A rough guide to the Conservatives’ carbon tax farce

Have you been afraid to ask? Here’s what you need to know

Herein, everything you need to know to understand the Harper government’s latest attempt to attack the NDP.

So what is the basic issue here?

In terms of public policy, this is a debate about putting a price on carbon. There are two ways to do this. You can directly tax major emitters for the carbon they release into the atmosphere. This is generally referred to as a “carbon tax.” Or you can set a limit on the amount of carbon a company can release into the atmosphere and then issue permits to exceed that limit which companies can sell amongst each other. This is generally referred to as “cap-and-trade.” Either way—either set by the government or the open market—a price on carbon is established. And if it costs money to release carbon into the atmosphere, companies will have an incentive to produce less carbon. That incentive will presumably encourage companies to find ways to pollute less (consumers will also presumably have an incentive to seek more environmentally friendly options). And that will presumably help counter the problem of climate change. If the government takes in revenue as the result of a carbon tax or cap-and-trade, that revenue can be used to fund green energy and emission-reducing policies and initiatives, as well as reducing income taxes to counter the impact of the higher costs that impacted companies might pass on to their customers. Here is the Pembina Institute’s briefing on carbon pricing, here is the OECD’s briefing on carbon markets and here is the Environmental Protection Agency’s guide to cap and trade. Here is Wikipedia’s rundown of countries and states that have considered or implemented carbon pricing. And here is Stephen Gordon’s guide to the economics of pricing carbon.

What has the NDP proposed?

In its 2008 and 2011 platforms, the NDP proposed a cap-and-trade system. When he was seeking the leadership of the NDP, Thomas Mulcair presented his own cap-and-trade proposal. (Brian Topp quibbled with Mr. Mulcair on one aspect of Mr. Mulcair’s proposal.)

What do the Conservatives say about what the NDP has proposed?

The Conservatives say the NDP proposal is a terrible, ruinous thing.

That sounds very serious. But your use of the word “farce” seems to suggest something silly is going on here.

You are very perceptive. There are at least three parts to the farce.

First, the Conservatives previously supported and promoted cap-and-trade. And they did so repeatedly and over a number of years. In their 2004 election platform, the Conservatives said they would “investigate a cap-and-trade system that will allow firms to generate credits by reducing smog-causing pollutants.” The commitment was repeated in the party’s 2005 policy declaration. In 2008, the Conservative party’s policy declaration expressed support for “a domestic cap-and-trade system that will allow firms to generate credits by reducing smog-causing pollutants.” In May 2008, John Baird celebrated the launch of a carbon market in Montreal. “Carbon trading and the establishment of a market price on carbon are key parts of our Turning the Corner plan,” he explained. In their 2008 election platform, the Conservatives promised to help “develop and implement a North America-wide cap and trade system for greenhouse gases and air pollution.” The Harper government repeated the pledge in the subsequent Throne Speech. In June 2009, Jim Prentice announced an offset system that would “generate real reductions in greenhouse gas emissions … by establishing a price on carbon.” In September 2009, Mr. Prentice lobbied the Alberta government to support cap-and-trade. In December 2009, the Harper government claimed to be “working in collaboration with the provinces and territories to develop a cap and trade system that will ultimately be aligned with the emerging cap and trade program in the United States.”

During the 2011 election, the Conservatives decided they opposed cap-and-trade. But what’s more, the Conservatives decided that cap-and-trade and a carbon tax were the same thing. And they have maintained this stance in attacking the NDP. Any attempt to establish a price on carbon, Conservative MP John Williamson informed the House of Commons on Monday, is a tax on carbon. Here then is part two of the farce. Because while the Conservatives were proposing cap-and-trade in 2008, they were loudly opposing Stephane Dion’s proposal for a carbon tax. If cap-and-trade is the same thing as a carbon tax, then the Conservatives were both proposing and opposing a carbon tax in 2008.

