Sunday, June 22, 2008

Selling the Carbon Tax to Climate Change Skeptics

Whooee! Well friends an' foes, I just left a bigass comment over to Jennifer Smith's fine boog, Runesmith. She's got a good piece about the Green Shift and it attracted a comment from AGW skeptic and anti-Green Shifter Raphael Alexander. I like ol' Raph. He ain't afraid to wander into the Pergressive Boogeysphere and he don't bow down and worship the infallible King Steve like a lot o' Boogin' Tories do.

Here's how I tried sellin' the carbon tax to Rafe.

Even if you're an AGW skeptic, there are many advantages to the tax shift. GHG's are closely related to other pollutants. When we reduce GHG's we reduce many conventional pollutants at the same time. While you may doubt AGW, I suspect you accept the fact that pollution kills. "Bad air days" in the Great Lakes basin are killing people. The latest estimate of premature deaths due to poor air quality is 9,000+/year. The most conservative estimates put the figure at 3,000. Take your pick. Neither is acceptable.

Regarding the shift away from income tax, this is something most people should welcome. We should try not to penalize success and the less we tax income and profits, the more we encourage entrepreneurship and productivity. Some people call it "takin' care of business and workin' overtime."

With or without a carbon tax, energy costs are rapidly rising. This trend isn't going to reverse itself. Energy costs will rise and our dependence upon fossil fuels will further hurt our economy. Anything we can do to reduce our dependence on expensive fossil fuels will make us more competitive. A carbon tax is specifically aimed at reducing fossil fuel use. Whether that reduction is for the sake of the planet or for the sake of competitiveness and financial efficiency doesn't matter. Reduction of dependence is a worthwhile goal in and of itself.

I don't take much issue with the "tax on everything" characterization. So what? If you can get an offsetting reduced tax on income and the average Canadian is not clobbered with thousands of dollars in new taxes, it really doesn't matter if it is on everything. What matters is how many dollars you pay and how many dollars you get back via reduced income taxes or, in the case of low income Canadians, refundable tax credits.

The per capita average carbon footprint for Canadians is between 15-18 tonnes per year. If we are to pay $10/tonne, the average Canadian's net share would be about $200-$250 after some administrative and overhead costs are added.

Almost everyone can reduce their carbon footprint and, by doing so, reduce both their taxes and their outlay on fossil fuels. In a relatively fair system, those who use more than average fossil fuel will pay more tax. Those who use less than average, will pay less. Everyone will pay, though. Nobody denies that.

AGW aside, the planet's in trouble and our taxation system is designed to stifle income. We allow industry to use the shared atmosphere as a dump without any charge to them at all. Oil industry insiders refer to the practice of burning off waste gas at refineries as "sky dumping." Saves money. So what if it pollutes and kills.

Economist after economist is lining up behind a carbon tax. If you believed King Steve on income trusts, then you can believe he won't do exactly as Dion and most economists are suggesting... years from now. It's already too little, too late.



Mentarch said...

You said it, JimBobby! ;-)

Rosie said...

I posted this on my Blog, because it is exactly what I've been trying to say but i get so riled up that I end up ranting and sounding a little psycho.

Thanks :)

And, just because I said I might vote liberal doesn't mean I've switched sides.....I am pretty sure I am sitting in a Liberal stronghold...I am just so excited that this could actually come to fruition that I'd be willing to shake hands with teh devil ;)

Saskboy said...

A great many people, progressives among them, don't seem to realize that the POINT of the tax is to discourage consumption where it has been a luxury item we've been squandering.

People can't very well reduce their income tax by earning less and feel good about it. However, you CAN consume less, and as a result pay less tax. It just makes perfect sense.

catherine said...

Excellent post, JB. This is useful not just for skeptics, but for those of us who would like to explain things more clearly to others who are worried about what a carbon tax would mean for them.

gimbol said...

Yeah great idea..not.

Liberal candidate came door knocking one day and floated this lead ballon to me. When I responded that I don't want to pay another tax, her reply "but its going to be revenue neutral" I responded that "that means my taxes, which I want reduced, are not going to go down under your plan."
But rather than debate the point with specifics she went off in a huff. Looks like the weak spot has been found.
A tax is a tax, and sugar coating it won't sell it.
It also won't sell coupled with the idea of being under onerous regulations, and a depression are standard of living.
Whats next, ration cards?

Jennifer Smith said...

It's been a long day and I was busy smackin' my buddy Raph around, so I neglected to thank you for your comments. You managed to make a number of points I intended to make rather more eloquently than I could have managed after a twelve-hour workday.

For your amusement, I've posted video of my brief encounter with my always camera-ready MP Garth Turner.

catherine said...

"The per capita average carbon footprint for Canadians is between 15-18 tonnes per year."

I've read that the average per capita carbon footprint for Torontonians is about 8 or 9 tonnes per year. Do you know whether this is correct?

The reason I ask, is because Layton is saying that a carbon tax will hurt cities. Any thoughts on that?

JimBobby said...

Catherine, I've been looking for that sort of regional data but without much success. One decent international chart I've found is this one.

