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Why the NDP's climate change policy is dumber than two sacks of hammers

Stephen Gordon
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Joined: Oct 27 2003
 

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Stephen Gordon
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Joined: Oct 27 2003
Sack #1: Quantities The NDP and its minions keep hammering on the fact that its plan has 'hard caps'. Indeed it does, but not on everyone. The NDP plan divides greenhouse gas emitters into two groups:

1) 'Naughty' emitters: This group has to live with a world of caps and permits.

2) 'Nice' emitters: This group can continue on as before.

Insisting on the fact that the NDP has 'hard caps' makes about as much sense as bragging about the strength of a dam that reaches halfway across the river.

Worse, drawing a line between 'naughty' and 'nice' emitters completely screws up the incentives facing producers. For a firm that finds itself on the 'naughty' list, the way to increased profitability is not to invest in greener technologies. Its most profitable move is to invest in lobbying to get on the 'nice' list.

What will be the NDP's reaction if the workers at this facility ask to be put on the 'nice' list?

Sack #2: Prices The NDP is trying to suck and blow on this point, and all it's doing is making unpleasant noises. The standard NDP critique of the Liberal proposal takes two forms:

A) $10/kg (rising to $40/kg in four years) per tonne of CO2 is not enough to make a significant difference in ghg emissions, and

B) The Liberal plan will impose an unacceptably large cost on consumers.

The NDP can fairly make point A) - except that if an increase of $40/tonne is not enough to attain the announced policy goal, then the NDP's floor of $35/tonne is clearly too low; the appropriate price should be well north of $40/tonne. But if emitters are going to be paying significantly more under the NDP policy than they would under the Liberal plan, it makes no sense whatsoever to appeal to point B): there is no reason to think that emitters will try to pass along the costs of a carbon tax to consumers, but will not try to pass along the costs of an even more expensive carbon permit.

A few weeks ago, Layton was quoted in this way:

quote:He said big corporations should bear the lion's share of Canada's climate-change tab and a federal ombudsman should ensure those costs aren't passed on to consumers.

The only appropriate response to this spin is slack-jawed horror, and apparently he has realised his mistake:

quote:For low-income Canadians, we need comprehensive tax changes and credits to ensure no Canadian is left behind as we undertake this great national effort.

That's all the the good, of course, although if the NDP were actually interested in proposing a coherent approach to this issue, it would have removed this page from its web site.

The NDP can criticise Dion for not increasing prices enough to make a difference in greenhouse gas emissions, or it can criticise Dion for increasing prices too much. But it can't do both and pretend to be a credible voice in the debate about climate change policy.

[ 25 June 2008: Message edited by: Stephen Gordon ]


500_Apples
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Joined: Jun 3 2006
The problem is nobody is willing to say that we the people should bear the brunt of climate change reductions. Conservatives allude to new technologies and the NDP says that the corporations will pay (rofl).

Someone need to have the courage to propose a carbon tax on consumers, to raise the cost of gas, to admit that we are all part of the problem. It's juvenile to say we're doing ok but the evil corporations are causing pollution.

If this were 1985, I wonder if some would argue tobacco taxes are unfair to the poor.


Dogbert
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Joined: Aug 10 2001
What exactly do you mean by "naughty" and "nice" emitters? Are you just meaning that individuals won't be capped, or will specific industries be exempted?

Stephen Gordon
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'Naughty' emitters are capped. 'Nice' emitters aren't.

500_Apples
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quote:Originally posted by Stephen Gordon:
'Naughty' emitters are capped. 'Nice' emitters aren't.

Stephen,

One aspect which concerns me about all these regulations are the prospect for outsourcing pollution. For example, it is very well-known that in Europe they are raiding rainforests in Indonesia to make palm oil ethanol. Since most of the environmental damage is not done in Europe, Europe can brag about meeting Kyoto targets.

Are there any rational policy mechanisms that would prevent the outsourcing of pollution?


Stephen Gordon
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Joined: Oct 27 2003
That's a risk - one common to both the NDP and the Liberal plans. I really don't know how big a problem it is, though; I haven't seen any numbers.

Dogbert
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quote:Originally posted by Stephen Gordon:
'Naughty' emitters are capped. 'Nice' emitters aren't.

Do you have a source or anything that might have a few more details than Santa will give me? [img]tongue.gif" border="0[/img]


Stephen Gordon
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Santa says:

quote:The NDP plan sets absolute caps on major industrial emitters, which account for 50% of Canada’s greenhouse gas emissions.

Everyone else is on the 'nice' list.