Finally, there is the lingering possibility that a Conservative government might implement a cap-and-trade system someday. When cap-and-trade legislation stalled in the American Senate in 2010, hope of a continental cap-and-trade system was stymied and Environment Minister Peter Kent said the Conservatives weren’t prepared to go it alone. But—speaking just two weeks after the 2011 election, during which the Conservatives declared cap-and-trade a terrible thing—Mr. Kent allowed that cap-and-trade was still a possibility in the future. I followed up with Mr. Kent’s office in July  and Natural Resources Minister Joe Oliver earlier this month and, despite its strident objections to the NDP’s cap-and-trade proposal, the Harper government remains unwilling to definitively rule out pursuing cap-and-trade if the United States decides to pursue cap-and-trade.

How has the Harper government explained these discrepancies?

It hasn’t. The Conservatives have tried to assert a couple nuances—see here and here—but neither were particularly persuasive. Alternatively, the Prime Minister’s Office has tried to assert a statute of limitations on the human memory. No explanation has been offered for how the Conservatives went from proposing cap-and-trade to opposing cap-and-trade or how they reconcile their current position on cap-and-trade with their 2008 election campaign.

What are the Conservatives doing instead of putting a price on carbon?

The Harper government is gradually moving forward with regulations for each carbon-emitting sector.

Oh, but since there’s no price on carbon involved, there won’t be costs associated with this approach, right?

There will be costs associated with any approach to reducing greenhouse gas emissions. The Canadian Press recently tallied billions in costs for the regulations announced by the Harper government so far. The Conservatives are also investing heavily in developing carbon capture and storage technology. But the Canadian president of Royal Dutch Shell recently argued that CCS won’t be widely adopted unless a price on carbon is established.

Where do things stand in the United States?

Both Barack Obama and John McCain endorsed cap-and-trade during the 2008 presidential election, but, as mentioned, cap-and-trade legislation stalled in the Senate and there has been little movement since. Democratic Congressman Jim McDermott has introduced carbon tax legislation in the House and former Republican congressman Bob Inglis is advocating for a carbon tax. The Washington Post’s Ezra Klein has this theory that a carbon tax could be part of a grand bargain between Democrats and Republicans to fix the American federal budget.

So if the United States doesn’t move forward with cap-and-trade does that mean there won’t be a price put on carbon here so long as the Conservatives are in power?

First of all, we probably shouldn’t underestimate a Conservative government’s ability to completely reverse its position on this subject. Second of all, British Columbia and Alberta already have carbon taxes, while British Columbia, Manitoba, Ontario and Quebec are signed on to the Western Climate Initiative, which intends to establish a co-ordinated cap-and-trade system. Quebec is supposed to launch its own cap-and-trade system next year.

Well this is quite a situation.

Indeed. And we haven’t even talked about the torturous existential questions about politics and journalism this raises. We’ll save that for next week’s “A rough guide to things that should inspire profound reflection on the part of all of us.”

A rough guide to the Conservatives’ carbon tax farce

  1. A confederacy of dunces.

  2. Oh, give it up Wherry.

    You would have to be a fool not to realize that an NDP government would cripple the oil industry in Canada as they pay back their naive supporters in central Canada. I don`t care if you call it a C tax or a C and T tax or just a CAT tax, the NDP would drive the oil companies out of the country.

    If you really want to know what an NDP government would look like take a look at the first move their separatist cousins in Quebec did recently. They did not reassure the few remaining profitable industries in the province that they should remain there—they did not give any hope of new jobs for the unemployed—no, they rolled back the nominal increase in tuition passed last Spring to pay back their naive voters.

    In your continued effort to slam the Harper government you have entered a dangerous fantasy-land with the dippers.

    • Welcome PMO troll.

      • homer doesn`t like the truth.

        • …and Andrew is completely allergic to it

        • I’m not seeing any evidence of that yet.

    • Lorraine Mitchelmore, CEO Shell Canada, advocates a price on carbon. And she’s no “fantasy-land dipper” according to her bio:

      Lorraine is a Board Member of the Canadian Association of Petroleum Producers, the Conference Board of Canada and a member of the Catalyst Canada Board of Advisors. She is also a member of the Canadian Council of Chief Executives.

      http://www.asiapacific.ca/about-us/board-directors/lorraine-mitchelmore

      • Now, tell us where Lorraine said she would like to have an NDP government impose these taxes on the oil industry.

        If you agree with Wherry`s tactics, then you must want to see the Harper government replaced with a Mulcair government—this is where fantasy-land becomes a tragic reality—-be careful what you wish for.

