Canada's Dopey Carbon Tax

Canada's Liberal Government has imposed a sharply rising tax on atmospheric carbon emissions.

Canada's Conservative Party wants the same thing by another name. 

Both schemes are idiotic. 

Here's why:

(a) With less than half of one percent of the World's population, Canada acting alone, has no significant global impact.

(b) By imposing a carbon tax unilaterally, Canada shoots itself in the foot by putting Canadian industry at a disadvantage in the competition with producers in countries without a carbon tax, e.g., the United States, Canada's largest trade partner, and China, the World's largest industrial economy.

What to do?

Canada should seek agreement with its Free Trade Area (CUSMA) partners for a unified carbon tax with a countervailing duty on imports from countries without a carbon tax.

That way Canada avoids screwing itself, while creating an incentive (avoidance of the countervailing carbon emissions import tax) for all major industrial nations without a carbon tax to impose one.

A Message to Maxime Bernier

The following is the text of a message I just sent Maxime Bernier. M. Bernier founded and now leads the Peoples Party of Canada. Previously, he served in the cabinet of Prime Minister Stephen Harper as Minister of Industry, Minister of Foreign Affairs, and Minister of State for Small Business and Tourism. He was narrowly defeated by Andrew Scheer in the contest for the leadership of the Conservative Party of Canada.

Following today's announcement of Andrew Scheer's resignation as leader of the Conservative Party, I emailed M. Bernier as follows:

Now Scheer's out, time to rejoin the Tories and make another run for the leadership. Best regards, .... PS Don't be hard on Greta, she's only reacting to what her teachers, the science establishment, the media and the Government of every Western Nation have endlessly told her, namely, that carbon dioxide is destroying the earth and that she, as a member of the youngest generation, will suffer the greatest consequences. So she may know nothing about climate science, but she is responding entirely reasonably to what almost all supposedly responsible people are telling her. ALSO the carbon tax is the most economically efficient way to control carbon emissions, but it's insane for Canada to adopt a carbon tax on a purely national basis as that puts us hugely at a disadvantage with trade partners without a carbon tax. We should opt for a carbon tax only in conjunction with our major trade partners, especially the US, and provided that there is a countervailing duty on goods from countries without a carbon tax. FINALLY Why not a real tax reform proposal including: (1) 100% tax exemption on income below the median earned income; (2) an increase in the GST to 20%, with rebates to those with below median incomes (this would make the GST a consumption tax that would encourage savings and investment); (3) a zero rate corporation tax on distributed earnings (which will then be taxed as personal income in the hands of recipients); (4) a flat tax of 20% on all income in excess of the median (i.e., including capital gains assessed annually on all financial assets whether disposed of or not); (5) if there is a need for additional revenue, a capital tax, not to exceed 1%, with a personal exemption of $2 million.

If you agree, why not write M. Bernier (info@maximebernier.com) too.

PostScript:
In response to those urging Maxime Bernier to run for the Conservative Party leadership, the People's Party of Canada issued a statement reading, in part:

Following the resignation of the Andrew Scheer yesterday, our leader Maxime Bernier was asked by some journalists if he intended to run again in a CPC leadership race. His answer was clear: There is zero chance of it happening. That party is morally and intellectually corrupt. Scheer was a weak leader who pushed it to the centre. Their next leader will do the same. This is why our party exists: To offer a principled conservative alternative to Canadians. We’re here to stay!

That is the only reasonable reaction, though it does not mean that M. Bernier would not, under the right circumstances, run for the leadership of the Conservative Party of Canada: it just means that the Conservative Party of Canada would have to send a top level delegates to entreat M. Bernier to run for the leadership. They'd also need to make a public apology for Scheer's people hiring a shyster PR outfit, i.e., Warren Kinsella, to mendaciously smear Bernier as a racist.

This, however, the Conservative Party of Canada will not do for the obvious reason that the Conservative Party of Canada is not a conservative party. It is just another liberal party that operates in accordance with two fundamental forces:

First, the fear of being found politically incorrect.

Second, the bipartisan lust for after office payoffs, which means subservience to the money power and in particular the freedom of the banks to print the money with which they have inflated one of the World's greatest property bubbles, in the process making Canadians among the world's most indebted people. 

Climate Panic: Economics, Ignorance and Mental Illness

Speaking at the One Young World conference in London on Wednesday, BP chief executive Bob Dudley said:

“unless you put a price on something, you can’t control how it’s consumed.” He then called for a “united effort to put a price on carbon. “One of the things we talk most about doesn’t have a price,” he said. “There’s got to be a united effort to put a price on carbon, so when you click a switch on the wall for electricity you’re going to pay a higher price.” “Getting a price on carbon,” he said, will “change the (emissions) situation more than ... four-year outlooks from politicians.” The outgoing BP boss noted that while emissions were stagnating in Europe and North America, other parts of the world were falling behind in addressing the climate crisis. “There are big coal-fired power plants opening in other parts of the world” he said “and that’s the epicenter of the problem.”