Frustrated Mess
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Joined: Feb 23 2005
More importantly. as I keep harping on about, it ain't worth a hill of beans.

First, I, believe it or not, agree with the Prof.:

quote: World leaders ... abandoning efforts to regulate emissions at a national level ... instead ... focus on the companies that produce fossil fuels in the first place - from oil and gas wells and coal mines - with the UN setting a global "upstream" production cap and auctioning tradable permits to carbon producers. Instead of all the complexity of regulating squabbling nations and billions of people, the price mechanism does the work: companies simply pass on their increased costs to consumers, and demand for carbon-intensive products begins to fall.

So, yes, cap and trade means higher prices for consumers. So what is the solution? The same as Dion's or as stated by Layton and quoted by the Prof - tax shifting:

quote: The auctioning of permits raises trillions of dollars to be spent smoothing the transition to a low-carbon economy and offsetting the impact of price rises on the poor.

Yes, but those of us on this side of the fence might want to know when the political, corporate, and social elites have ever agreed to a transfer of wealth from the rich to the poor? It usually happens the other way around. Sure, there have been exceptions - short lived.

But none of it really matters at all because it finally comes down to this:

quote: Ultimately ... the question now is whether humanity can summon up the courage and foresight to save itself, or whether business as usual - on climate policy as much as economics - will condemn us all to climatic oblivion.

I think we know what choice we have made. Bring on oblivion!

The above was all from Mark Lynas writing for The Guardian.

[ 25 June 2008: Message edited by: Frustrated Mess ]


John K
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Joined: Nov 30 2002
Stephen, if you can think of a practical way to place hard caps on small emitters such as residential households, I'm all ears. Otherwise, you're pretty much forced - as the NDP proposes - to restrict the caps to large emitters where they can be monitored and enforced.

Another way the NDP plan is superior to the Liberal one is that the incentives and rebates to low income Canadians are specifically tied to assisting them in making conservation and energy efficiency improvements, rather than willy nilly tax cuts as the Liberals are proposing.


Stephen Gordon
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Joined: Oct 27 2003
I can't think of a convenient way to put caps on residences, which is why I'm leaning to a carbon tax at this point.

And I really, really don't like the idea of deciding *how* residences should use that money; every household's situation is unique. Giving them cash is the most efficient way of dealing with the problem.


KenS
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Joined: Aug 6 2001
quote: I can't think of a convenient way to put caps on residences, which is why I'm leaning to a carbon tax at this point.

As noted, the cap and trade focuses on the large emitters that do the 50% because the complexity of cap and trade makes it not feasible to start out going for a higher proportion.

You prefer carbon tax because it is simpler, more even, whatever [why exactly does not matter, it is better on a number of those scores].

We know that the cap and trade will bring in hard caps on the 50% of emissions. What can we reasonably expect will be the result of a carbon tax plan in the same time frame [ie, when it is in the $40-60/tonne range, not what might happen when it gets to say $90]?

Is it enough to say it will have a noticeable effect? Which can also be said for the intensity based regulations the government is bringing in? In both cases there can be plenty of noticeable/significant effect while overall emissions still grow.

And there is a consideration you left out. We are comparing plans on the table. It's not NDP cap and trade to the general principle of a carbon tax, its NDP cap and trade versus Dion's carbon tax plan.

The Liberal plan comes with the revenue neutrality promise. Since that is the focus of their politics, they are locking in. We require major spending for green initiatives. The Liberals have locked themselves out of all the carbon pricing revenues. Worse, the tax cuts remove fiscal manouevering room for spending initiatives. Having made and staked everything on the revenue neutrality promise they'd pay a very steep price even to do the otherwise rather obvious rescinding of the GST cuts. Steep enough a price they would not do it.


jrootham
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Joined: Jun 14 2001
My understanding of the NDP plan is that it is a phased in approach. Caps on major polluters now, caps on all carbon supplies later.

Given that the oil companies are getting large rents now any tax or auction cap scheme will transfer those rents to the government.


Stephen Gordon
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That would make more sense. But why would the NDP make public the stupid version of its policy, and keep the sensible version a secret known only to insiders?

remind
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Joined: Jun 25 2004
StephenGordon, think the page is quite fine, why should it be removed? and it seems like you are blowing smoke, about nothing. All I see is empty propaganda being pushed as if it were "something", in order to slag the NDP.

KenS
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I'm willing to have an apples to apples comparison only of what is out there now on the table here and now.

IE, hard caps on the 'merely 50%' and what can be expected in results from that, versus what can be expected in results from the Liberal carbon tax plan in the same time frame.

