CANADA NEEDS CARBON TAX

Two great gifts from Canada: Slings and Arrows and this new report.

The report says the only way Canada can significantly cut its emissions is by putting a price on them. It is agnostic on the choice between a cap-and-trade system and a carbon tax. It brings a battery of proofs to back up its assertion that the country must put a price on emissions if it wants to reduce them.

Canadian political leaders, like U.S. politicians, react to the tax the way Indiana Jones reacted to snakes. Prime Minister Stephen Harper: "That is something this government will never do…" Main opposition Liberal leader Stephane Dion: "I've always been against it…"

Unlike some North American nations, the Canadians are looking beyond today's stock prices. (click to enlarge)

Maybe the Canadians want to look at the plans for a cap-and-trade system being drawn up by the U.S. Senate.

Canada must adopt carbon tax, cap and trade system: report
January 7, 2008 (AFP via Yahoo News)

WHO
Canada’s National Round Table on the Environment and the Economy (NRTEE) (Glen Murray, Chair)

WHAT
NRTEE’s Getting to 2050: Canada’s Transition to a Low-emission Future reports that a stringent economy-wide price for emissions in the form of a tax or a cap-and-trade system is the only way Canada can reach its emissions-reduction goals.

The NRTEE report calculates that if Canada starts soon enough and stays with the program long enough, harm to GDP can be minimized... (click to enlarge)

WHEN
The report assumes Canada’s goals to be an emissions reduction of 20% below current levels by 2020 and 60% to 70% by 2050.

WHERE
The report describes goals and necessities that apply nationally. Subsequent provincial proposals are therefore meeting with controversy because they fragment the national effort.

...But not without changes in some sectors. (click to enlarge)

WHY
- The basic recommendation is that a national “price signal” is urgently needed to put market forces to work against emissions.
- A cap-and-trade system caps national and sector emissions and allows entitites to exceed the caps only by purchasing credits from entities that come in below their caps or from entities building emissions-reducing infrastructure or operating according to emissions-reducing best practices.
- A carbon tax would apply across the board on emissions-generating activities by business or consumer.
- The report’s recommendations place a high burden on Canada’s oil and gas sector but offers it economic opportunity for developing emissions-reducing technologies.
- The report contends the changes can be made without impacting the countries GDP.

A variety of tools can be applied for emissions reductions. (click to enlarge)

QUOTES
- Glen Murray, NRTEE chair: "These findings and recommendations are the first in Canada to set out scenarios and conclusions as to the most effective way to achieve deep, long-term greenhouse gas and air pollutant emission reductions related to specific targets at a national level…"
- Report, on economic impacts: "…if countries do not move in concert and Canada imposes deep limits on emissions, there will be more pronounced competitiveness impacts leading to profitability reductions…"