19

Peter Kent tries to explain the farce


 

The Environment Minister talks to Canadian Press.

In an interview with The Canadian Press, Kent said the NDP’s cap-and-trade proposal to reduce greenhouse gas emissions amounts to a carbon tax by definition, simply because it would see the government generating revenue. The opposition party’s election platform from 2011 shows the scheme would see Ottawa collecting $21-billion over four years. “Their $21 billion is an up-front tax. It’s a revenue generator. Ours is not,” Kent said, explaining how he justifies equating a cap-and-trade system with a carbon tax and dismissing both approaches as inferior.

We’ve already dealt with this “revenue” question—by the government’s own logic it’s a red herring. Even if, theoretically, the cap-and-trade that the Conservatives were proposing previously wouldn’t have resulted in government revenue—and it’s not evident to me that that’s what they were proposing—it would have established a price on carbon. And the Conservatives insist—see here, here, here and here—that a price on carbon and a carbon tax are the same thing. Mr. Kent said so himself just three months ago. “Carbon pricing in any form is a carbon tax,” he said.

So three questions remain to be answered. When did the Conservatives decide that cap-and-trade was equivalent to a carbon tax? How do they reconcile their 2008 election campaign now that they believe what they opposed (a carbon tax) and what they proposed (cap-and-trade) are equivalent? And, given how vehemently they now oppose cap-and-trade, why can’t they commit to never implementing a cap-and-trade system in the event that the United States decides to do so?

Kent says the cap-and-trade idea proposed by the NDP is based on a good theory that indeed was once the preferred approach of Conservatives. But he says the party changed its mind because the theory breaks down in practice, and the Conservatives wanted a system that would guarantee emissions reductions. “It’s a great concept and it’s a minor cost of doing business for large companies, but it’s not proven and it’s got all sorts of negatives,” he said.

Here, maybe, could be the basis for a mature discussion about the practicalities of cap-and-trade and the options available. On that count, it is worth noting that the Conservatives have invested heavily in the unproven technology of carbon capture and storage. And the Canadian president of Royal Dutch Shell says carbon capture and storage won’t be adopted widely unless a price on carbon is established.

“Compliance with regulations is a much more tangible concept than a theoretical trading system,” he added.

Many economists also believe regulation is the most expensive way to reduce emissions (at least so long as they’re intended to meaningfully reduce carbon emissions).

The coal rules are not free, however. Federal calculations estimate that the new rules in just that one sector will cost about $16 billion in today’s terms. About half of that is due to increased consumption of natural gas that will be the side-effect of cracking down on coal. But Kent says there is a big difference between those costs and the NDP’s costing of its carbon reduction plan. With the Conservative regulations, the costs are spread out over decades, and none of money goes directly to the government, he explained.

Once again, the revenue argument is a red herring. Otherwise, Mr. Kent seems to concede that the Harper government’s approach is guilty of the primary sin the Conservatives charge against the NDP’s approach: it will ultimately raise various costs for consumers. It just might take longer for the Conservatives to fully implement their approach?


 

Comments are closed.