But carbon taxes are seriously harmful if applied only on a local basis. They handicap local industry by promoting the transfer of carbon-intensive industries to jurisdictions without a carbon tax.

The solution?

A countervailing import tariff on goods and services from jurisdictions without a carbon tax.

In Canada, where the re-elected Liberal Government plans the introduction of a carbon tax, the countervailing duty is absent, which is one reason that Canadian oil and gas companies are moving south of the Canada:US border — to avoid the million dollars in carbon tax on the diesel fuel consumed in drilling a gas or oil well.

The same incentive to off-shore or out-source to carbon-tax-free jurisdictions will undermine the Canadian steel, lumber, mining and manufacturing industries, which are precisely the industries where Canada has comparative advantage relative to her trading partners.

But apparently such simplistic logic is beyond the grasp of our rulers, let alone the majority of the public for whom Climate Panic seems more closely akin to neurotic illness than an environmental  problem requiring a rational solution (cf, E. Michael Jones: The Religion of Greta Thunberg).

Canadian Election — The Party Leaders: Four Progs and a Rational Conservative (aka Raaacist). Part 2. Conservative party Leader, Andrew Scheer

To some it may seem surprising to rank the leader of the Conservative Party of Canada among the progs, but the reality is that Conservatives are generally more broadminded and open to new ideas than liberals, who, obsessed by their own virtue, are much inclined to authoritarianism and the resort to hate speech — as in branding opponents RAAAAACISTs, Nazis and white supremacists.

Indeed, until 2003, Canada's Conservatives called themselves the Progressive Conservative Party, and going back to the day of John A. MacDonald, the man who created Canada, conservatives at one point called themselves Liberal Conservatives. In that era, it was John A.'s Conservative government that granted the vote to first nations people over the objection of Liberals, who once in power, revoked the legislation.  Indeed it was only due to the strength of Liberal opposition that MacDonald abandoned a plan to grant women the vote. 

So yes, a Scheer-led Conservative Party would almost certainly be more liberal than the Liberal Party of Justin Trudeau, a staunch admirer of Alt-Left, i.e., Communist, dictatorship from that of Fidel Castro's Cuba, to Mao's bloody revolutionary government of China.

But Liberals and Conservatives are barely ideological in their commitments at all. Rather, both are parties of main chancers seeking to "seize the centre ground," to quote that champion of opportunists, Britain's Tony Blair, the destroyer of Iraq. 

So in what way is Scheer, the only possible alternative, preferable to Trudeau as Prime Minister? 

Four reasons immediately come to mind:

First, though no orator, Scheer can, unlike Trudeau, make a speech without repeatedly gasping for breath while his brain catches up with his mouth.

Second, Scheer displays no paraphiliac inclination to dressing up in ways embarrassing to Canadians and irritating to the people so emulated. 

Third, although a carbon tax appears the best solution to rising atmospheric carbon dioxide concentration and the serious harm that that may cause, Scheer is right to oppose this costly measure as a national policy. 

The chief consequence of the Liberal Government's Carbon tax policy will be to put Canadian industry at a disadvantage versus industry of countries without a carbon tax, in particular, the industry of our greatest trading partner by far, the US. Canada should push for a global carbon tax regime that punishes non-compliant countries with countervailing tariffs, not hobble our energy and energy-intensive industries with a unilaterally imposed carbon tax. 

Fourth, Scheer's plan to promote Canadian R and D leading to technology that reduces carbon emissions, is very interesting. It may be possible, for example, to develop economically viable means of converting tar-sands bitumen, in situ, to hydrogen gas, while leaving the carbon in the ground. Hydrogen could then be used for carbon-free thermal power generation. Moreover, hydrogen, with three times the energy density of kerosene, has in liquified form, interesting potential as an aviation fuel that could massively increase aircraft payloads. 

And one could go on. But as we wrote before, Trudeau's leadership was a desperate gamble after the liberals had experienced three leadership duds in a row. He was promoted to the leadership solely on the basis of his name and good looks. Now we know where a name and good looks wedded to flakey, authoritarian bullshit takes one, and it's time now for change and Scheer's is the face of change.

A Tax Reform Plan for the People's Party of Canada

Maxime Bernier has split with the Conservative Party of Canada on the ground that they are morally corrupt, a mundane fact, applicable almost certainly to every political party in contention for power in the Western world. Still, by creating his own party, the People's Party of Canada, Bernier has an opportunity to add some fresh, and indeed important, ideas to the toxic stew of bad or idiotic policies that constitute the bedrock of mainstream politics in Canada. Tax policy is among the many areas of Canadian national policy in need of re-imagining, and the issue of the carbon tax provides an opportunity to undertake major tax reform.

