Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Thursday, November 29, 2012

Why a carbon tax makes sense to conservatives

One of the more revealing moments of Prime Minister Stephen Harper’s recent trip to India came when he was asked about the pollution and smog around the beautiful Taj Mahal. The prime minister responded that this was a question for the Indian government to answer. Good diplomacy, but there’s a larger question here: what is Canada’s energy policy?

Canada has a deposit of natural resources under its soil and water that other countries envy, yet we lack anything like a coherent and ambitious national energy strategy. As Canada pivots to an Asia filled with flourishing economies and a burgeoning appetite for energy, and as the Middle East begins a prolonged phase of turmoil, it is time for Canada to adopt what I call a ‘Grand Energy Strategy’.

This past summer, the Senate Committee on Energy, the Environment and Natural Resources published a report on the need for a comprehensive policy. The committee warned that time was running out. “There is a great sense of urgency,” Senator David Angus said at the time. “The future is fraught with peril if we don’t get it right.”

The Harper government was right to take Canada’s economic message to Asia, even if it was a belated move precipitated by the Keystone XL impasse south of the border. Canada currently sells all of its oil either to itself or to the United States, and the U.S. purchases Canadian crude at a cheaper rate.

Canada’s dependence on the voracious American appetite for oil will end sooner or later — the evidence points to sooner, much sooner. A recent International Energy Agency report concluded that the United States could become a net exporter of oil and gas by 2035 as Asia buys up most Middle Eastern oil.

A Grand Energy Policy should broaden Canada’s range of trading partners and pacts, sell more energy to Asia, expand natural gas production, invest in green energy research and projects and, most importantly, institute a tax on carbon.

The last element of this new Grand Strategy is considered anathema in Canadian political circles. Everyone recalls Stephane Dion’s swift fall after voters rejected his Green Shift proposal.

However, a tax on carbon will be central both to a stable economy and a sustainable environment in the future. It’s also a factor in a 21st century foreign policy which will place Asia at the center of Canadian concerns and opportunities.

A carbon tax would be both economically efficient and environmentally friendly. In economics jargon, a tax on carbon is a Pigovian tax, one that adjusts for an activity which produces social costs in excess of the cost paid by people participating in the activity — in this case, everyone who burns fossil fuels.

If a company emits a million tons of CO2 into the atmosphere, it passes on the social cost to the public. The results are private economic gain and social economic loss. That’s not just inefficient, it’s also immoral.

Just as excessive national debt will undermine the prosperity of future generations, unchecked greenhouse gas emissions will harm the air they breathe, their health and well-being, and distort global climate patterns. Making companies and individuals pay for their environmentally unfriendly actions could get Canada back on track for a sustainable future.

While the Conservative Party of Canada derided supporters of a carbon tax in 2008, the idea has near-unanimous support among both right-leaning and left-leaning economists, including economic advisors to both Ronald Reagan and George W. Bush. In a profession not known for consensus, this is a remarkable thing.

In fact, N. Greg Mankiw, George W. Bush’s top economic advisor, has created what he calls the “Pigou Club” of luminaries who support such an idea. To date, it includes Nobel Prize winners, prominent journalists and lawmakers.

Why? Because a tax on carbon is conservative. An effective carbon tax raises revenue from something that is harmful to the economy and society, while reducing income taxes and providing working class families with additional relief.

A carbon tax would encourage people to drive less, thereby lowering traffic congestion, and would give companies an incentive to invest in renewable energy sources. Gasoline prices would rise by a few cents, but this would pale in comparison to what we can expect from the current volatility of oil markets beholden to the Middle East.

British Columbia introduced a carbon tax in 2008; the results have been promising. The tax started at $10 per ton of carbon and increased by $5 per ton each year. Between 2008 and 2010, B.C.’s greenhouse gas emissions decreased by 9.9 per cent while the rest of Canada’s decreased by 4.6 per cent. All of this was accomplished while B.C.’s economy grew faster than that of the rest of Canada.

A carbon tax as part of a broader Grand Energy Strategy would serve Canada well this century. This strategy would encompass producing more domestic energy while investing in promising green energy sources — wind, biofuels, nuclear, solar, tidal. Just as Canada pivots to Asia, so too must it pivot to a sustainable energy future.

Canada has the potential to become an energy superpower this century. It’s time our government acted to make it happen.

Original Article
Source: ipolitics
Author: Omer Aziz

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