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The economics of Trudeau's carbon tax

Started by Anonymous, April 06, 2019, 07:39:47 PM

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Anonymous

Any price increase has two effects—an income effect and a substitution effect. The income effect is that higher prices for anything effectively make you poorer. To continue to consume exactly what you've been consuming you'll need more money. If you don't get more money, you have to cut back on spending, so you end up buying less of the good whose price has gone up but maybe less of other things, too.



But then there's the substitution effect. Even suppose we compensate you for the effective decline in your income, as roughly, Ottawa is trying to do with its carbon tax rebates. You will be unlikely, given the new higher price for whatever good we're talking about, to consume exactly the same amount of it as before. More than likely, you'll consume less of the now higher-priced good and more of other things.



This is very basic economics. It gets taught in the first couple of weeks of any introductory microeconomics course. You won't find many economists, not even conservative ones such as myself, arguing with it. It would be like a mathematician arguing with basic arithmetic. Anyone who does argue with it—party leaders beware!—will look economically illiterate.



So it would be good if opponents of the new carbon tax focused on other possible problems with it, such as:



Global warming isn't that serious a problem or, if it is, it's best adapted to, rather than resisted.

Global warming is a global "public bad" and Canada's carbon tax will have only minimal global effect if other countries free-ride—as people can and often do when goods or bads are technologically "public," i.e. can be consumed even by people who don't pay for them.

The organization that brought us the Phoenix pay system may not be able to administer the new tax—or any tax—efficiently.

The new tax revenues eventually inevitably will stop being rebated and will instead be merged into consolidated revenue funds to provide ever more low-net-return public programs designed to make moral statements rather than solve real problems (though that would actually increase their carbon-reducing effect as it would add a negative income effect to the planned substitution effect).

Calculating the optimal level for the carbon tax—which in theory is the damage done at the margin by the activity being taxed—is hopelessly complicated so we'll never ever be sure we're getting it right.

It might well be better for the economy to use carbon tax revenues to cut taxes on income, investment and labour rather than to give cash rebates.

I could go on. It's certainly OK to challenge the carbon tax as a piece of public policy. It's eminently challengeable. But best not do it by denying simple truths about the price system. Especially if, in other areas, you cast yourself as a fan of the price system.

https://www.fraserinstitute.org/blogs/one-good-thing-about-the-carbon-tax?fbclid=IwAR1i94Xhlf_PdEAH2SDqNoOIW_2qXOpbqFrWM6VMrokw0tlrH_qXhanNo0w">https://www.fraserinstitute.org/blogs/o ... _qXhanNo0w">https://www.fraserinstitute.org/blogs/one-good-thing-about-the-carbon-tax?fbclid=IwAR1i94Xhlf_PdEAH2SDqNoOIW_2qXOpbqFrWM6VMrokw0tlrH_qXhanNo0w

Fight it, fight it, fight it.

Anonymous

Meanwhile Saudi Arabian oil is exempt from Trudeau's carbon sales tax.



Saudi oil still gets a pass on Trudeau's enviro rules and taxes



Just a quick question for the Trudeau government about its current tiff with the Saudis: If you're serious about standing up to Riyadh, how come you are stilling giving their oil a free pass? How come you have exempted it from your upcoming carbon tax and are not subjecting Saudi oil to the same environmental regulations you have imposed on Western Canadian oil?



It couldn't be because most Saudi oil is destined for Quebec?



You're supposed to be in a battle with the Saudis, yet an objective outside observer might think you're at war with Alberta, instead.



There are a lot of questions that could be asked of the Liberals over the fight they started with the Saudis.



For instance, while there is no doubt the Saudis have overreacted (big time), there is equally no doubt Liberal cabinet minister Chrystia Freeland started this row by sending out a couple of self-righteous tweets last week criticizing the Saudis for recent arrests of human rights activist.



This was nothing more than moralistic grandstanding by the Liberals. They ignored proper diplomatic channels and don't seem to have planned to follow-up their social media sanctimoniousness by having our diplomats in the kingdom file formal complaints.



The Liberals simply launched a couple of fire-and-forget missiles, with no thought of how the Saudis might react, just to prove to people in Canada how hip and high-minded they are. Changing Saudi human rights policy was never their intention.



Freeland and the Liberals are right about the substance of their complaint. Saudi Arabia should release noted rights advocate Samar Badawi, who has been imprisoned for her political views. But if they really wanted Badawi freed, a pair of holier-than-thou tweets was never going to do it.



So one of the other questions the Liberals could be asked is: How are your thoughtless-bravado tweets any different from Donald Trump's? Your tone might be more sophisticated than the U.S. President's, but you both set off international incidents by not thinking before you message.



