bye!

          • The EPA is a US agency you idiot. This is Canada.

          • Um yeah, and most of the acid rain problem in Canada originated in the US, who then used cap & trade to solve the problem. You know that clouds aren’t stopped at the border, don’t you?

            Of course Canada is also responsible for significant contributions to the problem. But then, the same approachis also being used here.
            So, what’s your preferred appellation? Imbecile? Ignoramus?
            Let me know.

          • Canada reduced SO2 emissions by close to 50% entirely through regulation, you twit. Apparently you and your friend Glynn are having a very difficult time wrapping your heads around this basic and obvious fact. I know that thinking is difficult for you, but just try to put a thought together once in while.
            Glynn thinks he’s so smart that he can lie to people and get away with it, but when he encounters someone that knows more than him, he has a little difficult covering up his falsehoods. You, on the other hand, you’re just dense.

          • You tried to claim the acid rain problem was solved without a cap & trade system. Most of the problem originated in the US which did indeed institute a cap & trade system to reduce emissions. Furthermore, for the past 10 years Ontario has indeed had a cap & trade system.
            The only lie here is your patently false claim that acid rain was solved without an emissions market.

          • We are talking about Canada here, you idiot. And the acid rain problem was solved long before Ontario instituted a experimental cap and trade system (of which almost no actual trade has occurred). All of Canada’s emissions reductions, of about 50%, occurred entirely through regulation, you complete idiot. I know you’re dense, but keep trying, you can understand this eventually. I will repeat: all of Canada’s emissions reductions occurred through regulation. Here’s one more try, read very slowly: all of Canada’s emissions reductions occurred entirely through regulation.
            If you want to talk about the US, or Mexico, or Botswana, or the Republic of Whatever, I really don’t care, but then you should say so. But if you happen to do that, then you’re on thin ice there too, because almost all acid rain reductions across the entire world occurred through regulation, not cap and trade, including reductions of 70% in Europe. So your stupid diversion fails as a diversion. Regardless, I’m talking about Canada, and so is this blog article, so is Wherry, and so is Dean del Maestro, you idiot. So was Glynn until he realized I was calling him out on his lies and then he tried to pretend the EPA was Canadian. The entire discussion is about emissions regulations in Canada, whether CO2 or SO2 or the hot air coming out of your pie-hole.
            Secondly, stop making things up, stop the stupid lies. I didn’t claim anything! It was your friend Glynn who claimed the acid rain problem was solved by cap and trade, when it is absolutely clear that it was not. Secondly, most acid rain in Canada is and was caused by emissions in Canada, your claim that it was a US problem are also lies. Yes, Canada and the US came together to negotiate a cap on emissions in a treaty. No, they did not negotiate cap and trade, they negotiated emissions reductions, and if the problem was a US problem there would have been no need for a treaty, liar. If acid rain was just a US problem then why in heck did Ontario recently try out their own experimental cap and trade? Why in heck did all of Canada’s provinces reduce emissions by 50%? Because acid rain is and was a Canadian problem! The article is about emissions reductions in Canada, whether CO2 or SO2 or methane or whatever. Can you not avoid contradicting yourself?
            So give your head a shake, you buffoon.

          • Unfortunately, have a ragegasm won’t alter reality to conform to your desires.
            The majority of airborne so2 in Eastern Canada is indeed from the US.

            scf reads these word: “Most of the problem originated in the US”
            and responds: “If acid rain was just a US problem…”
            Oh dear. Is it a reading comprehension problem or an honesty problem?

            “Why in heck did all of Canada’s provinces reduce emissions by 50%?”

            Oh, gee I don’t know. Oh, wait I’ve just looked up the answer…: ” Yes, Canada and the US came together to negotiate a cap on emissions in a treaty.” and there’s more: “Most of the problem originated in the US” (I trust you’ve familiarized yourself with the meaning of the word “most” since reading the portion of my comment above?)

            Not to make matters worse for you but you’re not even right about all of Canada’s reductions occurring without cap & trade: In fact, after plateauing in the 90s, so2 emissions began steadily falling once again under Ontario’s cap & trade program.

            And let’s not forget that, while Canada introduced a hard cap to control emissions (and for the last decade allowed for trading) the Conservatives have proposed nothing of the sort with their ghg regulations.

          • If your intention is to confirm that you are a buffoon, then congratulations, you’ve succeeded.
            I would be hard pressed to make any connections between what you said and what was said before. You appear to saying whatever crap comes to mind, for no apparent reason. Good for you. Congratulations.

  2. But regulations implemented for companies to clean up their act (technologies which will make for cleaner air and water) actually set out to accomplish something, namely to reduce air and water pollution.

    And so tell us, Wherry, what will Justin do? Will he introduce a carbon tax? Do you think that Justin should introduce a carbon tax?

