Saturday, January 10, 2009

Exxon Supports A Carbon Tax Because...

A trading program, known as 'cap and trade,' 'inevitably introduces unnecessary cost and complexity' that reduces effectiveness, said [Rex Tillerson, CEO of the Irving, Texas based company]. They require a vast expansion of regulation, he said. A carbon tax 'can be more easily implemented' and is the 'most efficient means of reflecting the cost of carbon...'

'Such a tax should be made revenue neutral,' he said, which requires other taxes to be lowered so that the overall tax burden isn't increased"

But, given our last federal election result, is one still a viable policy option in Canada, or are we stuck with some version of C&T merely because it has the advantage being, in effect, a hidden tax, and thereby palatable to our bovine electorate?

B.C. will be the test case, I imagine. There Campbell introduced the tax between elections rather than trying to run on it, and it seems to me (though I am happy to be corrected) that some of the anger it generated has abated.

And of course there's the Quebec carbon tax, which certainly was not a drag on the Charest government last time around. But of course they're weird and Gallic and, at 0.8 cents per litre, the tax was barely noticeable in the first place.

21 comments:

Ti-Guy said...

or are we stuck with some version of C&T merely because it has the advantage being, in effect, a hidden tax, and thereby palatable to our bovine electorate?

Probably.

I've always thought most taxes/deductions (VAT taxes, payroll deductions) should be hidden (but easily calculated), only because the average person's understanding of finances is mostly psychological and easily manipulated.

Thus, we get the electorate screeching about David Dingwall's expensed chewing gum while the hundreds of millions of dollars the government is flushing down the toilet as a result of convoluted purchasing procedures go largely unnoticed.

Ti-Guy said...

Oops. Forgot the URL:

Here.

Henry said...

Stephanie's carbon tax was not revenue neutral. Only about 50% of the tax would have been returned through income tax reduction.

AGW is quickly fading as a story. Euroweenie warmers have gone into hibernation as Europe experiences its coldest winter in a century. Iggy, who wants "permanent tax reductions" in Harper's budget can be expected to let the Green Shift shift into forgotten history. In face of global economic meltdown, global warming becomes last years trendy concern. And we can all be thankful for that.

Robert McClelland said...

The fact that Exxon (CO2 is life) supports a carbon tax is reason enough to think it won't accomplish anything.

Robert McClelland said...

AGW is quickly fading as a story.

Sure it is. That's why Obama is about to implement a massive plan to reduce ghg emissions. You climate change deniers are so daft that you don't even realize that most people have simply moved on to the next phase of the discussion which is what to do about AGW.

Steve V said...

"AGW is quickly fading as a story."

Keep telling yourself that, and I recommend mittens to cut down on the knuckle dragging sores.

Ti-Guy said...

Stephanie's carbon tax was not revenue neutral.

Fuck...shut up, asshole.

Ti-Guy said...

The fact that Exxon (CO2 is life) supports a carbon tax is reason enough to think it won't accomplish anything.

Robert, I spent a lot of time following the analyses of dozens of economists on this and the final word seemed to be that a carbon tax and cap and trade amount to pretty much the same thing. With a carbon tax, however, the price of carbon would more predictable.

bigcitylib said...

Unfortunately, I think that Henry is right in that the Libs played fast and loose with the term "revenue neutral" with regards to the green shift. Part of Dion's problem was that, not only did he run on a tax policy, it was a tax policy that was not even particularly well thought out. For example,everyone whose studied these things knows that rural voters will get dinged harder by a carbon tax, so any special breaks for them should be in your plan up front. Dion added them in later and it looked like he had shifted position. He also said that the shift was revenue neutral, and then still revenue neutral after having committed an extra billion or so for these special breaks. How is that possible?

Ti-Guy said...

Unfortunately, I think that Henry is right...

How can he be? I don't even know who Stephanie is?

Don't enable them, BCL.

As for rural voters, they're nothing but a net drain on taxpayers as it is.

Henry said...

The coalition is dead McClelland. Go back to the Marxist fringe where you belong. Take Ti-guy with you.

Obama is pragmatic. During the US campaign he was dead set against offshore drilling until the US voter told him he shouldn't be.

Politicians will talk all the green BS they like, even Bush could do that, but has Obama said he would sign on to Kyoto or impose a carbon tax? Don't think so. "Green" projects can be almost anything: subsidies to public transit, R&D into more fuel efficient cars, clean coal (which Obama has said he supports) all good stuff without drinking the Kyoto cool aid and raising new taxes.

It is so heart warming to watch the LPC move back to its centre right roots under Mr Ignatieff.

Ti-Guy said...

It is so heart warming to watch the LPC move back to its centre right roots under Mr Ignatieff.

It take so little for some people's entire "reality" to change, doesn't it?

You are a deeply unserious person, Henrietta.

JimBobby said...

Whooee! Yer gettin' me riled, Ti-Feller.

Rural voters are the ones keeping the dirty power plant running here in Nanticoke so city dwellers can leave the office lights on all night.

Rural voters are the ones digging in the mines so Bay Street can back up its profits with hard resources.

Rural voters are the ones toiling in the salt mines up in Goderich so city streets can be cleared of ice and restaurants can put salt shakers on the table.

Rural voters are the farmers who are who grow the food and meat that city dwellers eat every day.