It would make sense that TO folks have a lower average footprint -- if you don't include the 905 commuters who live in 3500 sq ft monster homes. City dwellers have access to public transit, most live in multiple unit housing, most live in samller residences than their suburban and rural counterparts. Many Torontonians don't own cars and things like exist to add convenience without car ownership.

I'm working on a future post rounding up some stats and carbon footprint calculators.


John M Reynolds said...

Why not attack pollution directly instead of going thorough CO2?

Since more people die from cold spells than from warm spells, if you are indeed concerned about peoples' lives, then we should try to warm up this planet. That is why many of the most vulnerable, the aged, move to warmer climates like Florida or Vancouver.

The best way to not penalize those who work hard by taxing their income is to reduce their taxes. Reduce the size of our bloated government. That would save us all tonnes o' cash. All taxes will reduce our competitiveness. Reduce taxes, so we can afford the better alternatives when they become available. The added benefit is that inflation will not be a problem unlike under this tax shift.

The middle and higher income Canadians are not going to be revenue neutral under the Liberal plan.

The per capita average carbon footprint for Canadians is between 15-18 tonnes per year? So that would be between 75 and 90 per year for a family of 5. I pay the bulk of the taxes in my house, so my taxes will go up by 750 to 900 in the first year. By year 4, that will be between 3000 and 3600 at $40 per tonne. I already walk to work and my family has been living at a minimal energy usage as much as possible for many years now. We paid extra for our front loading washing machine, so we would not consume as much water. We had already met the "one tonne challenge" before that program was launched years ago. Any amount that my taxes go up will be more than the 1% tax reduction on my middle class income even in the first year. My CTC amounts may change, but it seems the bulk of my portion of the green tax will go to Liberal social programs.

Rereading your paragraph:

"The per capita average carbon footprint for Canadians is between 15-18 tonnes per year. If we are to pay $10/tonne, the average Canadian's net share would be about $200-$250 after some administrative and overhead costs are added."

That does not add up. If someone has a 15 tonne footprint then their charge is 15 x $10 per tonne = $150. Likewise, if their footprint is 18m, then it becomes 18x10 = 180. How do you bring the net share from $150-$180 to $200-$250? Are you suggesting that the adminstrative fees are $50-$70? If so, then those fees come out of the tax component. That means that in the first year we will be charged $150-$180 of which $50-$70 are administrative fees. That works out to 33% to 38% of the tax will not be included in the revenue neutral portion.

Increasing taxes making it more difficult for people to choose better alternatives does not make sense.

JimBobby said...

How do you bring the net share from $150-$180 to $200-$250?

Much of the effect of a carbon tax won't be seen directly. Wholesalers, manufacturers and transporters will be taxed and they will pass along their expenses. As a guy who has been self-employed in my own business for over 35 years, I can estimate that the various suppliers will increase prices to reflect not only the tax they pay, but also the administrative costs. these are business expenses, not government admin fees.

Your suggestion that we should try to warm up the planet is tongue in cheek, I hope. We are on the verge of a climate catastrophe. Warming the planet will result in more extreme weather events and environmental disasters, killing more people.

If the carbon tax is administered as fairly as it's been touted, those who consume less than average per capita fossil fuels will be net gainers. Those who output more than average will be net losers. You sound like a net winner with all the things you've done to save energy. Congrats.


John M Reynolds said...

The biosphere has doing well since 1997. This is good for feeding everyone.

The global warming theory is that the cold areas of the atmosphere would warm the most. This is due to greater influence of CO2 in those arid areas. That means the poles and the stratosphere would warm more than the tropical surface temperature. This is described in the IPCC assessment reports.

What causes extreme weather events is temperature difference. If the cold areas warm, then extreme weather events would be fewer and/or less severe.

Back to the $150-$180 to $200-$250 topic. So you think the inflation will be between $50 and $70 each year per person. I don't have better numbers, so let's use those for now. That means that a family of 5 will have between $150-$180 per person going to liberal social programs and adminstrative fees. On top of that is inflation of another $50-$70 per year. Using the $200-$250 range instead, that family of 5 will see their expenses shoot up by $1000-$1250 the first year. That brings the total in year 4 to $4000-$5000. And that is for a family of 5 with an footprint equal to that of the average Canadian footprint. Even if a few hundred dollars are added per kid for the CTC, my family will still see a huge net loss of funds.

All that to combat CO2 concentration increases that have been beneficial. I say no thanks to this Carbon Tax.

JimBobby said...

Thanks for your thoughtful reading and respectful consideration of my post and comments, John. I still think you'd better better off with the tax shift. All you've added up are projected costs. You haven't talked about the tax reductions that are integral to a tax shift.

In all honesty, I do not know how much you'll actually pay or how much your tax refund will be. These figures will vary by individual circumstances and actions. I do know that people and companies will see benefits from reducing their dependence on fossil fuels. You've already confirmed you agree that by your own remedial actions.

By design, a carbon tax and tax shift are meant to reward people like you and punish those who wantonly waste resources and pollute beyond the per capita average. The devil will be in the details, as with any tax plan.

Again, John, thanks for keeping an open mind and responding in a civil manner. I guess we can agree to disagree.