train said:
Are you confident that we actually know where the pay back or incentive part of his plan actually goes. In one speech he says it's going to low income tax payers and in this article in says it's for incentives. I take it this is another moving Liberal platform ?
The article I linked to was about the latest announcement regarding Dion's plan. The tax cuts for individuals and low income taxpayers are still part of his overall plan. There is no way an opposition party would be able to formulate a fully detailed plan right off the bat. Harper plans have been evolving since day 1 and they still are. Look at his flip flop on income trusts and todays announcement that they'll bail out our banks even though they just got finished saying everything would be hunky dory and they didn't need to do squat.
BTW, I'm not complaining about them changing direction today. I was complaining earlier because Harper was too doctrinaire and hesitated too long before he abandoned his hands-off approach. So I'm pleased that he swallowed his pride and set aside those non-interventionist theories.
If Dion became PM, I'm sure they'd check the books and make all kinds of adjustments as the plan took shape. Call that inability to fully predict the future a flip flop if you like but I'd rather have someone who is flexible and balanced than someone who clings to his preconceived ideas no matter how harmful they turn out to be.
While we're on the subject of preconceived ideas and plans that will have to evolve, this Reality Check article looks at Harper's green plan. It seems to be complicated and lacking in detail as well. So watch for announcements and adjustments as this one emerges from behind Harper's black curtain.
http://www.cbc.ca/news/canadavotes/realitycheck/2008/10/what_about_the_tory_green_plan.html
What about the Tory green plan?
Posted in Reality Check
Posted on October 8, 2008 10:07 AM
By Mark Gollom
Conservative Leader Stephen Harper rarely passes up an opportunity to characterize Liberal Leader Stéphane Dion’s Green Shift carbon tax plan as a recipe for economic disaster.
Harper has said the plan will "undermine the economy,” "drive up the price of everything” and hurt families in the process, and drive the country into recession.
What’s barely mentioned, if ever, is Harper’s own plan to clamp down on greenhouse gas emissions and the potential costs incurred by it. In fact, only two sentences are devoted to the issue in the Conservatives' recently released platform.
So what are the costs?
The Tories' plan, Turning the Corner, which was released last year, incorporates what is known as a cap and trade system. It imposes regulations (caps) on industries in selected sectors, forcing them to reduce their emissions intensity by 18 per cent by 2010 and a further two per cent every year after that.
If the companies are unable to comply, in other words, if their emissions are over the target, one of their options is to pay into a technology fund. The cost of the fund is a $15-per-tonne levy, up to 70 per cent of their excess emissions. That price will rise over time.
As for the other 30 per cent of excess emissions, companies will have to buy domestic offsets or credits from other companies whose emissions were below target (trade). The government has said the price for domestic credits will begin at $25/tonne in 2010 and rise to $65 a tonne by 2018.
A substantial part of the plan also forces oilsands facilites and coal-fired electricity plants that come into operation in 2012 to use carbon capture and storage, a process that would put carbon dioxide from fossil fuels back in the ground.
One thing that’s clear about the plan: there will be costs. The Tories admit as much that their plan will have a “measurable, negative impact on real GDP” and that Canadians can “expect to bear costs under the regulatory framework that are not trivial.”
However, the costs will be “manageable,” they say.
Yet, tax economist Jack Mintz has warned the economic consequences of Turning the Corner could be more dire.
He said it’s difficult to estimate the costs, but taxes, levies, any costs end up getting shifted to consumers to the extent they can.
Fears there will not be enough offsets
“If they can’t, then they end up firing workers or negotiating lower pay packages. That’s the reality.”
Mintz said what companies fear most is that they may not be able to get offsets that are affordable or that there may not be enough available.
“What they’re concerned about is in effect the price could be quite high for these domestic offsets, and they may have to cut back production” in some industries like electricity generation, which could lead to brownouts, he said.
“They’re quite concerned that that may be the only way they can comply with the regulations,” he said.
Mintz, a one-time opponent of the carbon tax who now favours the scheme, said he doesn’t think the Liberal plan will impose heavy economic costs because an increase in prices will be somewhat buffered by cuts to corporate and income taxes.
On Tuesday, more than 230 economists signed an open letter to the leaders of the federal parties urging action on climate change.
While not endorsing any particular political platform, the signatories agreed on 10 principles that include the view that pricing carbon “is the best approach from an economic perspective.” Regulation was seen as the “most expensive way to meet a given climate change goal.”
Also, a “cap and trade system provides certainty on the quantity of carbon emitted, but not on the price of carbon and can be a highly complex policy to implement.”
'Blunt instrument'
“You’re much better with a pricing [policy] than a regulatory one because a regulatory one is a blunt instrument,” said Nancy Olewiler, director of Simon Fraser University’s Public Policy Program, one of three authors of the open letter.
Regulations, such as the ones advocated by the Tories, impose a “one-size fits all approach” and don’t allow for companies to be flexible in coming up with solutions that could better curb emissions, she said.
“You may have a cheaper way of doing it but you have to comply.”
Olewiler said that under a carbon tax, companies know the costs they are facing. But a cap and trade system makes long-term planning difficult because of the uncertainty of the price of carbon.
Also, there will be costs from the bureaucracy of running the cap and trade market, which will include payment to financial intermediaries.
Despite her preference for carbon tax, Olewiler wouldn’t say the Liberals' Green Shift will necessarily be cheaper than the Tories’ plan, since the devil is in the details.
“All of the plans are too complicated. We need to see the details of how all of these plans would come about. The Liberal plan is very complicated, too.”
But the reality is, Olewiler said, no party can make the claim they’ve got the best or cheapest plan.
“But certainly what the Conservatives are proposing does not by definition make it cheaper,” she said.