NDP's cap and trade plan: details?

I tried to find out details about the NDP's cap and trade plan from www.ndp.ca today, but all that site did was refer to Bill C-377. I read though Bill C-377 and all it seems to require is setting emissions targets, including long, medium and short term (5 year) targets (good in my opinion), and gives the government the authority to regulate emissions. But that's all. What about the details? Am I missing a document that somebody can point me to?

www.ndp.ca says that the "projected" price for credits when they are auctioned off will be more than $35/tonne. I'd be interested in how they get that figure. How certain can you be of it? If you are planning to spend the auction proceeds on new government 'green' programs, what's your budget?

Will the different provinces be upset and want to interfere (a very big political headache) because the auction process will be sending hundreds of millions of dollars from Alberta (where almost all electricity is generated from coal and other fossil fuels plus they have the oil sands projects) to, say, Quebec (where almost all electricity is generated from Hydro)?

How a phased-in carbon tax shift could temporarily reduce gasoline taxes

I've seen a number of blog posts and op-eds saying something like, "How could a carbon tax not increase gas prices?" Well, here is a way to phase in a carbon tax and actually reduce gas taxes temporarily.

Suppose you replaced the federal excise tax on gasoline with a carbon tax and phased it in according to the following schedule:
Year 1 $10/tonne CO2
Year 2 $20/tonne CO2
Year 3 $30/tonne CO2
Year 4 $40/tonne CO2
Year 5 $50/tonne CO2

Then the carbon tax on gasoline would be roughly
Year 1 2.5 cents/litre
Year 2 5.0 cents/litre
Year 3 7.5 cents/litre
Year 4 10 cents/litre
Year 5 12.5 cents/litre

But the federal excise tax is 10 cents per litre! So there you go: replace the excise tax with this phased-in carbon tax and you get three years of some gas tax relief for voters, repeat, voters.

From what I've read it seems that at the $10/tonne CO2 level, what the federal government would lose from motor fuel taxes would be roughly balanced by revenue from taxes on other fossil fuels. That seems like a good place to start.

You may ask, why introduce the carbon tax if you're just going to decrease gas prices and incent gasoline consumption? Well the point is that there is a lot of other fossil fuel consumption that is not taxed: coal in particular. Globally, high oil prices may be reducing demand for oil somewhat, but it's not reducing greenhouse gas emissions so much because people are being driven to burn more and more coal (not in Canada, in other countries). Coal shouldn't be getting that free ride.

An unlikely place to get an idea about elasticity of demand for motor fuel in Canada

The Canadian Taxpayers Federation website contains an online poll
that, at the moment, contains the following results:




Two thirds of respondents are either driving less or purchasing a more fuel efficient vehicle. It's no surprise that Canadians are responding to price signals which is the motivation behind introducing a tax shift in the first place.

Now if only the CTF could be convinced that using less motor fuel is a good thing, or that the tax rebate part of a carbon tax shift plan would also be a good thing...but alas who knows what they think since the same webpage shows that they are getting their information about climate change from Friends of Science, the oil industry funded organization that may be in trouble with Elections Canada over un-registered election spending during the last Federal election.

Liberals and Conservatives agree on a carbon tax...

From the Conservative Party website, George Osborne, Monday November 27, 2006 in a speech to the CBI conference in London: "We want to shift the tax burden away from income and investment and onto pollution. Pay as you burn, not pay as you earn."

From Liberal MP Garth Turner's blog, May 19, 2008: "The idea is to shift taxes, not raise them...Tax what you burn, not what you earn."

The only problem is that Mr. Osborne is Shadow Chancellor of the Exchequer and a member of the British Conservative Party.

Dear Mr. Layton: Don't wait for the debate over how to implement a carbon tax shift before planning to help the poor with spiking energy prices

Letter to the Editor of the Toronto Star

Re: Carbon Tax Would Hurt Poor, NDP Says May 23, 2008

We need to protect the poor from spikes in energy prices right now. I think that the NDP should concentrate on that issue instead of fear-mongering about the Liberal Party's carbon tax shift. The reason is that when we come up with a good plan to deal with that issue, a plan which does not contain a subsidy for fossil fuel use, we will also have produced a plan to help the poor adjust to the carbon tax. I suspect that the Liberal's carbon tax shift plan will contain just that.

We're used to tipping fees for garbage

David Suzuki made a point yesterday on CTV's Question Period that I think is worth re-iterating. All of us are already paying a tax on pollution: the tipping fee that we pay to landfills in order to dump our garbage. For the most part, that tax is built into our overall property tax bill or rent, instead of being a line item, so we just don't see it. But you can see it if you have extra waste and you have to haul it to the waste disposal site yourself. In the City of Kingston, you get your vehicle weighed when you enter and exit the site and you pay $71.23 per tonne of garbage that you leave.

It looks like the new Federal Liberal green tax shift plan may be leaving the tax on gasoline unchanged (the 10 cent federal excise tax) but instead using it as a benchmark to define an equivalent price on CO2 emissions of $42 per tonne, and to apply that benchmark on other forms of fossil fuels. It's hard to argue that a $42/tonne fee for CO2 emissions is so unreasonable compared to the tipping fee ($71.23 for Kingston, Ontario) that we already pay for our garbage.