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:
- 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?
- What new regulatory and operational body are you going to construct to oversee the mandatory emissions market?
- 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.)
- 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?
- 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?
4 comments:
Give me a break. Like rewriting the tax code and reworking the tax bureaucracy to implement a carbon tax can be done quickly. Please.
Particularly given how successfully the Liberals were when they implemented the gun registry? That was such a huge success as a bureaucratic endeavour.
First, there are other countries that have implemented successful cap and trade systems that we can emulate. Second, we have a similar system that has successfully regulated and reduced toxic pollution that causes acid rain (and that is a cross border initiative with the US). Finally, there are plans afoot that 4 provinces and several US states are currently working on for a carbon market.
Lastly, I would like to point out that Al Gore has stressed that he believes that the first initiative that the US government should focus on is making the US Electric Energy Sector carbon free in 10 years. Why? Because although he acknowledges that it will be an ambitious plan he points out that both industry and individuals use electricity and this would have an amazing impact on reducing ghg emissions. Like Layton is proposing an east west electric grid, Gore is proposing the same for the US.
First, there are other countries that have implemented successful cap and trade systems that we can emulate.
I haven't seen any system that haven't taken a few years to put into action. The Regional Greenhouse Gas Initiative for the Northeast States was proposed in 2003 and is due to launch in 2009. The Western Climate Initiative started in 2007 to study the program, but it's still in the development phase.
Even Australia, which started their cap and trade system law in 2007, will not bring their system out until 2010.
The question is why not have a carbon tax while you're working on a cap and trade system.
(You really need to study the situation to bring about change. One of the current models, the European Emissions Trading model actually has a net increase of 1.9% of emissions blamed on various reasons but mainly on poor models. It's also interesting to see the costs vary from E30 to E0.03 per ton of carbon. When the price hists E0.03, you have to admit that there's no real push to curb emissions.)
Thank you sharonapple88. I was going to dig up those numbers again, so thanks for writing them down.
Thank you patricia for your comment too. I would respond to you that the existing tax system can be used to collect the carbon tax, and that it can be done starting with the first Liberal budget. As a very clear case, consider the federal excise tax on diesel. All you have to do is change a number to implement the carbon tax.
No problem. Both systems have their merits, so it's sad to see people feel as though it's one or the other. Politically, the idea of a carbon tax is a hard sell, which is sadly one reason politicians avoid them even though they are obviously useful considering Denmark's use of them.
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