Rural voters are the year round residents servicing the resort communities where city dwellers spend their holidays.

Rural voters are the snowplow drivers and road crews that make it possible for city dwellers to travel from city to city.

Rural voters are watchdogs, custodians and the first line of defence for the environment and keeping lakes and rivers clean and lands green and growing and sucking up CO2.

Rural voters are Canadian citizens with rights and responsibilities just like city dwellers.

WRT to the topic, Exxon sees the writing on the wall. Obama has committed his administration to tackling GHG's and big oil knows its going to take some medicine. They're only saying the same thing pretty much every credible economist has been saying for a long time.

JB

Henry said...

"Fuck...shut up, asshole."-Ti-guy

Your idea of a serious person?

The Rational Number said...

I prefered Dion's Green Shift and believe it was mostly revenue neutral. However, I've written it off now, it has been soured in the minds of too many voters.

I think Exxon is probably raising this issue for several reasons.

First, to confuse and delay action on the C&T system. As long as the battle is still active, you haven't yet lost.

Second, it strengthens the Republican position in the minds of some voters. It give talking points to right-wing pundits.

Third, a carbon tax is friendlier to business and the economy than cap-and-trade, especially if that tax is very small or negligible. "See: we're doing something! Look at the millions of tax dollars! How can you say it isn't enough." A carbon tax with real teeth would bring in a lot of revenue.

Fourth, they can argue for it to be revenue neutral there must be corresponding decrease in corporate taxes to offset the carbon tax. And by corresponding I mean much, much greater than.

Fifth, there are no limits to the price of carbon in cap-and-trade. You could easily imagine "bubbles" and speculation driving carbon prices to insane levels. Carbon competition is another competitive threat to a corporation. This is why I favour a carbon tax - it is much easier to predict and control the economic effects, where C&T controls the pollution and lets the price float as per the market. And that is why I'm confused as to why the Green party favours a carbon tax over C&T.

In short, they want a system that won't burn them like fluctuating energy prices affect others.

Just trying to be rational.

Robert McClelland said...

Robert, I spent a lot of time following the analyses of dozens of economists on this and the final word seemed to be that a carbon tax and cap and trade amount to pretty much the same thing.

I can't say I'm impressed with any economist that thinks Sweden's $150/tonne carbon tax and resulting 2% reduction in GHGs is economically rational.

JimBobby said...

And that is why I'm confused as to why the Green party favours a carbon tax over C&T.

The Green Party wants both systems working side-by-side. CT is quicker to implement, if less effective. C&T takes a long time to implement and is best suited to specific industries. GPC policy calls for immediate tax-shifting from income and profit to carbon and pollution. GPC policy also calls for cap & trade to be implemented ASAP, recognizing that ASAP is several years.

JB

Ti-Guy said...

Your idea of a serious person?

Absolutely. When people start talking shite, telling them to shut the fuck up is the most serious, sensible thing anyone can say.

lenny said...

"For example,everyone whose studied these things knows that rural voters will get dinged harder by a carbon tax, so any special breaks for them should be in your plan up front."

Won’t higher gas prices hurt people in rural communities who rely on their
cars to get around?
One of the main impacts of the carbon tax on individuals is related to their
transportation habits. Transportation accounts for the largest source of carbon
dioxide emissions in our daily lives. But it’s simply not true that people in rural
areas depend on their cars more than people in urban areas. According to data
collected by Statistics Canada, on average British Columbians living in the Lower
Mainland drive further to work than commuters in rural and northern B.C. The
average Vancouver commuter drove a distance of 7.4 km between work and
home, much farther than the average commute of 2.5 km in Fort St. John, 1.7 km
in Dawson Creek, 5.4 km in Prince George, or 3.6 km in Williams Lake. The
average commute to work is three times less for residents in Fort St John than the
commuter in metro Vancouver. As well, rural commuters spend less time idling in
traffic than people in urban areas do. All British Columbians, whether living in
urban or rural areas, can choose to save money by making green choices. Many
solutions such as choosing a more fuel efficient vehicle or keeping a vehicle well-
maintained are available regardless of where you live.

www.smartgrowth.bc.ca/Portals/0/Downloads/FAQsCarbonTax_SuzukiFdn.pdf

John Mashey said...

I hope that ExxonMobil actually means it, and after all, James Hansen favors a (revenue-neutral, rising, predictable) carbon tax.

As always, there's a question (whose answer in this case I don't know);

a) One proposes a tax that will be so small as to have no effect on consumption.

b) One proposes a tax that will be big enough that it won't ever get voted into law.

a) and b) are *misdirection* arguments, like some found in Bjorn Lomborg's Copenhagen Consensus, as per my argument in Lomborg and Playing the Long Game @ ThingsBreak.

But, it might be:
c) One actually means it, and many business people do mean it, given its better predictability and simplicity versus cap-and-trade. ExxonMobil could actually mean it. Tillerson has only been CEO since 2006, so he may have different views from the past.

Chevron seems neutral:
"We do see the conceptual benefit of having the known cost of a carbon tax, particularly as we wrestle with so many other unknowns. "Cap–and–trade" offers additional flexibility for companies to achieve their GHG reduction goals."

But then, Chevron also already has a growing energy efficiency business.

bigcitylib said...

Actually, John M., I plan on doing a proper post on your Lomberg thing in a day or two.