Economists agree that carbon emissions reductions can be achieved most efficiently by means of a carbon tax. The carbon tax is unpopular, however, because it is seen as just one more government impost upon an already overtaxed populace.  Bernier can, therefore, seize the initiative by committing to an overall revenue-neutral carbon tax achieved by raising the basic personal exemption to Federal income tax from $11,365 to $33,300, the latter amount being the median income from employment in Canada. Thus, at a stroke, the PPC would be committed to relieving 50% of the Canadian workforce of all Federal income tax.

In addition, the PPC should commit to paying every low-income worker an amount equal to 15% (the base Federal tax rate) of the difference between their earned annual income and $33,000. As a result of these measures every one of Canada's 18 million workers, whether they are of high or low income, would receive a benefit, either in cash or reduced Federal income tax, amounting to approximately $3,000.

Some will ask why the poor should pay no tax when they are the beneficiaries of many publicly funded services. But the answer to that is obvious: first, the poor do the shitty jobs while the rich reap the benefit of the labor of the poor, so why would one not expect those who are better off to pay most if not all of the taxes; second, even if they pay no Federal income tax, the poor will still pay a large proportion of their income in tax, including gas tax, provincial income and sales taxes, liquor tax, tobacco tax, and all the taxes imposed across the supply chain that must be reflected in the price of everything that a person buys.

As for the cost to the Federal treasury, it would be quite small. The tax reduction on the wages of low income earners would cost the Treasury approximately $27 billion a year, which would be more than covered by the anticipated carbon tax revenue of $35 billion a year. In addition there would be the cost of the tax reduction on the wages of high income earners, another $27 billion a year, leaving a deficit of $19 billion after factoring in the carbon tax revenue. That deficit could be covered, ideally, by cuts in Federal Government expenditure, or alternatively by a 2% increase in the GST, a consumption tax that is already rebated to those of low income.

As for the overall effect of the carbon tax on the Canadian economy, the potential downside is to expose home industry to unfair carbon-tax-free competition from abroad. That however can be avoided by imposing a countervailing duty on all goods from countries without a carbon tax, a trade barrier that would provide Canadian industry significant protection against the intense competition from the sweat-shop economies of the developing world. Also on the plus side, the cut to personal income tax would increase consumer spending and hence stimulate the economy.

Saving the World Through Sloth, Ineptitude, Hornswoggling, and the Carbon Tax

Many people fear that human activity is changing the climate in ways that will prove catastrophic. Others hold that fear to be overblown or entirely mistaken. Some even claim that because of the rising concentration of atmospheric carbon dioxide, the world is becoming a better, more productive place. For example, because of fertilization by carbon dioxide, crop yields are rising, while because of the gentle carbon dioxide-induced warming of the planet, crop lands are extending Northward, while rainfall is increasing in the dry lands to the South of the Sahara. As a result, starvation in the poorest parts of the world is being held at bay.

The disagreement about climate change has long been intense, and positions have become deeply entrenched. The scientific debate has become rancorous. Scientists have been accused of data manipulation and fraud. Scientists have sued one another for libel. And a leading scientist recently quit the climate science field because of its "craziness."

In the public domain, the debate has become highly politicized. Former US President, Barack Obama, has claimed that climate change "is a threat that may define the contours of this century more than any other" (Whatever exactly the contours of a century may be.). Former US Vice President Al Gore has likened denial of climate change to racism. NASA's former top climate scientist and Director of the Goddard Institute for Space Studies, James Hansen, has been arrested repeatedly as a participant in protests against pipeline development, tar sands development, and coal mining.

Stop Climate Change: Shoot the Rich

Which explains:

(a) why there will be no carbon tax, and

(b) Why the elite want to be rid of 90% of the world's population.

Another approach: 

CanSpeccy: Rising Atmospheric Carbon Dioxide, Part IV: Reversing the Trend

Related:

Business Insider: Study: Richest 10% are causing climate change

Rising Atmospheric Carbon Dioxide Concentration, Part IV: Reversing the Trend

Atmospheric carbon dioxide concentration has risen over the last 250 years by just over 40%, from 275 parts per million (ppm) by volume to almost 400 ppm, and is currently rising at the rate of 2.11 ppm per year, which if sustained means a doubling of the pre-industrial concentration within 70 years.

This change in the chemical composition of the atmosphere has at least three consequences of major concern:

First, by absorbing heat radiated by the Earth to outer space, the carbon dioxide added to the atmosphere warms the planet, though by what amount is highly uncertain due to the complex interactions among climate variables. 

