Navigating the farce, Terrence Young

An exchange from Monday’s budget debate between the NDP’s Kennedy Stewart and Conservative MP Terrence Young.

Kennedy Stewart. Mr. Speaker, I have a question about what is missing in the budget implementation act. On page 32 of the Conservative 2008 platform entitled “The True North Strong and Free”, under the heading “Developing a Cap and Trade System to Cut Pollution and Greenhouse Gas Emissions” it promises that a re-elected Conservative government will implement the cap and trade system between the years 2012 and 2015. I want to ask the member how that is coming along.

Terrence Young. Mr. Speaker, once again, the NDP do not understand the difference between a revenue neutral cap and trade system where businesses trade or we trade even within countries, such as we were planning to do within North America, and a carbon tax, which is a revenue grab from consumers to spend in whatever way the NDP would like. There was a plan in 2006 to have a cap and trade system with our American partner, but it was not willing so that did not happen. It is pretty simple…

Cap-and-trade is, of course, what the NDP has proposed. A “carbon tax” is how the Conservatives now describe the NDP’s cap-and-trade proposal.

As we’ve explained before, there are two ways to devise a cap-and-trade system: one in which the government sells emissions credits and takes in revenue from those sales and one in which the government gives away emissions credits and companies take in revenue from selling those credits amongst each other. It’s not clear that what the Conservatives were proposing between 2004 and 2009 wouldn’t have resulted in government revenue. (I’ve asked for evidence of that, but have yet to receive any. For whatever it’s worth, the American cap-and-trade system was expected to generate government revenue.) When John Baird was proclaiming his government’s eagerness to establish a price on carbon in 2008, that money would have gone to a “technology fund.”

But, again, it doesn’t matter, at least so far as the Conservatives are currently concerned. Mr. Young can assert a difference between a “a revenue neutral cap and trade system” and “a carbon tax,” but his government’s position is that anything that puts a price on carbon—which any cap-and-trade system does—is a tax on carbon. So, at least so far as the Conservatives are concerned, there is no difference to be understood.

Here again is the rough guide to the Conservatives’ carbon tax farce. Here is Stephen Gordon’s look at the revenue question. And here is Stephen’s look at emissions regulations.