GreenerPolitics

By Justin Wolfers, New York Times

There’s no doubt that Americans are currently frustrated by high gas prices. And certainly many voters believe that “something oughta be done about it.” But why? Here’s a simple taxonomy of concerns:

1. Relative prices: Are people frustrated that a gallon of gas now requires more foregone “stuff.” Or alternatively phrased, are they concerned about the low relative price of “stuff”? Stated this way, it sounds a bit odd that we are so upset that the benefit of giving up one more gallon of gas is now a heckuva lot more stuff. (Indeed, environmentalists should be thrilled.)

2. Absolute prices: Are people concerned about the change in the absolute average price level? The consumer price index is currently 216.632; is this too high? If so, what is the right average price level?

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I attended a fashionable cocktail party in Calgary last night and used the time to gauge people’s initial response to the carbon tax brought forward by Stephane Dion.  It’s valuable in these kinds of debates to spend the first week or so observing and empathizing with the people you wish to convince and not to offer any arguments.  Understand and empathize where people are coming from and take them into account when you attempt to persuade them.

Facts and statistics and science are good, but people will not care how much you know until they know how much you care.  Understand, empathize and pattern your argument to your audiences.

The response was universally negative and the arguments against were not against the idea of carbon tax, but rather against the credibility of the government to honestly implement it.

Argument 1.1: The money collected by the carbon tax will be going into government general revenues instead of being specifically targetted to a specific program.  If it is going to a specific program, the government will need to expand its bureaucracy to collect, track and spend the money.

More taxes = bigger government.
Bigger government = bad

Argument 1.2: The Liberals cannot be trusted with the money.  In the wake of the sponsorship scandals, the gun registry and its long-remembered reversal on the promise to scrap the GST, the Liberals cannot be trusted to honestly implement this program.  This inherent distrust of Liberals and of government in general is a very strong argument against the implementation of a carbon tax shift program.

Kudos to the Alberta Progressive Conservative MLA Iris Evans who used her media time to equate Dion’s carbon tax to the National Energy Program.  If there are any three letters in the alphabet that get Albertans backs up on an issue in a way that forstalls rational thought, it’s N.E.P.

Well played, Ms Evans.  Well played.

Kudos also to Prime Minister Stephen Harper who labelled the Liberal’s program as ‘crazy’, a sentiment that was repeated almost verbatim by the rum drinkers in the crowd.

Stephane Dion has made the most important political play of his tenure as Liberal Leader by introducing a Carbon Tax proposal. He has called it the Liberal Green Shift.

Coming on the heels of the Green Party of Canada’s plan (you can read the document here) the Liberal plan is the greatest shift in Liberal thinking in over 25 years.
The ’shift’ that happens is a shift from taxation on income to a tax on carbon fuels; the stuff that dirties the air, warms the planet and generally toxifies our environment.

This proposal touches on a number of different areas: global warming, pollution, energy and income.  Not only does it touch these issues, it also makes us reexamine our taxation strategy.
In recent years, taxation has been used to modify behavior.  By increasing the taxation on cigarettes and alcohol, for example, the government discourages its use and reduces the damages caused by these products.  If this is the rationale, how can you explain a tax on income?

Is making money bad for you?  Is it bad for society?  Have we unintentionally modified our behavior by deciding to tax income?

All these questions are fascinating and I hope people would love to discuss them on this site.

RHÉAL SÉGUIN AND KAREN HOWLETT, Globe and Mail

QUEBEC — A cap-and-trade system aimed at fighting global warming could be up and running in Canada’s two largest provinces as early as January 2010 under an accord signed today by the Ontario and Quebec governments.

The agreement signed Monday commits both provinces to work with other jurisdictions to design a regional market that will set limits on greenhouse gas emissions and introduce a credit system whereby companies that exceed their limits would pay a fee to those that come under the cap – essentially trading cash for credits earned by their competitors.

The accord followed a historic joint cabinet meeting that sent the clearest signal yet the country’s two most populous provinces have forged a new central Canadian political alliance.
Premiers Dalton McGuinty and Jean Charest suggested Monday that the federal government will have no choice but to follow their lead.

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