Second, by increasing the efficiency with which plants use water in photosynthesis, it has increased global primary production by, according to some estimates, as much as ten billion tons per year. But not all plants respond to an increase in atmospheric carbon dioxide concentration in the same way, so that some species will increase in range and habitat dominance, while others will be at a competitive disadvantage. The net result will be the loss of many species both of plants and of the animals that depend on those plants for food or shelter. 

Third, it appears from current research that rather small increases in atmospheric carbon dioxide concentration may severely impair certain important human cognitive capacities.

The chief causes of rising atmospheric carbon dioxide are: 

Combustion of fossil fuel (65-85% of total change).

Conversion of old-growth forests to short-rotation plantations or bare land with the resultant atmospheric release of carbon fixed in both trees and forest soils (10-25% of total change). 

and the manufacture of cement, which involves the conversion of calcium carbonate to calcium oxide with the release of carbon dioxide (5% of total change).

Cooking with wood. Image source

As the Third World modernizes, scope for reducing worldwide cement usage looks slight to non-existent. There is, however, considerable scope for reducing forest destruction. Approximately half of the timber harvested worldwide is used for fuel wood, and that mainly for cooking over an open fire. Cooking over an open wood fire is highly inefficient. Converting two-thirds of the World's population from the use of fuel wood for cooking to the use of naturqal gas would massively reduce the associated carbon emissions, while also reducing the emission of climate-warming and health-damaging soot and volatile organic compounds. Substantial reduction in timber use as a structural material will be more difficult to achieve, although increasing substitution of oil-based plastics for wood is likely to occur.

Old growth stump versus spindly second growth forest, British
Columbia. Source

Large near-term reductions in carbon emissions can only come through reductions in the use of fossil fuel. Such reduction during a period of Third World modernization may be difficult to achieve, but is essential if a catastrophic poisoning of Earth's environment is to be avoided. For this, three developments are required. 

First, the upgrading of industrial processes to achieve higher energy-use efficiencies. Gas turbine electricity generators, for example, can have an energy-use-efficiency at least 50% higher than most existing coal-fired plants. 

Second, the redesign of the human environment, including residential architecture and transportation systems, to eliminate the massive expenditures of time, capital and energy necessitated  by the suburban/commuter life-style. 

Third, the redirection of consumption from energy intensive goods and services, such as airline travel, SUV's, and monster homes, to low-energy-content goods and services, including bicycles, and health, fitness, educational and religious services.

The efficient commuter. Image source

The challenge is to devise a way of driving the necessary changes in methods of production, life-styles and thinking. But central to any effective change in course will be to tax what we don't want, i.e., carbon dioxide emissions to the atmosphere, and to avoid taxing all the low-carbon goods and services that we do want. This means a carbon tax is essential. All that is needed is for governments to adjust their budgets to raise revenue from carbon emissions while reducing taxes on income. This will automatically adjust consumption preferences and reduce overall carbon emissions.

Beside its direct effect on carbon emissions, the carbon tax has two other important features. 

First, it will drive increases in carbon-use efficiency in the most cost effective way. Those who can reduce their emissions for less than the cost of the carbon tax will do so, whereas those who cannot reduce their emissions for less than the cost of the carbon tax will pay the tax and continue emitting, though at a reduced rate as the cost of what they sell is raised as a consequence of the carbon tax. Thus will be achieved a reduction in emissions at the lowest overall cost to the economy, with scope for increasing the reduction indefinitely by increases in the carbon tax rate. 

Second, the effective application of a carbon tax can be undertaken by any jurisdiction without consultation or agreement with any other jurisdiction. There is no need for international agreement. All that is needed is a countervailing import tax on goods or services from countries without a carbon tax of comparable severity to one's own. Such a provision not only protects the home industry from unfair foreign competition, but provides other countries with an incentive to introduce their own carbon tax.

Sadly, the beauty of the carbon tax mechanism, which we spelled out eighteen years ago, has yet to be recognized by any national government. It is encouraging, however, that the new government of Canada has promised a national carbon tax, although the value of such a measure will depend upon the details. There must be no exemptions for favored industries or regions and it must be accompanied by a countervailing import tax to protect Canadian jobs from unfair competition.

Related: 

CanSpeccy: Rising Atmospheric Carbon Dioxide Concentration, Part III: Induced Stupidity and the Decline of the West

CanSpeccy: Rising Atmospheric Carbon Dioxide Concentration, Part II: Ecosystem Disruption

CanSpeccy: Rising Atmospheric Carbon Dioxide Concentration, Part I: Carbon Dioxide Is Not a Greenhouse Gas