Which also includes that the Liberals have locked themselves into a fiscal corner that will not allow for spending initiatives on things like mass transit, insulation upgrading subsidies that always pay substantial didvidends.

With their tax cut pledges the Liberals won't even have the room for demonstrably cost effective revolving loan programs for everyting from energy efficient appliances to window replacements and household/business sized wind and solar power production... where pay back is geared to energy savings that result from the purchases. Cost effective in the mid and long term, but requiring substantial capital outlays by government.


KenS
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Joined: Aug 6 2001
quote:Prices

The standard NDP critique of the Liberal proposal takes two forms:

A) $10/kg (rising to $40/kg in four years) per tonne of CO2 is not enough to make a significant difference in ghg emissions,

The NDP critique is not that the carbon pricing is not high enough. It is that the results of the carbon tax will not be enough.


quote: ...and B) The Liberal plan will impose an unacceptably large cost on consumers.

The NDP can fairly make point A) - except that if an increase of $40/tonne is not enough to attain the announced policy goal, then the NDP's floor of $35/tonne is clearly too low; the appropriate price should be well north of $40/tonne. But if emitters are going to be paying significantly more under the NDP policy than they would under the Liberal plan, it makes no sense whatsoever to appeal to point B): there is no reason to think that emitters will try to pass along the costs of a carbon tax to consumers, but will not try to pass along the costs of an even more expensive carbon permit.

Same point. The NDP isn't saying that the carbon price is not high enough. You are the one who assumes it is all about carbon pricing solely.

The permit price is just setting the stage. The results come when the hard caps come in, the number of permits is first capped, and then begins to decline.


Scott Piatkowski
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Joined: Sep 3 2001
So, to summarize you argument:

1. The Liberal approach has no caps.
2. The NDP approach caps major polluters who are responsible for 50% of GHG emissions.
3. But, you praise the program with no caps and criticize the NDP for only going after the major polluters.

Sounds dumber than three sacks of hammers to me.


TemporalHominid
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quote:Originally posted by 500_Apples:
The problem is nobody is willing to say that we the people should bear the brunt of climate change reductions. .

I am, and so is my father; alas we don't have a lot of political or economic influence. David Susuki has been saying it for at least a 2 to 3 decades; he's got a bit more influence than me.

I believe that gas / diesel should be $6 or $7 dollars a litre, like it is in parts of Europe, Turkey etc. People rely more on Public transport in the urban centres to get around, and don;t commute as far to get to work

I'd like to see something like a carbon tax implemented; if it runs on fossil fuels TAX it to the max.


unfortunately the high gas / diesel prices will affect low income and fixed income people as inflation takes off, making food staples really expensive, so my dream of $7 / litre fuel would be very cruel. (big oil will also keep benefiting, which annoys me as well)

[ 26 June 2008: Message edited by: TemporalHominid ]


Boom Boom
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Joined: Dec 29 2004
Did anyone watch The National last night? Some stuff I didn't know before: China is adding 20,000 new cars per day; gas prices in Venezuela is $0.25/liter; gas prices in Saudi Arabia are $0.50/liter (these two have governments that can afford to subsidize the price of gas). A comment that was made was that no matter how many vehicles we take off the road in North America, it doesn't make any difference to worldwide CO2 emissions because Russia, China, India, and the rest of the developing world are all rushing in to put more cars and drivers on the road.

That was admittedly just a small part of Peter Mansbridge's report last night - he had someone on near the end of the show to talk about what it would be like in Canada when gas gets to the point that it's no longer economically feasible to use cars for transportation - first the airlines would collapse, then railways would be brought back, but, in the end, it would be chaos on a grand scale as the Middle Class erupts in anger as they realize their beloved Middle Class entitlements were going down in flames.

Quite a show. I wish I had taped it. [img]biggrin.gif" border="0[/img]


Aristotleded24
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Joined: May 24 2005
quote:Originally posted by TemporalHominid:
unfortunately the high gas / diesel prices will affect low income and fixed income people as inflation takes off, making food staples really expensive, so my dream of $7 / litre fuel would be very cruel. (big oil will also keep benefiting, which annoys me as well)

That's why most of us oppose the Green Tax Shift.


Stephen Gordon
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Joined: Oct 27 2003
quote:Originally posted by Scott Piatkowski:
So, to summarize you argument:

1. The Liberal approach has no caps.
2. The NDP approach caps major polluters who are responsible for 50% of GHG emissions.
3. But, you praise the program with no caps and criticize the NDP for only going after the major polluters.

Sounds dumber than three sacks of hammers to me.

This is the sort of analysis that makes me despair for the NDP.


