Friday, March 14, 2008

federal Tories join Stelmach in opposing market solutions

I don't think I'd ever join the "Blogging Tories", and not just because I do not want to be put in the position of defending the spending, the shift in taxation from consumption (to income or investment), or the anti-democratic practices like the fact Rob Anders was acclaimed in Calgary West. Given that the Tory nomination process in a Calgary riding determines the MP, the absence of a competitive nomination effectively means the absence of an election. No meaningful election = no meaningful democracy. But perhaps Anders was acclaimed because no one else is truly interested in becoming a MP. I mean it's possible. It's also possible that I'm a Chinese jet pilot! Nomination shenigans are not restricted to Calgary West, either. Just ask my fellow Edmonton area Wildrose Alliance candidate John Baloun about his bid for a federal Conservative nomination. That said, the federal Tories can create a partial excuse for turning their backs on many of the old Reform party's policies by arguing that the Reform party could have never formed the national government. Stelmach's Tories have no such excuse; they could be significantly more fiscally conservative and democratically accountable without losing power.

But I digress. At issue today is the spectacle of a supposedly "free market" party preferring carbon emission mitigation via regulation instead of via market mechanisms. A letter sent to BC Finance Minister Carole Taylor signed by 70 academic economists from UBC, Simon Fraser, and UNBC, noted that

A carbon tax is superior to regulatory mandates because it allows both ordinary citizens and firms to adjust in the way that is best for them. It will also provide incentives for people to innovate, finding more environmentally friendly ways to produce and to live. In contrast, regulatory mandates force a “one size fits all” approach, are likely more costly to administer, and will always be one step behind in terms of the environmental technologies being applied.

Meanwhile, a US Congressional Budget Office study notes that

available research suggests that in the near term, the net benefits (benefits minus costs) of a [carbon] tax could be roughly five times greater than the net benefits of an inflexible cap.
The benefit of emitting one less ton of CO2 in a given year is roughly constant, whereas the cost of emitting one less ton of CO2 each year rises with each ton reduced. The reason for rising marginal costs is that companies that have to comply with an emission-reduction policy will make the cheapest cuts first and progressively more expensive cuts thereafter.

As I noted in another post, industry itself has called for a carbon tax (instead of regulation alone).

As environmental policy blogger Dave Sawyer notes:

... So, carbon tax with recycling is economically efficient, results in real reductions and can be politically acceptable. So, why are the provinces going it alone? Well cause the federal logic is priceless. But don’t let me sway you, let’s let minister Baird speak,

“We have a different focus, our approach is on industrial regulation”

You can’t script this stuff. We have a left leaning province implementing a carbon tax shift, a perceived left leaning organization, the David Suzuki Foundation, supporting a national carbon tax shift and a conservative government preferring regulations. Only in Canada, Eh.

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