Why a mandatory cap and trade system would take time

Jack Layton claimed recently that his cap and trade proposal for limiting greenhouse gas emissions would not take a long time to set up. This claim is important to rebut because the reason Stephane Dion decided to change his mind and to go with both a carbon tax and cap and trade, is because a mandatory cap and trade system would take a long time (a few years) and lots of resources to set up.

First, let's show Mr. Layton's quote from the Globe and Mail:
“The forcing of big polluters to pay, taking that money and investing it in solutions which is the cap-and-trade system, has already happened. It's already going on in Canada on a voluntary basis.”

The crucial point is the difference between a voluntary cap-and-trade system and a mandatory one. In a mandatory system, here are some of the headaches you are going to have to deal with, and find answers that everybody across the country can agree to:

1. Who is in and who is out? Where are you going to set the boundary between large emitters and small emitters? Everybody is going to try to be exempted, either partially or wholly (lots of people/institutions will feel it's unfair to them). What's your plan to 'consult with the public'? Are you going to include non CO2 greenhouse gases? What are the standards you are going to apply to offset projects?
2. What new regulatory and operational body are you going to construct to oversee the mandatory emissions market?
   
3. How is the auction going to be conducted? How many emissions credits are you going to auction? If you try to limit the supply of credits and push down the total cap on emissions, the price for credits might go up. Is there no limit on the price for emissions credits? If there is a limit or safety valve, what is it? (notice that in this case the cap-and-trade system becomes a hybrid cap-and-trade/tax system without the hard limit on absolute emissions that Mr. Layton wants.)
   
4. What do you do about early action? How, exactly, do you reward, or at least not penalize those who have already taken action to reduce emissions? How do you set baseline levels for offset projects in a way that people will agree is fair?
   
5. Are you going to harmonize with the various US markets and/or the European emissions market? Are you going to allow CDM or JI projects to sell offsets? How long will negotiations with them take?

Mr. Layton is picking a fight between a cap-and-trade proposal and a carbon tax proposal that is not going to help Canada deal with climate change. Splitting the non-Conservative Party vote is bad enough, let's not have an unproductive fight about climate change policy that will distract Canadian voters from the critical point that a Conservative Party government will not do anything substantial to fight climate change.

Elizabeth May's book coming out on Oct. 2

I received a notice from amazon.ca that Canadian Green Party leader Elizabeth May's book, "Global Warming for Dummies", part of the extensive "... for Dummies" series, is being released in the middle of this federal election campaign on October 2. Coincidentally, it's the same date as the English language party leaders' television debate, one of two debates that were recently the source of so much public outcry when Stephen Harper and Jack Layton tried, unsuccessfully, to exclude her.

Dear Mr. Layton: Don't wait for the debate over how to implement a carbon tax shift before planning to help the poor with spiking energy prices

Letter to the Editor of the Toronto Star

Re: Carbon Tax Would Hurt Poor, NDP Says May 23, 2008

We need to protect the poor from spikes in energy prices right now. I think that the NDP should concentrate on that issue instead of fear-mongering about the Liberal Party's carbon tax shift. The reason is that when we come up with a good plan to deal with that issue, a plan which does not contain a subsidy for fossil fuel use, we will also have produced a plan to help the poor adjust to the carbon tax. I suspect that the Liberal's carbon tax shift plan will contain just that.