    • Did you actually check who the author is? It is Mr. Gordon, not Mr. Wherry. Mr. Gordon is an economist. Go read his much longer article (the one he refers too). You will actually be a lot smarter when you’re done. Mr. Trudeau said he favoured putting a price on carbon but he was not sure at that time what was the best option to do that.

      • I apologize for having mixed up authors here. It is indeed Mr.Gordon who wrote the piece.

        Still, the fact remains that Justin is still as unclear about what to do with carbon. The difference between Justin and this government is, of course, that Justin is the better for it for not having to show his real colours. For Justin it is better if he shows no colours at all!

    • 1.) Regulations cost more. Much more. They also have to be enforced, which again costs money. That’s money that the Conservatives have no desire to spend, especially in the enforcement of regulations they don’t particularly want. Perhaps if you re-read the post, this time without the Official CPC Blinders on, you will get the gist.
      2.) Trudeau is not PM, the Liberals are not the governing party, and there is another few years before it matters what he or they will do. The only way the Trudeau attacks will make any difference is if Harper breaks his election law (again) and calls a snap election.
      3.) Why the attack on Wherry? I know that’s your go-to tack; attacking Wherry to disguise the fact that you have nothing to contribute to the conversation, but Stephen Gordon is not Aaron Wherry. Perhaps while doing the blinderless re-read from point 1, you can take a look at the byline.

      • I apologized already on these comment boards for having attributed the wrong author.

        • Actually, whenever the environment is mentioned you’re supposed to attack David Suzuki and Al Gore…

          • No need to further attack men such as Suzuki and Gore if they themselves have taken on that task and doing a good job of it! :))

            You can’t undo toast!

  3. I don’t believe the Harper Conservatives will actually do anything that would limit or control the oil and gas industry in any way, but I actually favour regulation of large emitters because, if done properly it would set an actual emissions reduction target rather than create incentives for conservation that the companies might choose to ignore.

    I think the economists have a point and that putting a price on carbon is a good idea, but the world is a lot messier than they imagine and I really don’t believe that consumer behaviour is the driver of change we hope it could be.

    Consumers frequently pay more for convenience or status for instance, whether that’s buying milk and bread at a convenience store instead of at a much cheaper grocery store or buying and driving a larger vehicle because of the status it conveys.

    Companies have often also made bad environmental decisions against their own longer term interests, for instance companies that high grade and process ore too quickly leaving lots behind in taillings ponds to goose quarterly profits or pulp mills that waste expensive chemicals and wood fiber instead of closing the loop and making more money.

    It’s no comfort that they might go out of business at some later date by being higher cost producers; their pollution stays behind.

    • ……” the world is a lot messier than they [the economists] imagine and I
      really don’t believe that consumer behaviour is the driver of change we
      hope it could be.”

      At least your eyes are open wide enough! Good for you!

      • I’ll answer your condescension with the explanation that my eyes are wide open in horror at the dearth of responsible governance on this issue. We replaced a decade of ineffectual Liberal climate policy with a decade of cranky Conservative denial. When will the leadership in Ottawa just shut up and actually do something, regulation, cap and trade, pricing, whatever?

        • What would you want this government to do? Take up the advise of an activist/scientist in the name of Hansen to then implement carbon taxes which do nothing in regards to stopping green house gas emissions, or would you like for this government to implement rules for better technologies to be used, such as this government has done on several fronts already?

          It is those technological improvements which really do make a difference when it comes to green house emissions, such as the regulated emission standards for vehicles.

          • Price has no effect on demand? Who knew!

          • I have never said that price has no effect on demand. Perhaps you believe that price has no effect on demand.

            I am saying that our lifestyles are such that oil and gas consumption will not decrease because the price of oil and gas goes up.

            All consumer products have oil and gas included before being consumed. And our societies are in the habit of consuming more, not less.

          • “oil and gas consumption will not decrease because the price of oil and gas goes up.”

            “I have never said that price has no effect on demand.”

            These two statements are mutually exclusive. Choose one.

          • It could very well be that the cost of a car goes up so high that such a car will not be purchased by you. You may then decide to buy a car which costs less. Demand for a specific car will thereby have been set by you, in that case.

            But that does not mean that therefore the lower cost car you purchase took less oil and took less gas consumption to bring it to market.

            It only means that for YOU some cars are too highly priced to be purchased by you. But nowhere does that mean that the lower cost car used less oil and gas to produce the lower end car.

            So yes, price can have an effect on demand without the cost of oil and gas to have been a factor.

          • Your example has no relevance to the mutually exclusive statements. Other variations in price are not the issue.

            Given all factors the same, either oil and gas consumption will not decrease because the price of oil and gas goes up, or you’ve never said that price has no effect on demand.

            Choose one.

          • I have already chosen, and just because you do not understand the contents of my post you are referring to, does not mean I have to repeat myself for your sake.

            Do the reading again, and things will become clear to you.

          • Assume I’m stupid and spell it out for me.

            Is it the first statement or the last statement that’s correct? Because it can’t be both.