        • I think Lorraine and other like minded individuals would like to see it implemented sooner than later. And since the current gov’t is Harper’s, this would mean she would prefer the Conservatives.

          If I agreed with your deny/delay tactics, I think I’d be more likely to see the NDP replace the Conservatives, not less.

        • That was a fascinating pivot.

          So, sure, even the oil patch agrees that there should be a price put on carbon, so now the argument becomes WHO should put that in place. If the NDP do it, like they say they’re going to, then that will be calamitous. If the Tories do it (despite the fact that they’re now suggesting that putting a price on carbon is a bad thing) then that would be fine.

          I don’t think anyone’s remotely arguing that this is a reason to replace the Tories with the NDP. What people are arguing about is the fact that a price is almost certainly going to be put on carbon at some point, and the Tories, who once advocated for such a policy, as recently as 3 years ago, are suddenly acting as though not only is it never going to happen (although, they admit, it might well happen) if it did happen it would be TERRIBLE.

        • Hell, I’d take the Rhinoceros party over the current clowns…

        • I’ve commented on this before, but perhaps an analogy is in order: Just because someone points out that you’re an idiot it doesn’t mean they’re saying anybody else is smarter.. just that you are an idiot.

      • Rex Tillerson, CEO of Exxon Mobil, advocates a Carbon Tax, too. It’s more transparent than a cap and trade system (for producers and consumers alike), is better for the free market, and will prevent the emergence of a “Wall Street of emissions brokers”. Of course, he first advocated this while the Conservatives were bashing Dion during the 2008 election for holding the same views. No Canadian media outlet covered THAT farce. 4 years on, we start to see the press waking up. Canada: always playing catch-up.

    • Yeah they’ll be “driven from the country they’ll go take their big oil rigs and scoop up the oil from….where, precisely?”

      • No, they would simply shut down their business in Western Canada, and wait out the storm until a more reality-based national government reappeared. They have enough cash reserves that they would survive nicely.
        Meanwhile there would be hundreds of thousands of good paying jobs lost, a major decrease in tax revenue, spiralling national debt, zero investment confidence, and a confused rest of the world looking at Canada.

        • And locusts…you forgot the locusts. There must be locusts for it to qualify as an epic disaster.

          • Forget the locusts.

            ZOMBIES!!!

    • Setting aside all the discussion around which party proposed what and made those proposals when, I’m interested to get your take on the actions that the government actually has taken wrt GHG; they have, in fact, been diligently working their way through creating regulations on a sector by sector basis. According to the Environemnt Minister, those regulations have already put Canada 50% of the way to meeting our Copenhagen targets.
      Would you say that those regulations are imposing additional costs on the sectors that have already been regulated? Assuming that there are costs incurred to meet those regulations – it’s hard to believe that there wouldn’t be some additional costs – does it make sense that those costs are being passed along to the end users of the products? And assuming that both of those conditions are true, does it really make a difference to the end user where the additional costs originate?

      • Take a close look at the data. Then take a look at the US submission to the UNFCCC. You will see that the biggest reduction in GHG occurred at the same time as the massive global recession, corroborated by the US submission. If you believe the Conservatives were responsible for the reduction in GHG you can’t escape the conclusion that they got there by engineering the greatest financial disruption in recent history.

    • Wow…totally paranoid…there have been NDP governments in this country, quite a few of them, and in no case did the stars fall from the sky or the ocean boil to vapour, So Andrew, a word of advice, get a grip.

      • Or! in BC they went to jail

        • What are you referring to? I know it can’t be “Bingogate” because there was no “they” and no jail. There was one person given house arrest.

          “They” could refer to the two ReCreds convicted for “Railgate”, but again, they recieved only house arrest.

          • Typical lefty apologiests. The party manages to pin the blame on one or two schmucks and simply by saying “it’s okay now”, it’s okay now? Pass that tip to the quebec government – they’re in bed with the bloody mafia!

  3. Hey, this is so good, it should be immortalized with its own wiki entry.

    I’ve checked. Royal Canadian Tax Farce is available.

  4. Conservatives lie, it’s what they do
    They lie to me, they lie to you
    They lie about their carbon plan
    And about the platforms on which they once ran.

