"I do not support a carbon tax" - Stelmach

So says the premier... again.

So what does he support? What's Ed's answer to the gathering storm of a US boycott of oil sands energy (a group of US mayors has already called for a boycott and Barack Obama says that, because of environmental concerns, the oil sands are not part of his energy plan)? Will Ed simply ignore the growing criticism (like he's simply ignored the OECD report that attacked his squandering of Alberta's natural resource wealth)?

The premier has two answers, evidently.

Answer #1 is that "We're protecting each other in the Middle East and Afghanistan. We've been together in both world wars."

So according to Ed's first sentence, the US is protecting Canada (and the world) with its actions "in the Middle East" excluding Afghanistan, such that Canada's involvement in Afghanistan is not only a favour to the US (as opposed to a NATO obligation), but a returned favour.

The second sentence is essentially, "you owe us." So not only is Canada's involvement in Afghanistan a quid pro quo to the US, according to Stelmach, but he'd like to officially acknowledge, and call in his chips on, the additional quid pro quo of of overseas military action and commercial energy contracts.

Can we get a show of hands from all activists who have been de-motivated by the premier's remarks?

As one might expect, Stelmach's handling of the cross-border issue has not gone over well with the Canadian diplomatic community.

Answer #2 is that the premier is calling for carbon capture and storage (CCS) technology. To begin with, there is nothing multilateral about this approach (the Calgary Herald reports that the competing alternative of an emissions trading market remains something that "Alberta strongly opposes", despite the fact that it is something "a group of U.S. states, as well as B.C., Manitoba and Quebec, have signed on for"). Secondly, carbon capture is either A) not going to be seriously pursued or B) absurdly expensive, something I've noted before. Contributing to the costs is the fact that CCS requires a lot of energy itself, a negative feedback loop noted by the IPCC's 2005 special report on CCS, amongst others.

It appears that Stelmach has not only bought into the narrative of the left with respect to role of energy and geopolitical horse-trading in foreign wars, but into the US left's longheld (pipe) dream that America's dependency on foreign oil is but a technological breakthrough away. Premier Ed is going to seize the reins of America's hitherto futile quest for "clean" domestic energy and apparently deliver emissions-free, water use-free, land use-free, oil sands energy, by the magic of more efficient production technology.

Right wingers are usually skeptical of such pie-in-the-sky programs and their ballooning costs. Indeed, although many economists are amenable to carbon trading, seeing it as a promising supplement or even alternative to a carbon tax, it's my real world experience with markets that makes me somewhat dubious of carbon trading. It's one thing in theory, and another thing in reality. Markets can be abused enough when politics aren't directly involved never mind when the price of a carbon credit would ultimately be entirely derived from what the government's emissions cap is. If you thought the complaints about government interference in the Canadian income trust market were serious, you ain't seen nothing yet, compared to an emissions market where essentially all of the fundamentals behind market moves would be directly attributable to government policy. Remember these emissions instruments would have no intrinsic financial market value at all, but for government demands. Traders will have a convoy of metaphorical trucks lined up to drive through every crack of difference that exists between the policies of different jurisdictions.

Most concerning, however, is the fact that Ed's insistence on a unilateral "made in Alberta" solution means there is no one to share the costs with. Where is the money for CCS going to come from? I'll address that in a second post.