To get the carbon tax/Alberta talk back in this thread, I'll post the following link.
http://news.nationalpost.com/news/wo...where-on-earth
Quote:
The average 1 megawatt-plus ground mounted solar system will cost US73 cents a watt by 2025 compared with US$1.14 now, a 36 percent drop, said Jenny Chase, head of solar analysis for New Energy Finance. That’s in step with other forecasts.
GTM Research expects some parts of the U.S. Southwest approaching US$1 a watt today, and may drop as low as US75 cents in 2021, according to its analyst MJ Shiao. The U.S. Energy Department’s National Renewable Energy Lab expects costs of about US$1.20 a watt now declining to US$1 by 2020. By 2030, current technology will squeeze out most potential savings, said Donald Chung, a senior project leader. The International Energy Agency expects utility-scale generation costs to fall by another 25 percent on average in the next five years. The International Renewable Energy Agency anticipates a further drop of 43 percent to 65 percent for solar costs by 2025. That would bring to 84 percent the cumulative decline since 2009.
The solar supply chain is experiencing “a Wal-Mart effect” from higher volumes and lower margins, according to Sami Khoreibi, founder and chief executive officer of Enviromena Power Systems, an Abu Dhabi-based developer.
The speed at which the price of solar will drop below coal varies in each country. Places that import coal or tax polluters with a carbon price, such as Europe and Brazil, will see a crossover in the 2020s, if not before. Countries with large domestic coal reserves such as India and China will probably take longer.
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Assuming this article is correct, and the all-in cost of new solar-driven grid capacity (i.e. with backup power/storage all included) will be cheaper than coal by the mid-late 2030's for sunny places like Alberta, I would recommend the following (given my assumption that GHG emissions are a serious problem that should be dealt with in a serious but efficient manner):
1) Keep the carbon tax, and continue to escalate it as planned (i.e. +10$/T CO2 per year until it reaches >$100/T CO2 or so, where real drops in emissions will have happened; keep increasing it as needed). This drives efficiency and encourages market and individual migration away from GHG-emitting energy sources. This would also drive development into CO2 capture and sequestration, which would become cheaper than paying the tax at some point here as well.
2) Don't have governments spend carbon tax revenues on green power generation or capital projects or efficiency programs or transit on our behalf. With the cost of said generation slated to go down, let the cost crossover happen and let private industry make the decision when and what to invest without spending public capital to do so. Basically, don't spend money now for something that will cost 2/3 or 1/2 as much in a decade just to signal virtue. This goes for other costly regulatory changes like closing coal generating plans - scrap those plans and let the market decide once carbon is priced.
If utility companies find it cheaper to build transmission capacity and buy green power from BC, fine. If they want to build solar/wind/nuclear plants, fine - let their shareholders bear the risk of those decisions, but incent them to make that decision by moving the domestic power market through pricing.
3) Reinvest all of the revenues in broad tax relief back to the sectors from which the tax was taken.
For individuals, divide the expected revenue paid by individuals by the population and increase the Alberta basic income tax exemption appropriately to offset the tax take (with a credit for minors/non-taxpayers in a household). For those whose incomes fall below the old income tax exemption line, refund the same savings as every other Albertan gets, using the existing GST rebate system; for those between the old and new exemption lines, reimburse them proportionally. Consider rebating a little more for rural people since we need rural people to have a well-developed province and because their individual expenses are higher than urban folk.
Owing to treaty obligations, indigenous Albertans on reserve would get the same rebate as all other non-tax paying Albertans, but would still pay the tax up front (which would also drive efficiency for that population).
For companies, determine the expected total tax to be paid by corporations and divide that by the total corporate tax collected to get a single tax reduction. If the expected intake works out to 0.5% off the small and large business rates, apply it equally to both rates. There is no sensible reason to discriminate against large companies who pay large amounts of business tax and hire large numbers of people to make the small business tax number lower.
High efficiency companies will flourish and others will come here for the low tax rate, low efficiency companies will struggle and will be eaten up by high efficiency ones, middling efficiency companies will do as well as before.
4) For trade, apply a tariff on incoming goods equal to the non-taxed carbon emissions intrinsic to the goods from jurisdictions without carbon costing. Refund the tax on goods going to non-carbon cost jurisdictions by the difference in the carbon price (100% rebate for those destinations that have no price).
Basically, don't make exported oil or wheat or manufactured goods more expensive for the buyer than imported oil/wheat/goods because of the hidden CO2 in its production and transportation. Don't shoot ourselves in the foot, don't make special exemptions for special industries - Farmers would pay but since a certain percentage of their product is destined for export (and wouldn't be competing against non-taxed domestic crops), they would be reimbursed depending on where how much of each crop was shipped.
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The trouble with our NDP plan is it is heavy on the wasted bureaucracy-driven central planning and wedge-politics socialist wealth-distribution, and lean on the tax relief part. This paradoxically makes the carbon tax easier to repeal for future governments, because if future governments were forced to raise taxes significantly to repeal a carbon tax (rather than to cancel mostly wasteful capital and wedge-politics spending), it would be much harder politically for them to do so.