  5. Agree with all written in the column. But the NDP have not done themselves any favours by repeating over two elections that carbon taxes are bad and hurt people by costing them money and then pretending that a cap and trade doesn’t cost people anything. It seems a bit late to educate Canadians on carbon tax versus cap and trade when so much misinformation flew from both parties over the past two elections and continues to fly. Mulcair makes it sound like carbon taxes and cap and trade live on two different universes. Depending on how each is implemented, to the average Canadian the effect could be identical for the two.

    • Yeah that’s the flip side of this farce all right. Dion must be smirking about now?

    • It would be idential – businesses would pull up and move to countries which do not implement the extra taxes and regulations and those who remain will be forced to raise prices. In the first case, jobs are lost and goods made here will be made in China and India, soon Africa and will be cheaper and of substandard quality. In the latter case, we’ll simply pay more. Either scenario is not good for Canada.

  6. Well done, Aaron.

  7. actually,
    the basic issue is the conservatives are lying.

    • It’s getting to the point when it will only be news when they don’t…

  8. “If cap-and-trade is the same thing as a carbon tax, then the
    Conservatives were both proposing and opposing a carbon tax in 2008.”

    Sounds about right. Although i think it was after the fact, the alternative would be conceding too much altogether to these guys – they’re just too thick or opportunistic to get it.

    Can we now reasonably conclude this was a smoke screen all along? They never seriously intended to implement a carbon tax or any other pricing measure that would impact the oil patch in particular; they were simply ragging the puck – particularly during minority.Once Prentice was gone they even gave that up. Following with Baird as EM was a sure sign of that.
    The only year missing any kind of statement is 2010 , around the time Prentice left – coincidence? I wonder if he was the only really serious proponent of carbon pricing all along?

  9. Regulations also put a price on carbon – there will be costs and those costs will be passed on, eventually, to consumers.
    And sector-by- sector regulations will likely results in higher costs for consumers than a cap-and-trade system because cap-and-trade allows the market to select lower-cost GHG reduction technologies – no matter the sector – while sector-sprcific regulations will cause each sector to make their own reductions even if the technologies available are more expensive than the technologies in other sectors.

  10. Wow, is Aaron ever passionate about this!

    • I haven’t seen Aaron this passionate since the Conservatives were war criminals in Afghanistan. or Nazis for getting rid of the long-form census. Wow!

      Going forward, don’t ever accuse Aaron of being a mouth-piece for the Liberals – it is a new Era!

      • This whole “it is a tax” is such BS when we all know it is clearly Dutch Disease caused by greedy redneck Albertans

        • Why not rename it Alberta Disease? = give it a Canadian flavour

          • what are you adding to an intelligent conversation regarding canada’s future
            TSYM…………………

          • Ha ha Ah f**k you are funny! You are so cliched Canadian I almost hate being a Canadian

          • then we have something in common TSYM…………………….

            i almost hate that your canadian as well………………………….

        • You sure hate those evil Albertans don’t you TSYM. With all their slimey money paying your way. Just like your parents, the old fuddy-duddy’s.
          Ever thought of going there and giving Albertans a piece of your mind? Tell them how much you hate them? Shake your fist at them? Spit in their eyes?
          Just like Professor Mulcair said, Albertans are the cause of all Canada’s problems.
          I saw and Albertan the other day, screamed at her for being Hitler/Satan for a good half hour. She went crying off to her mother. When she grows up I’m sure she’ll remember my righteous anger.

          • haha…she probably kicked your a@@ or tried to run you over with her truck

  11. So we learn that:

    - The Conservative’s only criteria for their pronouncements are “can we sell it?”, “will it be popular in Fort Mcmurray?” “and can we work in some partisan crap?”

    - Some form of carbon pricing is the only logical solution to our situation re the environment AND the economy — it only awaits a government with a modicum of both common sense and integrity — obviously we’ll have to wait til after the next election for that government.

    • Have a read at Suncor’s site. All the big players at Fort Mac have been preparing for some kind of carbon tax for years.