Bookish Agrarian
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Joined: Nov 26 2004
This is the kind of answer and thread that makes me despair for economists.

There is nothing, absolutely nothing in the Liberal plan besides a hope and a prayer to actually deal with emissions. As well there is absolutely nothing besides a hope and prayer that poor and rural residents won't disproportionally shoulder the burden of the tax regime. You can reduce the tax levels and make tax credits until the cows come home but it will not offset the lack of options for rural residents and it will not help the poor who can't afford the fancy gadgets and do-dads that would reduce their payable carbon tax.

In the end it is this kind of puerile analysis of the Liberal plan that started this thread that makes me give up all hope of economists being able to get beyond the building theory stage to actually building a progressive society.


Stephen Gordon
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Joined: Oct 27 2003
quote:Originally posted by Bookish Agrarian:
This is the kind of answer and thread that makes me despair for economists.

You mean like this guy?

And the OP was about the NDP policy, such as it is. Diverting attention away to the Liberals or to me is not going to help you here.

[ 26 June 2008: Message edited by: Stephen Gordon ]


Bookish Agrarian
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Joined: Nov 26 2004
My Grandfather would have called that more horsepiss to fill up the bucket with.

You continually like to point out the flaws, as you see them, with the NDP plan but deftly ignore all of the flaws in the Liberal 'plan'.

My view is that neither is perfect, but for my money and from my perspective as a 40 something farmer involved in my community the NDP plan gets us further down the road towards the kind of actual on the ground real life positive future I want for my children and a less climate insecure future I hope for any grandchildren I might be blessed with.


jrootham
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quote:Originally posted by Stephen Gordon:
That would make more sense. But why would the NDP make public the stupid version of its policy, and keep the sensible version a secret known only to insiders?

I'm not an much of an insider on this topic, I just read Jack Layton's private members bill. Given the targets there, caps must be applied to everyone.

The only obvious (to me) route to do that is to cap the suppliers. in fact, that is where you do the enforcement even with the big polluters. You start with some customers needing permits (whether the buyer or the seller holds the permit is irrelevant) and then extend that requirement to everyone.

I don't see how any fair reading of the big polluters pay plan can conclude anything but that it is an initial step.


KenS
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Frustrated Mess
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Joined: Feb 23 2005
quote: There is nothing, absolutely nothing in the Liberal plan besides a hope and a prayer to actually deal with emissions.

True, but that is true with all the plans.

quote: Emissions optimists, of course, will smile at all the gloom-and-doom and evoke the coming miracle of carbon trading. What they discount is the real possibility that a sprawling carbon-offset market may emerge, just as predicted, yet produce only minimal improvement in the global carbon balance sheet, as long as there is no mechanism for enforcing real net reductions in fossil fuel use.

In popular discussions of emissions-rights trading systems, it is common to mistake the smokestacks for the trees. For example, the wealthy oil enclave of Abu Dhabi (like Dubai, a partner in the United Arab Emirates) brags that it has planted more than 130 million trees -- each of which does its duty in absorbing carbon dioxide from the atmosphere. However, this artificial forest in the desert also consumes huge quantities of irrigation water produced, or recycled, from expensive desalination plants. The trees may allow Sheik Khalifa bin Zayed to wear a halo at international meetings, but the rude fact is that they are an energy-intensive beauty strip, like most of so-called green capitalism.

And, while we're at it, let's just ask: What if the buying and selling of carbon credits and pollution offsets fails to turn down the thermostat? What exactly will motivate governments and global industries then to join hands in a crusade to reduce emissions through regulation and taxation?

Kyoto-type climate diplomacy assumes that all the major actors, once they have accepted the science in the IPCC reports, will recognize an overriding common interest in gaining control over the runaway greenhouse effect. But global warming is not War of the Worlds, where invading Martians are dedicated to annihilating all of humanity without distinction. Climate change, instead, will initially produce dramatically unequal impacts across regions and social classes. It will reinforce, not diminish, geopolitical inequality and conflict.


Living on the Ice Shelf: Humanity's Meltdown

jrootham
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Joined: Jun 14 2001
Well, FM we have this.

quote:There will be about 10 million fewer vehicles on U.S. roads by 2012 and average kilometres driven will drop 15 per cent, the report said.

So much for prices having no effect on consumption.

And yes, it is lower income people taking the hit in the US. In Canada, less so because they already ride the bus.


Stephen Gordon
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Joined: Oct 27 2003
quote:Originally posted by jrootham:
So much for prices having no effect on consumption.

Could you please make this point to your fellow dippers? I keep making the exact same point (Demand curves slope down!!!), and all I get is blank looks.


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