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Beyond the Carbon Tax

Two enviros argue it's 'fluff' and 'blackmail' and no real fix for climate change.

By Michael M'Gonigle and Blake Anderson 30 Apr 2009 |

Michael M'Gonigle is a professor at the University of Victoria, and a director of the POLIS Project on Ecological Governance. Blake Anderson is a graduate student at UVic and researcher at POLIS.

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Tax energy, not just carbon?

Despite the economic doom and gloom, catastrophes in fish farms and wild rivers, controversial multi-billion dollar highway schemes, in this election no one seems to care. Instead, the first 10 days of the election have been "virtually a referendum on the carbon tax" reported UVic political scientist Norman Ruff.

Yikes! In a world running amok, this is it? With seemingly pivotal decisions facing BCers on every front, the carbon tax debate shows the depressingly low level of the climate change conversation -- and of our politics. For their shared fixation is on symptoms not causes. If you are willing to look, the problem is clear: over-production and over-consumption, the real issue being not carbon, but energy and the economy that mainlines it.

We are told that we need a response akin to a wartime emergency. Well, if so, a carbon tax is designed to fight a phantom war that diverts us from thinking about, let alone fighting the real one. The enemy? Business -- and life -- as usual.

The political challenge is not Liberal vs. NDP vs. Green but what it will take for an increasingly conservative environmental movement to shake off its political complacency, and lead the charge.

Where is everyone?

Requiem for the carbon tax

In their Climate Action Plan, the provincial Liberals wax poetic that their plan will allow businesses to "capture new opportunities in fields such as clean energy and energy-efficient technology." Their de facto academic spokesperson, SFU's Mark Jaccard, is even more effusive that a carbon tax is fine because Canada's "economy would continue to grow rapidly."

But, of course it will. At a time when the price at the pump can fluctuate 10 cents per litre in a week -- with no reason except our deference to the global law of economics -- the carbon tax is only 2.5 cents per litre. And it will climb by a few cents over the next few years to its peak of 7.25 cents per litre. Whew! We can handle that.

And what happens to this money? Not spent on public transit (as the GVRD mayors recently requested of Premier Gordon Campbell) or energy efficiency for low-income housing or rental units (that might satisfy NDP leader Carole James). No, this is a "revenue neutral" tax, with $300 million in carbon taxes translating into almost $500 million in tax cuts this past year. Whew! We can still do our trip to Italy.

With some good caveats built in (like refunds for low-income earners and Northerners), one might give credit for at least doing a wrong-headed policy somewhat right. The economists are happy. But what will it achieve? If it works (and this is a big IF), its proponents hope to see a 33 per cent reduction in CO2 by 2020 and an 80 per cent reduction by 2050. 33 per cent will be the easier part -- you know, the "low hanging fruit" stuff -- and that would (could) be a significant reduction.

But the big part -- the 80 per cent -- now that's a lot. But 2050? That's 41 years from now. Forty-one years ago, Richard Nixon had just become president, and Barack Obama was six years old. The Vietnam War was raging and the Beatles had just released Sergeant Pepper's. The Americans hadn't even landed on the moon. 2050? Like, this is two generations away! Some wartime emergency.

Carbon colonialism

Unfortunately, the experiences with similar technical initiatives indicate that these targets will be neither achievable nor enforceable. Despite lofty claims from politicians and economists, pricing is a fickle game that in practice has yet to provide solutions.

The Transnational Institute (TNI) in Paris reports that Europe's experience with its related "cap and trade" is a documented disaster -- emissions have increased, large polluters have made massive windfall profits, energy costs rose for consumers, while innovation waited on the sidelines to see where all this policy dust settled. This past week, the world's second largest reinsurer, Swiss Re, closed its carbon trading desk due to lack of business.

Meanwhile, Oxford University's Environmental Change Institute decries the carbon offset market that allows one, for example, to pay to plant trees to "offset" the carbon emitted on one's travels. Carbon offsetting projects have been redundant, ineffective, unproven, unmonitored, although they have spawned a highly-motivated and lucrative new "green" industry selling cheap absolutions to the frequent flyer.

'Carbon colonialism'

Calling it "carbon colonialism," one TNI critic of the impact of offsets on southern development projects noted that "instead of building wells, rich countries can now plant trees." Ironically, the most prolific flyers that we know are climate scientists, followed by climate lobbyists (environmentalists) and climate academics. They are, they say, "on the road to Copenhagen" (the site of the next Kyoto conference). Like millions in our generation of jetsters, they are carbonizing their way to distant meetings -- but important ones, of course.

As a result, the TNI urged California to reject both "the fundamentally flawed trading and offsets approach." It won't be long before we hear the same thing about carbon taxes. Even staunch advocate Jaccard admits that for them to work, they will have to impose carbon pricing that is perhaps 400 per cent greater than now permitted. And the big hike will have to be accompanied by "strong complementary regulations and public investments."