      Suncor continues to be guided by the seven-point climate change action plan we first adopted in 1997. This plan calls on us to:

      manage our own green house gas emissions
      develop renewable sources of energy and an environmental performance plan
      invest in environmental and economic research
      use domestic and international offsets
      collaborate on policy development
      educate employees and the public,
      and measure and report our progress with sustainability reporting.

      http://www.suncor.com/en/responsible/1394.aspx

    • How do you figure you and I will benefit from paying more taxes? It’s not at all a logical solution, unless you are hoping for what it REALLY will accomplish, which is more wealth redistribution. We in the so-called middle class cannot afford these hair-brained schemes, heck, with no raises in the last decade, it’s tough enough to afford a family. Get out of my wallet!

  12. No one cares what you “watermelons” think, Wherry. The Great recession has killed the ManBearPig that was AGW.

  13. Aaron. Liquefying all that natural gas in BC to ship to Asia requires burning a lot of natural gas to produce the electricity to liquify the natural gas. And those LNG facilities may be capital intensive, but they are not labour intensive, unlike the oilsands which produces jobs across the country. i.e. LNG is the epitome of Dutch Disease, far moreso than the oilsands.

    BC’s future finances are dependent on LNG exports.

    It is going to be a thing of wonder seeing Mulcair trying to win seats in BC next time when he is going to slap a big carbon cap-n-trade tax on the LNG facilities in BC, and scream about how commodity exports are destroying manufacturing in Ontario. I can’t wait to hear what Premier Dix is going to say about all of this when it happens.

  14. The NDP plan is a declaration of war against the average Canadian whom would have to pay indirectly more for goods & services that use carbon with a cap & trade increasing their final costs to the consumer. Extorting industries to purchase carbon offsets outside increases their costs if they do not pass the costs on it will lower profits resulting with lower dividends payable to pension plans hence less for pensioners to share. We live on a carbon based planet with carbon based lifeforms a NDP plan increases prices on everything in proportion to the amount of carbon emitted with their production, transportation to market or use entailed, gas would be + $3.00 a liter if the industry has to purchase carbon credits from government, 40% of everything you use contains a carbon factor. Sector specific encourage industries to re-invest, a 18% reduction of refinery emissions (equal to the amount of carbon in a human body) by stopping leaks gives 18% more product to sell.

  15. If it weren’t so pathetic it would be funny: Thomas Mulcair at his news conference comissioned the media to publish abroad Harper’s ‘lies’ re the NDP carbon tax. And they have with enthusiasm, including Wherry. And here I was under the illusion that the media was not under the control of politicians. My bad.

  16. Pathetic comments.
    The Harper hater and NDP lovers are not only pissing into the well from what
    they are drinking but crapping into it as well. Kill the oil industry make everything
    that consumes energy more expensive, sprinkle monopoly money all over the
    country so that people can survive and all of it based on Al Gore the crooked
    politician that made himself a fortune by a bamboozling gullible masses with a
    science fiction movie, and corrupt scientists that are prostituting themselves
    for grants to publicize that CO2 is a pollutant and causes global warming in 50
    years from now. By then all of them will l be dead and their predictions and
    the craze that it caused in the world wil be considered a joke for many
    generations

    .

    • Well said. Finally, someone with a clear head.

  17. It’s interesting, this piece. I’m a C supporter (though I don’t care for all their policies – copyright reform being a major one) and am befuddled by some of the gaffes they make, but I can only assume that this is related to their wish to reduce pollution (a real problem) rather than worry about what money-grabbing David Suzuki and Al Gore cook up in their secret meetings. I’d rather no carbon tax (their current definition thereof) whatsoever. Put limits on what pollution can be released (ideally, zero) and hammer the piss out of companies that break the law. It bothers me more that Ottawa releases raw poop into the river when it rains than plant food being let loose.

    And GFMD – the Left is known to lie far more than the right, they just get away with it more often (the media being partial to left of center politics). Look at how long King Cretien reigned. Look at how Dalton is doing in Ontario – they’re facing contempt of Parliament charges in Queens Park and there’s NO outcry. Look how much corruption it took for QUEBECERS (arguably, the most left-leaning and politically tolerant bunch in the land) to finally toss the Libs. But, one little gaffe from the C’s and the world might as well be coming to an end.

  18. Stephen Harper and his public relations experts all lie. The question for me is, how many journalists at the National Post and the Globe and Mail and the Calgary Herald will continue to lie for him?

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