Tuesday, May 27, 2008

Carbon Tax Not McGuinty's "First Choice"

It will be interesting to see how the federal Liberal carbon plan is received by the Ontario Liberals. To be fair, you can't just point to proponents to support the idea of why a carbon tax could fly politically. There is potential for some "awkwardness", if the plan is rejected by McGuinty. The Toronto Star has a story, titled "McGuinty at odds with Dion over carbon tax". Not sure if it's more preference than at "odds", but it is relevant:
The tax, which is expected to be a central plank in the federal Liberal election platform, is one way to put a price on carbon and reduce greenhouse gas emissions, but his "first choice" for Ontario is a cap-and-trade system, McGuinty said today.

"It's one of the things that (Premier) Jean Charest and I are going to continue to talk about, to see if we might build the foundation for a national cap-and-trade system," he said.

"Every province has a different economic situation and we feel that from our perspective, a cap-and-trade system is the best way to go," he said.

Brother David:
David McGuinty downplayed concerns that the carbon tax plan could drive a wedge between the Ontario and federal Liberals.

He said he had a "general discussion" with his brother about the merits of one system over another, but said the premier didn't express an opinion about carbon taxes.

"It was more of an exchange of ideas around the two possibilities, the two primary market mechanisms that can be harnessed to achieve the same end, which is a price on carbon," David McGuinty said.

In fact, a federal carbon tax could complement a provincial cap-and-trade system, he said.

"I think what the premier's said is, `Look, given the here and now of the specificity of the Ontario economy, and how we would like to go forward in pricing carbon, we would rather go with a cap-and-trade system first,"' he said.

"But I doubt very much the premier's ruling out the notion of a carbon tax shift."

In the final analysis, the federal Liberals can't afford to have McGuinty completely offside, Ontario is key if the Liberals are to win the next election. That said, if the proposal does bring in a cap and trade component, as well as a tax shift, McGuinty could fall in line, or at least offer tepid approval. Nobody expects Ontario to walk in lockstep with their federal counterparts, but it is probably better that both are hashing out the details now, prior to release.

7 comments:

Mushroom said...

Please bring Buzz aboard.

Thank you very much.

Steve V said...

Buzz is a double-edged sword. In the end, if McGuinty is airing his view, it could lead to a stronger finished product.

Mark Dowling said...

How stupid are the McGuintys - "if one tax won't do, let's have two!" with all the consequent expense and bureaucratic overhead that goes with it.

Anonymous said...

McGuinty's input is crucial. If the federal plan provides for a federal carbon price floor it would need to be harmonized with the provinces' initiatives.

JimBobby said...

Whooee! The GintyGrits ain't got much credibility on the environmental file. The unkept promise to close all the coal-fired electricity plants by 2007 was a talk-no-walk thing. Ginty's bigass $40 billion commitment to expanding nuclear power is a loser for the environment and that money is not available to spend on at least puttin' scrubbers in the Nanticoke coal station. Ginty's Liberals are a liability to Dion's Liberals on Mother Earth issues.

JB

Mark Dowling said...

jimbobby - to be clear, the Libs not putting scrubbers on Nanticoke was not about money, it was that they asserted that the money would be wasted since they would have coal gone from Ontario by, er, um... 2007.

As it turns out, the scrubbers could have been running for at least a decade by the time Nanticoke (currently producing up to 4000MW) is fully closed in 2014 - assuming even this deadline is met.

As for nuclear, I note a NYT article yesterday on Vermont Yankee nuclear station:

At energy workshops last year, nearly two-thirds of participants said Vermont utilities should cease buying power from the nuclear plant — unless fossil fuels and out-of-state nuclear power were the alternatives, in which case more than half would continue with Vermont Yankee.

I would favour siting a small nuclear installation at Nanticoke (1-2 reactors, maybe 700-1000MW each) which would, among other things:
* reuse existing investment in transmission lines
* retain some of the local workforce in a region hard hit by auto's decline
* provide a conduit to sell power into the US and undercut the coal plants in Ohio whose exhaust causes smog in southern Ontario
* backstopping the electrification of public transit into LRT, electric GO trains and ultimately one hopes high speed rail and electric cars.

Möbius said...

Whooee! The GintyGrits ain't got much credibility on the environmental file. The unkept promise to close all the coal-fired electricity plants by 2007 was a talk-no-walk thing.

Yeehaw!

I'd put them on a even keel, since neither the Ontario Libs or the Fed Libs have any credibility on this.