Carboniferous politics

But such policies are not on the agenda. Instead, at just 2 plus cents per litre, the carbon tax is all show. Without actual bite, the carbon tax doesn't demand the investment of real political capital. And without that, there isn't serious debate. It's carbon fluff.

Although the NDP rejected the carbon tax, their shallow political calculations are less than inspiring, and their analysis has been less than informative. Meanwhile, respected organizations like the David Suzuki Foundation and the Pembina Institute remain staunch carbon tax advocates, despite all the evidence to the contrary, making support for this tax the litmus for environmental correctness.

How often have we been told (erroneously) that any rejection of the Liberals would be devastating for political innovation anywhere on climate change? This is carbon blackmail.

From our review, only the Dogwood Initiative's Cliff Stainsby has set a higher bar. He advocates an awkwardly named "cap and dividend" strategy that would set a cap on CO2 emissions at a point where they enter the economy, and emission permits auctioned off, the money raised to go directly into transitional adjustment assistance that also reflect the social impacts. Stainsby also calls for a ban on such emissions as a toxic substance, old-fashioned direct regulation in Europe having had dramatically greater success with other pollutants (like acid rain) than America experience with cap-and-trade programs.

But even this analysis skirts the main point -- that it's about energy, and our insatiable demand for more and more, and more still. Where will this demand take us? When will it end? What are the alternatives?

Post-carbon politics

One place it will go is a diversion on every usable stream, a windmill for every hilltop, perhaps a nuke for every metropolis. BCers don't like the thought of run-of-river hydro power fuelling electric cars to jam the new $3 billion Gateway freeways into Vancouver. The proposed 10 lane Port Mann bridge is even justified by the government because it will "reduce vehicle emissions by reducing congestion-related idling." Yikes again!

And BCers are not alone. Just ask how the farmers and residents of the Niagara Escarpment feel as they plod off to yet another public meeting to oppose the imposition on them of another politically correct "solution." A UNESCO biosphere reserve, and once an iconic protected area just north of Toronto, the area's once draconian planning powers have been stripped away by a provincial government intent on clearing the area for massive windmill developments to fuel the city. From that huge bluff, and certainly from the top of any windmill fueling the city, you would be able to see Highway 401, its 22 lanes still crowded with traffic late into the evening.

What we should really do

So why not just skip right past all this tax shifting that merely fiddles with new supply lines while the planet burns? Let's cut straight to the quick-- a real economic transition strategy that reduces demand. Now there's an election topic, if only we had a functioning democracy that was up to the reality of the 21st century.

Let's scrap Gateway (now), and put that money into a 200 kilometre light-rail network that the UBC's Design Centre for Sustainability argues could blanket the Lower Mainland for the same price -- and take thousands of cars off the road, millions of litres of gas out of the pipelines, and tonnes of CO2 out of the air.

Let's repeal the $300 million plus in annual provincial subsidies and $1.4 billion in federal subsidies for new energy exploration and development. Dogwood calls these subsidies that co-exist with carbon taxes as B.C.'s number one "climate contradiction." Yes, we need to use energy, but the question is whether we should be subsidizing new use, rather than fostering initiatives that will generate new non use. And let exploration follow the dictates of the much-loved market, but a changed market that now works in the context of an energy-frugal, innovation economy.

And let's have a meaningful "energy transition levy" that has no pretense to revenue neutrality but is explicitly designed to kick-start a collective endeavor to grow an eco-economy. Imagine the pride of making B.C. a showcase of a sustainable, just and practical economic model for the 21st century.

The tools are there -- smart meters, differential pricing (say for urban gas commuters and rural residents, and according to the environmental impact of the energy source), identified targets for direct investment that can dramatically increase efficiency and low-income supports, public transit opportunities, and much more.

Let's cut energy demand by a quarter, fast

So, let's put 2050 aside, even 2020, and focus on 2015 -- and a real reduction in energy demand by that date. How about 25per cent?

The tools are there, but where are the people? Beyond provoking an outcry over jobs and deficits, such a dramatic economic transition strategy that takes seriously the climate challenge should also provoke a debate about our real deficit -- the democratic deficit.

In this election and beyond, we must move past the half-thought-out carbon policies and the artificial divisions they sew. We need a real referendum on our collective future, and a process that gets us there with not just the usual environmental suspects but a whole host of characters -- social housing advocates and green entrepreneurs, investment gurus and tech wizards, visionary politicians and engaged citizens.

Rather that fine-tuning a broken carbon instrument, it is time to reinvent our democracy beyond carbon.

But then maybe climate change isn't all that urgent and we can just wait until Barack turns 88, and most of us are dead.


Read more: Politics, Environment

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