          • Francien, they are contradictory propositions. There is empirical evidence, here. Demand for oil/gas is most definitely elastic. No need for hand-waving arguments.

          • One of the dangers of regulations, though, is that if it is too specific it actually hinders development of new technologies by insisting things be done a particular way. Simply setting and enforcing targets allows companies to explore all the available options.
            We won’t know for certain just how tunnel-visioned and restrictive the regs are until (if) they are tabled. But I’m inclined to agree with Gordon et al that the regulatory approach is likely to be more costly and lead to less innovation.

          • There are two things to be taken into consideration here:

            1. Governments around the world are forced to take the threat of global warming seriously because climate change has become a modern cause to be concerned about. Therefore, governments are doing something, Not enough real evidence is available on what might eventually happen with our worldly climate (scientists do differ on what is certain and what is probable) and therefore governments are not willing to go overboard either. But for governments to be taken seriously, they must be seen as doing something. And this government has implemented some measures to reduce green house gas emissions.

            2.The best innovation is consumer driven. And so real and market driven innovation will not occur until the majority of consumers will start taking global warming seriously enough. Most consumers right now are not concerned about global warming for real innovation to be set into motion. The demand simply isn’t there.

          • In otherwords, this government is pretending to do something, all the while intending to do nothing. You and I agree on this.

            A carbon tax is not particularly risky, if we use the proceeds to reduce other forms of taxation. BC has done this, with no demonstrable ill effects. We already have national carbon taxes in the form of fuel excise taxes. Implementing a revenue neutral carbon tax is a low-risk approach to addressing carbon emissions. Government regulation is high risk.

          • As to your first paragraph: No, this government is actually doing something and green house emissions have gone down.

            To your second paragraph: if you think that a carbon tax is a good thing, let Justin propose one.

          • JT has my permission to propose a carbon tax, along with every other politician in Ottawa. Will that satisfy you? I don’t know why you keep telling me to make JT do things.

          • Well, Justin isn’t doing much on his own.

          • Remind me, did Harper, Mulcair, or May publish their platforms in their first 30 days on the job as leader? I think this particular line of criticism is more appropriate closer to election time. I think it’s enough that JT stated his support for carbon pricing, which ought to be controversial enough. CPC contends that carbon pricing=carbon tax=armaggeddon, after all.

          • But aren’t some people thinking (pushing) that global warming must be addressed right now?

            Harper has never admitted that global warming is that alarming. But I’m just curious if Justin thinks it is alarming enough to say something real, or if Justin believes men like Hansen and so forth.

            Justin remains quiet on the subject of global warming and I can understand why. It’s just fun watching him.

          • I don’t disagree with anything you have said there. But I’m not convinced that regulating is a better route than, say, a cap-and-trade system.

            If regs are tightened to the point where they specify the use of technology A, for example, and then technology B turns out to be better, companies can’t use B without first getting government to change the regs. So they keep investing in a less efficient technology to meet the regs, and fall behind in the development of the other technology.

            Cap-and-trade would not be tied to any one technology or process and so companies can be more responsive.

            We’ll have to see where the regs take us, I suppose, but I think it’s the wrong approach – and that the approach is being taken primarily for the political expedient of being able to stand apart from the opposition rather than for any practical reason.

          • Yes, we will see what happens over the next while.

            For me, it is important to know what Justin will do.

          • Then ask him.

          • Why ask him? It’s too much fun watching the process of Justin trying to make up his mind. That is the political process in action. So much fun to watch, don’t you think?

  4. So del Mastro is speaking in the House again. Does this mean his election finance scandal has been off the front page long enough for Harper to let him off the leash?

    • He’s still MIA at the ethics committee meetings. I think he’s missed something like 34 or more meetings, going back to when his own ethics started being discussed in the media.

      • Unless the point of the committee is to instruct him on ethics, it’s probably just as well…

  5. “… but it is something to hear the Liberals continue to retread
    through ideas that have been rejected and present them once again as
    though they are new and should be taken up even though Canadians have
    said something quite different.”

    What is it Del Mastro thinks Canadians have said?

  6. The Harper Government is usually big on rhetoric, but short on facts. They spend all their time campaigning instead of governing. When it comes to the economy, they are hacks. They worship boutique tax cuts, not because they utilize economic resources effectively; but because they can be used to target voters.

    I think Trudeau could really burn Harper on the economy by opposing all his extravagant tax expenditures especially the ones he plans on running on in 2015. He can come out and say he’s going to clean up the tax code, reverse wasted tax expenditures, and use the savings to cut personal income taxes. This would be a real economic action plan that economists could get behind.

    It would certainly cut Harper off at the knees; but in reality, it would just expose him as the charlatan he really is.

  7. Many (most?) may not agree, but here is a pretty interesting hypotheses of what’s going on with all this jiggery-pokery in the exciting world of regulation and the stealthy push for a convenient lack thereof: