40th Canadian Federal Election - Welcome to another Conservative Minority (whee!)

[Ronald Pagan]

Originally Posted by jolinar of malkshor

Ah let see.....YOU?

Well clearly you can't read.

Where did I say that a carbon tax would lead to a 1 to 4% drop in GDP?

Nice to see Resolute can't read either.

Fail.

[Thunderball]

Originally Posted by Slava

I think that you under-estimate the American will to succeed here. While it sounds pie in the sky to eliminate dirty oil, you have to give them credit where it is due. The Americans are the most innovative and creative society on the planet. (Believe me, I'm a pure, unabashed Canadian nationalist but even in my short-sightedness I can come to the conclusion!). If Obama came out and said that this is what they were going to do and threw some money at it in terms of R&D, or even tax breaks and the will to succeed, its a definitely reachable goal.

I'm not suggesting that the Green Shift is infallible. I'm just interested in what the counter-policy is though. Rather than just say "The Green Shift won't work" I would like to see the alternative plan that will work. Instead of saying "We are in a better position to not screw things up fiscally" show me how that is going to be accomplished. Frankly, from a non-partisan viewpoint this last budget that was walking a razor-thin line of deficit doesn't instill that confidence in me!

If you subscribe to some schools of thought... having a large surplus is a sign of poor fiscal management (see Ralph Klein). It means most likely that too much money was taken in, or just as likely, certain departments were underfunded (again, see Ralph Klein). To this school of thought, a balanced budget is the right kind of budget.

I want to see the counter-policy to the Green Shift too. I would expect a less aggressive policy approach based on efficiency, technological research, and a incentive/penalty system for all high output industries... not just the overstated oilpatch (not saying the shift targets the patch exclusively).

I definitely do not underestimate the power of American will to succeed. Far from it. I just don't see eliminating safe Alberta oil in a time of political and economic instability as something either party would want to do. Especially when considering the amount of environmental regulation Alberta already has compared to the majority of OPEC nations. What they are more likely to do is focus on renewable energy and efficiency, while canvassing the Oilsands/shale states/provinces/countries into practicing more environmentally sound and efficient methods, using that "dirty oil removal" idea as a threat to force it through.

[Slava]

^ I am one who subscribes to that thought; I hate seeing these huge surpluses because in my eyes it says "I paid too much in tax that you didn't really need!". I would actually be fine with it, if I felt like there was some money being put away, or we had something to show for it...but I feel like we are spinning our wheels here in Alberta...education and healthcare are suffering. Infrastructure is horrendous and the Heritage fund hasn't really grown at all. I digress though...this is a federal thread!

To your second point: I don't know when the timing is better. I'm a pure Keynesian guy at heart though...so in my eyes when the economy falters the government ought to be spending and taking care of these issues. When the economy rebounds (and it will) the pain is all over and we can all reap the rewards. I do think that most viable options will involve some sacrifice on someones part...no solution will happen for free unfortunately.

[Thunderball]

Originally Posted by Ronald Pagan

Well clearly you can't read.

Where did I say that a carbon tax would lead to a 1 to 4% drop in GDP?

Nice to see Resolute can't read either.

Fail.

Okay, Canadian baseline growth is 2.4%. Canadian GDP is $1.27 Trillion.

Your numbers say a drop from 1 to 4%. So, that's a best case scenario of 1.4% growth (population growth rate is about 1%), and a worse case scenario is a net loss of 1.6% of GDP growth, or roughly $20.3 billion USD from the Canadian economy, or 531 937 x the per capita GDP of $38,200 USD, notwithstanding annual population growth.

The average (2.5% less the baseline) is a loss of 0.1% of GDP. That's still 1.27 billion from the Canadian economy or 33 246 x per capita GDP, again notwithstanding annual growth.

Not a pretty sight.

I've heard from some policy hacks that 1-4% less the baseline growth is initial, and with economic instability, it could get into the 1-4% below the current GDP before it gets better. But we'll stick with your numbers to avoid argument. Its still pretty brutal when you get down to it. Truth is, no one knows for sure how bad it could be, but the inflation on essential goods and services, coupled with decreased ability to compete in a hurting global marketplace, the only way economic growth could possibly go under those circumstances is down.

I'm no accountant or economist, I'm sure someone better based can illustrate it better.

[Ronald Pagan]

A quick correction to your back of the envelop calculations, (which are good).

You're using percentage points instead of percent. So if you assume a 2.4% growth rate in a BAU scenario, then if you substract 4% from that you'd have an annual growth rate of 2.3. It's not a huge difference but over time it will add up. Just not nearly as severe as your scenario.

I'm using modelling results from Mark Jaccard's CIMS model and a report found here:

http://www.davidsuzuki.org/files/rep..._green_eng.pdf

The model predicts that at a carbon tax of $75 per tonne with the revenue being recycled into reduced payroll and income taxes the effect would be a 0.18% reduction on baseline GDP of $1.7 trillion. In the order of 3 billion by 2020.

[jolinar of malkshor]

Originally Posted by Ronald Pagan

I'm using modelling results from Mark Jaccard's CIMS model and a report found here:

http://www.davidsuzuki.org/files/rep..._green_eng.pdf

Yup that is going to be a non-biased report.

Fail.

[Ronald Pagan]

CIMS is only considered to be one the best energy economy models in the world and Mark Jaccard is the pre-imminent energy economist in Canada.

[jolinar of malkshor]

Originally Posted by Ronald Pagan

CIMS is only considered to be one the best energy economy models in the world and Mark Jaccard is the pre-imminent energy economist in Canada.

Who funded the study? Oh ya, David Suzuki.

[Thunderball]

The study is a little misleading, as it focuses on the energy sector, and not its spin-offs... this tends to lessen the likely effects. Even in Oil Country, Alberta... only something like 17% are directly employed in the Energy sector. This says nothing about likely losses in services, retail, manufacturing, transport, aerospace, and agriculture. Not to mention damage from inflation and a general decline in global competitiveness.

This is where we enter the grey zone, and this is where it can get downright disasterous. Yes, there are the income tax cuts, but that is not guaranteed to be of any help, especially with their desired re-upping of the GST.

I'm going to assume Jaccard and CIMS were acting professional, but I can't help but notice who paid for the study... and who likely wanted a certain outcome exemplified. Just like "Our Fair Share" was penned by professionals, but lets face it, they were professionals paid to arrive at a certain conclusion. Some involved have publicly admitted that.

[old-fart]

Why would anybody believe anything fruit-fly-guy says?

[Ronald Pagan]

Originally Posted by Thunderball

The study is a little misleading, as it focuses on the energy sector, and not its spin-offs... this tends to lessen the likely effects. Even in Oil Country, Alberta... only something like 17% are directly employed in the Energy sector. This says nothing about likely losses in services, retail, manufacturing, transport, aerospace, and agriculture. Not to mention damage from inflation and a general decline in global competitiveness.

This is where we enter the grey zone, and this is where it can get downright disasterous. Yes, there are the income tax cuts, but that is not guaranteed to be of any help, especially with their desired re-upping of the GST.

I'm going to assume Jaccard and CIMS were acting professional, but I can't help but notice who paid for the study... and who likely wanted a certain outcome exemplified. Just like "Our Fair Share" was penned by professionals, but lets face it, they were professionals paid to arrive at a certain conclusion. Some involved have publicly admitted that.

The study is a little misleading, as it focuses on the energy sector, and not its spin-offs... this tends to lessen the likely effects. Even in Oil Country, Alberta... only something like 17% are directly employed in the Energy sector. This says nothing about likely losses in services, retail, manufacturing, transport, aerospace, and agriculture. Not to mention damage from inflation and a general decline in global competitiveness.

CIMS is a general equilibrium model meaning that it models the entire economy not just the energy sector. It does this by looking at input output tables for the Canadian economy and with the help of some linear programming can model the effects of reduced deman for one input (energy) to reduced (or increased) demand for all goods. So it's a good critique, it just doesn't stand in this situation, those effects should be captured in the model.

Don't get me wrong, all models are wrong, just some are more right. CIMS has a pretty good track record but no one knows what the exact effects of higher prices for fossil fuels will be.

This is where we enter the grey zone, and this is where it can get downright disasterous. Yes, there are the income tax cuts, but that is not guaranteed to be of any help, especially with their desired re-upping of the GST.

I agree things are getting downright disasterous, have you seen data from ice coverage of the arctic ice sheets this year? It's at levels of the most pessimistic outcomes from the most pessimistic climate models. Things are dire. I would like to reiterate that there is NO evidence to disprove anthropogenic climate change. Sunspots are a ruse, global cooling is a ruse, we are warming the planet.

And you say that a carbon tax would have a negative effect on Alberta, maybe... One thing is certain though, a warmer climate will have disastrous effects on Alberta and its water supply. Alberta, ironically, likely has the most to lose of any Canadian province from Climate change but it's people remain the most stubborn about doing anything about it.

More to the point, income tax and payroll tax cuts have demonstrated in countries that have implemented a carbon tax to have dulling effects on the economic costs. Germany, the UK, Sweden, Denmark have all implemented various types of income tax and payroll tax cuts to offset losses in employment. It has largely worked.

I guess my biggest beef is that people tend to myopically focus on the economic costs of a carbon tax. This is an important issue, I just think that many in this thread dont quite understand the breadth and depth of the likely environmental costs that come with climate change. If we can significantly reduce our emissions while only achieving a 1 to 4 percent reduction in BAU GDP growth wouldn't that be an appropriate risk to take?

[calculoso]

Originally Posted by Ronald Pagan

I guess my biggest beef is that people tend to myopically focus on the economic costs of a carbon tax. This is an important issue, I just think that many in this thread dont quite understand the breadth and depth of the likely environmental costs that come with climate change. If we can significantly reduce our emissions while only achieving a 1 to 4 percent reduction in BAU GDP growth wouldn't that be an appropriate risk to take?

My biggest beef is those that panic as soon as climate is brought up and figure we have to do anything and everything to "fix it" at any cost, only to disregard the total world picture.

I'm all for doing "our share", but in a measured and calculated approach. Jumping first and asking questions later (or going "oops.. didn't think that would happen") just isn't it.

[Stranger]

Originally Posted by calculoso

My biggest beef is those that panic as soon as climate is brought up and figure we have to do anything and everything to "fix it" at any cost, only to disregard the total world picture.

I'm all for doing "our share", but in a measured and calculated approach. Jumping first and asking questions later (or going "oops.. didn't think that would happen") just isn't it.

Couln't have said it better myself.

[Ronald Pagan]

Originally Posted by calculoso

My biggest beef is those that panic as soon as climate is brought up and figure we have to do anything and everything to "fix it" at any cost, only to disregard the total world picture.

I'm all for doing "our share", but in a measured and calculated approach. Jumping first and asking questions later (or going "oops.. didn't think that would happen") just isn't it.

Since when is a $10 per tonne carbon tax anything and everything to do something about climate change? Infact, a carbon tax is probably the most measured and calculated approach you could take. You have a really good idea of its revenues and the direct costs to consumers.

What would you suggest we do? More of the same? ie nothing?

[Flames in 07]

Originally Posted by Ronald Pagan

Since when is a $10 per tonne carbon tax anything and everything to do something about climate change? Infact, a carbon tax is probably the most measured and calculated approach you could take. You have a really good idea of its revenues and the direct costs to consumers.

What would you suggest we do? More of the same? ie nothing?

I don't think there is an easy answer but penalizing Canadian production in isolation will do nothing for the planet, it will just move production and investment to a different part of the world.

The only impact would be depressing the economy.

You can't just artificially tax the hell out of oil and have any meaningful impact. The way to solve dependancy is not to tax it, because people still need to drive to work. The planet needs alternatives and that will be our solution. These populist and nonsensical schemes that are only meant as a means to grandstand are just embarrassing.

[Ronald Pagan]

Canadian oilsands, electrical generation and personal transport is going to move to another country? Because those are the three main GHG emitting sectors in Canada. So your point is empty because it's not possible. Oil sands extraction may slow (marginally), demand for fossil fuel fired electricity will fall but aggregate demand for electricity sure wont besides, electrical utilities aren't going to relocate to China, impossible. Finally you simply can't outsource personal and freigh transport.

Manufacturing is a concern but it consists of less than 20 percent of our emissions, and guess what, it's already leaving the country. Maybe a carbon tax will reorient manufacturing towards green technologies and less carbon intensive goods, can't seem to hurt. And either way, broader macroeconomic issues are causing manufacturing to leave.

And to say that we're the only country that will price emissions is silly. Both American presidential candidates support emissions pricing throug a cap and trade system. Canada's main manufacturing province has already agreed to price emissions through the Western Climate Initiative. So, it seems to me like environmental concerns are ringing stronger. And to suggest that firms simply pack up and leave to where there are fewer environmental regulations has been disproved by the literature. The decision on moving a factory depends on far more considerations than just environmental regulations or taxes. Look at the EU for proof where many countries have carbon taxes and many don't. Capital flight in the region has been minimal.

[Flames in 07]

Originally Posted by Ronald Pagan

Canadian oilsands, electrical generation and personal transport is going to move to another country? Because those are the three main GHG emitting sectors in Canada. So your point is empty because it's not possible. Oil sands extraction may slow (marginally), demand for fossil fuel fired electricity will fall but aggregate demand for electricity sure wont besides, electrical utilities aren't going to relocate to China, impossible. Finally you simply can't outsource personal and freigh transport.

Manufacturing is a concern but it consists of less than 20 percent of our emissions, and guess what, it's already leaving the country. Maybe a carbon tax will reorient manufacturing towards green technologies and less carbon intensive goods, can't seem to hurt. And either way, broader macroeconomic issues are causing manufacturing to leave.

And to say that we're the only country that will price emissions is silly. Both American presidential candidates support emissions pricing throug a cap and trade system. Canada's main manufacturing province has already agreed to price emissions through the Western Climate Initiative. So, it seems to me like environmental concerns are ringing stronger. And to suggest that firms simply pack up and leave to where there are fewer environmental regulations has been disproved by the literature. The decision on moving a factory depends on far more considerations than just environmental regulations or taxes. Look at the EU for proof where many countries have carbon taxes and many don't. Capital flight in the region has been minimal.

It's not empty, you just don't understand how the world will adjust. The next marginal barrel will be similar oilsands type production in S America, same emmsisions as Northern Ab. If there was a barrel on the earth that was easier to extract than N Alberta it would already be happening.

And in some isolated cases they are packing up and leaving. Ask anyone in Sarnia and they can tell you all about it. Sorry it's not literature but it's a real life example where refining capacity will NOT be built in Canada and will be built in the US instead.

I would admit that a carbon tax is useful, but iff it is the same structure across the planet, not just Canada in isolation and last I checked Dion's plan is in isolation.

[Stranger]

This is my situation. I live in a small city. I am a carpenter and also work on the family farm. My only reason for living in town is it is close to work, as most houses in the area are being built in town. I drive out to the farm (about 40 mins) to help in seeding and harvest and fill the rest of the year with carpentry jobs. If farming was more optimistic, I'd rather live on the farm, but you have to go where the work is.

As for the carbon tax. I'm not going to stop driving my truck as I need it for tools and pulling a trailer. Our farm isn't going to use any less fuel to run our machines. There is no such thing as public transit in the area. I can't carpool. I can't walk to work. I'm not going to bike. So as I see it this is not going to change my life in any way other than having to pay more money to the taxman. Many people in Canada don't have an option to change, which means that it is a flawed plan. Our country is too spread out to be able to ask it's citizens to simply walk to work.

I'm all for making changes to our lifestyles, but collecting more money isn't going to change people's ways because people like me have no choice. I think we should invest funds into cleaner burning cars and alternative ways of powering our houses instead.

Maybe they can invent an electric combine. Till then we're buning around $600-700 worth of fuel per day here this harvest.

[Ronald Pagan]

Yep businesses are leaving, thanks (in part) to heavy investment in Oil sands which has driven our dollar up to the detriment of Canadian manufacturing. The reason businesses are leaving Sarnia have more to do with Oil sands extraction than with non-existent GHG regulations. I still don't get your point.

[calculoso]

Originally Posted by Ronald Pagan

And to suggest that firms simply pack up and leave to where there are fewer environmental regulations has been disproved by the literature. The decision on moving a factory depends on far more considerations than just environmental regulations or taxes. Look at the EU for proof where many countries have carbon taxes and many don't. Capital flight in the region has been minimal.

The literature? How about looking at reality.

Look at the Oil industry in Alberta. Look at the impact that Stelmach's Brilliant () increase in royalties have impacted the oil industry in Alberta. Look at how much they have slowed and how much investment has been moved elsewhere.. such as Saskatchewan.

Did the oil industry need to be "slowed down"? Probably.. but there were so many people telling us that increasing the royalties as much as Ed did would have no impact because it wasn't high enough.

Now... we have the Liberals and their Brilliant () carbon tax and we have environmentalists and other Liberal supporters telling us, much in the same way, that it will not have a huge impact on the economy.

Right.

Tell me another one.