Still, the most important question is my first one: How come in the middle of a trade spat with the Saudis, Ottawa isn't even imposing the same taxes and regulations on Saudi oil that it imposes on Alberta, Saskatchewan and Newfoundland oil?



It looks as if, a) the Liberal government isn't serious about standing up to the Saudis and b) they aren't serious about their own campaign to reduce emissions and save the planet.



Canada produces about 3.8 million barrels of oil a day. We consume about 1.8 million or 1.9 million, but we export around 2.7 million barrels a day.



Most days that leaves us about 700,000 or 800,000 barrels short, an amount we have to import from the U.S., the Saudis, Nigeria and a handful of other countries.



We have more than enough capacity to supply all our own domestic needs and still export nearly 3.0 million barrels a day. What we lack are pipelines that would enable us to get Canadian oil to Quebec and the Maritimes.



That leaves us dependent on Saudi oil even when we have a valid diplomatic point to make.



The second part, though, is perhaps an even bigger puzzle: If the Liberals are so intent on cutting Canadians' emissions by imposing a new carbon tax and by creating impossible new environmental standards for the approval of new pipelines, how come they let foreign oil enter the country without subjecting it to the same "green" taxes or the same environmental screening processes?



Keep in mind, too, that Liberals let millions of tonnes of American coal come into Canada for export to the rest of the world without imposing a carbon tax, either.



The short answer is: The Liberals aren't a serious government. They're nothing more than intellectually lightweight virtue-signalers.

https://torontosun.com/opinion/columnists/gunter-saudi-oil-still-gets-a-pass-on-trudeaus-enviro-rules-and-taxes">https://torontosun.com/opinion/columnis ... -and-taxes">https://torontosun.com/opinion/columnists/gunter-saudi-oil-still-gets-a-pass-on-trudeaus-enviro-rules-and-taxes

Anonymous

Trudeau is forcing poor people to decide to heat their homes or drive to work. Carbon taxes are another prog attack on blue collar working people.

Anonymous

Quote from: "iron horse jockey"Trudeau is forcing poor people to decide to heat their homes or drive to work. Carbon taxes are another prog attack on blue collar working people.

The way our NDP government imposed it's carbon tax in Alberta, my family is subsidizing Syncrude and Suncor.

Gaon

Quote from: "Fashionista"
Quote from: "iron horse jockey"Trudeau is forcing poor people to decide to heat their homes or drive to work. Carbon taxes are another prog attack on blue collar working people.

The way our NDP government imposed it's carbon tax in Alberta, my family is subsidizing Syncrude and Suncor.

Can you explain that.
The Russian Rock It

Anonymous

Quote from: "Gaon"
Quote from: "Fashionista"
Quote from: "iron horse jockey"Trudeau is forcing poor people to decide to heat their homes or drive to work. Carbon taxes are another prog attack on blue collar working people.

The way our NDP government imposed it's carbon tax in Alberta, my family is subsidizing Syncrude and Suncor.

Can you explain that.

I'll try Gaon..



Instead of taxing big emitters like the previous government did, she charges carbon to consumers, and then gives the money to big corporations like Syncrude and Suncor so they can invest in green technology.

 :crazy:

Anonymous

The former Ontario Liberal government's green energy and carbon tax plans were a hit list on the most financially vulnerable people in the province. I would like to lower emissions as part of an overall conservation effort. But, forcing people at the bottom economic rungs of the ladder to choose between heat, electricity and some imported produce ought to be criminal.

Anonymous

Quote from: "seoulbro"The former Ontario Liberal government's green energy and carbon tax plans were a hit list on the most financially vulnerable people in the province. I would like to lower emissions as part of an overall conservation effort. But, forcing people at the bottom economic rungs of the ladder to choose between heat, electricity and some imported produce ought to be criminal.

Carbon sales taxes are ineffective and make families like mine poorer.

Anonymous

If carbon taxes were implemented the way economists prescribed it wouldn't be so bad. But, in no place that has a carbon tax has that happened.

Anonymous

Quote from: "Velvet"If carbon taxes were implemented the way economists prescribed it wouldn't be so bad. But, in no place that has a carbon tax has that happened.

All I know is it takes money from my family and gives it to corporations.

Anonymous

IF YOU ARE CONVINCED OF "MANMADE GLOBAL WARMING", PROVE IT OR STOP SPENDING BILLIONS TO FIX SOMETHING THAT IS NOT BROKEN

MANMADE GLOBAL WARMING – IS A THEORY OR HYPOTHESIS THAT LACKS EVIDENCE.

