Wednesday, May 14, 2008

Tread Carefully

Dion, taking advice from Hebert, is a risky proposition, but her latest column accurately maps the political landscape:
Under the lush green grass of a promising election harvest on climate change is a carbon tax minefield that could cost Stéphane Dion the next federal campaign if it is not navigated carefully.

First the good news: There is a wide audience that crosses party, age, gender and regional lines for the concept of punishing poor environmental behaviour while rewarding sound practices. Even in Alberta, where there is bad history associated with energy-related taxes, there is solid majority support for the full range of carbon tax options.

But the fine print of the poll also hints at potential trouble to come.

Hebert points to British Columbia, where support for the carbon tax scenarios is below the national average, a fact which is noteworthy, given the province's practical application.

There is opportunity on the environmental front, but it is true, Dion must walk a fine line for it too pay dividends, failure to accurately read the electorate, could cause more harm than good. However, I view it as a positive, that everyone is debating the Liberal "plan" before it is even articulated, because it provides more feedback, allowing for "tweaking", without the burden of total commitment. Dion has been vague enough to date, that nothing is written in stone, there is time to ensure the policy is sound. Once you jump, there is no going back.

A further tax on gasoline, or home heating, does bring the risk of political suicide. With the increase in gasoline, coupled with the just announced 20% increase in natural gas, the appetite for more "add-on" just isn't there. However, I think there is a way around this, a way to ensure we reduce emissions, without a universal tax.

Hebert mentions that 61% show some approval for a carbon tax, but she doesn't mention that on the question of a surcharge on over-consumption, the number jumps into the seventies. Canadians approve of the concept, wherein those that contribute more than the "average" are penalized, while those that demonstrate greater efficiency are rewarded. This ideal should be at the heart of the Liberal framework, the classic carrot and stick, punishing gluttony, celebrating responsibility.

I've heard mention of a system where everyone is alloted a certain threshold, based on a reading of what is required for normal household operation, what is considered reasonable fuel mileage, water usage. A system that offers an electrical rate for pre-determined "average" need, but then rises incrementally for excess use, is something that could easily fly. There could also be a "bonus" rate, for those that are able to trim their usage a certain percent. Such a system maintains an element of free choice, it doesn't disallow any behavior, but it puts a price on excess, it rewards constraint. Such a system is also less likely to hit lower income people hard, as well as the middle class, a criticism we have heard on the carbon tax front. If your usage is below average, or at average, you could benefit or maintain, there is little punishment, merely incentive. If you want to live in a 4000 square foot home, with an air conditioner the size of a garden shed, then you can do so, but the rest of society frowns on your disporportionate contribution to the problem, and that comes at a cost, which is re-introduced to offset your lavish lifestyle. Same should apply to the Hummer driver, or the person who waters their lawn for two hours everyday. This type of approach gives the individual the power of choice, and the consequence is entirely their doing, any additional "tax" is voluntary.

I believe the above is the best path to navigate Hebert's "minefield". Toss in a grace period to allow for changed habits, rebates to encourage the proper route, and the "minefield" might look like a a sea of electoral roses for the Liberals.

9 comments:

Ivan said...

Hmm...

I think the word you're looking for is "Progressive Carbon Tax"

In principal it's not a bad idea, however the trick would be to find a way to do it without increasing associated administrative costs (which are always higher with a progressive system)

MarkCh said...

Would children count as over-consumption, or would typical household consumption be calculated per person?

Steve V said...

"Would children count as over-consumption"

Yes, it would work as a population check too ;)

Heating your home isn't related to the amount of people inside, nor is air conditioning. About the only thing would be water consumption. I've already heard the minivan argument, but it seems to me people in Europe drive small cars and they reproduce too. We have a four cylinder CRV, so you can still have "room" without excess, but if you want something bigger, then it comes with a cost. I said there should be a grace period, along with rebates, so this would allow some turnover- by 2010, Ford and Toyota should have full electric hybrids on the market, put in some rebates and it starts to make sense, rebates funded with the "over" taxes. Just an idea.

Ivan, I think administrative costs are there no matter what you try, so that part must be accepted.

North of 49 said...

You're right about the "fine line". Take this as an example of the kind of detail that needs to be addressed, where you said:

"Heating your home isn't related to the amount of people inside, nor is air conditioning. About the only thing would be water consumption."

Well, that's sort of true, sort of not. Even with central heating, you can (and I have) shut off ducts to rooms that weren't occupied because the kids were living in residence, not at home. If it's electric baseboard heat, you can (and I have), disabled those and substituted portable oil-filled
radiators, much more efficient, and you need fewer of them because you can move them around.

Hot water. Consumption there is definitely related to how many people there are in the dwelling; for showers, for dishes, for laundry. For example, when there are just two of us living here, we can get away with one dishwasher load every two days. When our son is living with us as well, it's almost once a day.

Cooking. If you cook at home, you're not burning gasoline getting to a restaurant, yet you're increasing your own energy bill.

Renters. They can't just switch to lower-energy appliances, or rip out their walls and put in better insulation, and given the tight rental market in our city, moving is often not an option either.

Any carrot-and-stick plan is going to have to deal with issues like these, and this is just an off-the-top-of-my-head list, by no means exhaustive.

It's a good idea, so long as the execution is first-rate and has enough built-in flexibility (and common sense, please) to handle the inevitable injustices.

Möbius said...

This is the John Tory idea of Dion.

Non-Ontarians might want to look at how that strategy worked out.

Carbon taxes are a good idea, much like support for religious education.

Steve V said...

north

All fair points for sure. Any legislation is likely to leave some gaps, gaps that must be amended as we proceed.

Water consumption is a tough one, but if you offer an incentive for a low use toilet, then that alone could offset any additional use as a result of children (I have two).

Heating could be something as simple as turning it down an extra degree or two at night, nothing excessive.

People have to go about their busy, but the point would be to make sure we realize that use has a cost, and act accordingly. We need to become energy misers, as opposed to our current practices. It's amazing what you realize, once you see your own patterns. I turn off the water now when I'm brushing my teeth, turn it back on when I'm finished. A small thing, but the sort of thing that would be more widely practiced, if you know there was a "quota" of sorts.

In the end, I think this type of system is achievable, without much sacrifice, just responsibility. I think you bring it in incrementally, to allow the market to react, and give consumers time to update their equipment.

mobius

That's a terrible analogy.

gimbol said...

As a conservative that wants to see a Harper majority....

Please, please, please Dion, run with the carbon tax idea.
Taxes always seem like a good idea to those that believe they will never have to pay them.
The farmer needs to plant, and that big tractor has a big fuel tank...will this "carbon tax" increase his production costs?
The trucker transports the food to the market, and that truck uses fuel to run, will his costs not rise as a result?
The lights in the market use energy, will the market not also have higher costs?
With all those added operating costs, who do you think ends up paying for them...and where do you think the companies that have to pay them will cut?
"Hmmm? Stay in Canada and start paying the carbon tax, or head somewhere where there is no tax?"
Carbon tax = capital flight

Steve V said...

gimbol

Oh, so the farmer moves out of Canada. Does he move the land to China then? Great analogy.

I also love how simplistic the argument, it just assumes Dion would hammer people who are working, no built-in exceptions or modifications.


Anyways...

I thought this was relevant to what is happening in B.C.. Similar, in that arguing against a direct tax on gas, instead punishing gas guzzlers(private use for the Con majority DREAMERS) and rewarding economic vehicles.

Mushroom said...

I am sensing Clinton's failed BTU tax here.

Done it, did not get passed. Not going there again.