In order for there to be Global Warming there needs to be appreciable warming. According to NASA/NOAA the Earth has warmed 1.53 degrees F since 1880 or 137 years. Another theory is the so-called hockystick equation which predicts that a rise in CO2 will cause the Earth's temperature to rise exponentially. Again, according to NASA, The CO2 has gone up and the Earth's temperature has not and therefore this theoretical equation is proven wrong. All the theories have been proven to be without substance and yet we spend BILLIONS supporting so-called renewable sources of energy and killing, and driving up the prices, of our natural resources Coal, Oil and Gas.

Anonymous

I have heard that concrete production emits a lot of C02.



Concrete is the most widely used man-made material in existence. It is second only to water as the most-consumed resource on the planet.



But, while cement - the key ingredient in concrete - has shaped much of our built environment, it also has a massive carbon footprint.



Cement is the source of about 8% of the world's carbon dioxide (CO2) emissions, according to think tank Chatham House.



If the cement industry were a country, it would be the third largest emitter in the world - behind China and the US. It contributes more CO2 than aviation fuel (2.5%) and is not far behind the global agriculture business (12%).


https://www.bbc.com/news/science-environment-46455844">https://www.bbc.com/news/science-environment-46455844



https://ichef.bbci.co.uk/news/976/cpsprodpb/1313C/production/_104804187_biggest_cement_producers_976px_v3-nc.png">

Anonymous

If there are plans to build a wind farm near your house sell before it's constructed.

http://wiseenergy.org/Energy/Health/LFN_and_Cancer.pdf?fbclid=IwAR0pCYCyEknDlaOATC_DGUA5UaBVnJzg7_KWeNqQDn-zLW5PfKtCkyGnQHY">http://wiseenergy.org/Energy/Health/LFN ... KtCkyGnQHY">http://wiseenergy.org/Energy/Health/LFN_and_Cancer.pdf?fbclid=IwAR0pCYCyEknDlaOATC_DGUA5UaBVnJzg7_KWeNqQDn-zLW5PfKtCkyGnQHY

Anonymous

Does anyone seriously dispute that a carbon sales is anything more than wealth transfer from the the lower and middle classes to big business.



$12M subsidy gets cold reception

Loblaw freezer grant slammed



It is safe to say the climate is heating up in Ottawa — and there's no debate about that.



Just one day after Loblaw Companies Ltd. received a commitment from the Liberal government for up to $12 million to make it's refrigeration systems more climate-friendly, the Canadian Taxpayers Federation is urging the grocery giant not to accept it.



"I don't think they should," said CTF Federal Director Aaron Wudrick. "It's a company that doesn't need taxpayers to pay for this. It would be impressive if they decided to not (take it)."



Politicians have been all over Prime Minister Justin Trudeau and, specifically, Environment Minister Catherine Mckenna for ever thinking of the idea.







NDP MP Charlie Angus tweeted: "(Loblaw owner) Galen Weston is worth $13.55 billion and Catherine Mckenna showed up at one of his stores to give his company $12 million — after being found guilty of price fixing bread prices. SNC, KPMG, Kinder Morgan — Justin Trudeau's idea of the needy."



While Canadians are being hit with a new carbon tax in the name of fighting climate change, Loblaw, owned by Canada's second wealthiest family, is getting paid with tax dollars to beef up its environmental efforts.



"It's madness," said Wudrick. "It's also not right."



Part of the reason is Loblaw has not always been an ideal corportate citizen. The company fessed up in 2017 to its role in a 14-year bread price fixing scheme which resulted in the grocer trying to make amends by handing out $25 gift cards to customers.



"We recorded a charge of $111 million in relation to the Loblaw card program," a Loblaw spokesman said Tuesday.



Just last year, the Tax Court of Canada — as reported by The Canadian Press — ruled Loblaw Companies Ltd. recorded a "$368-million tax charge" in a dispute over money being effectively shielded by it's Barbadian banking subsidiary, Glenhuron Bank Ltd. The company is appealing the decision.



As for the $12-million federal climate change grant, the Loblaw spokesman explained the "funding comes from our application to the Low Carbon Economy Fund in 2018, which is open to businesses, hospitals, cities and others aiming to reduce carbon pollution."



The renovations "adds to our company's investmentment of $36 million to reduce refrigerant emissions and will result in the equivalent carbon reductions of taking 50,000 cars off the road annually. Our range of carbon-reduction investments is over $100 million as we work to reduce our carbon footprint by 30% by 2030."



These are admirable pursuits, but when a company boasts more than



$11 billion in revenue and profit to shareholders of more than $750 million, it's not hard to see why regular taxpayers can't understand why they are being dinged at the pumps while this rich firm gets public assistance.



Wudrick is right. This break to Loblaw is both obscene and offensive.

Anonymous

I know a die-hard NDP supporter at work who still likes the idea of a carbon sales tax. The fact that the biggest companies and billionaires support it should tell the idiot it is bad for working people.