By Ian Angus. For the environment, there’s good news and bad news in Canada’s current federal election campaign. Good news: for the first time ever, climate change is a central issue in the political debates. Bad news: despite much sound and fury, none of the major political parties is proposing effective measures for dealing with the climate change crisis. The differences between them amount to “Don’t do anything” versus “Don’t do much.”
When Stephen Harper and the Conservative Party took office in January 2006, they promptly cancelled existing environmental programs and planned to ignore the environment from then on. Only a massive public opinion shift led them to awkwardly don green garb in 2007 and announce a new “Turning the Corner Plan” on greenhouse gases.
There wasn’t much to the plan — a detailed review by the respected Tyndall Institute concluded that greenhouse gas emissions over the coming decade would be the same, and might be lower, if the Conservative plan didn’t exist at all. The Tories’ close alliance with the Bush administration and its drive to block any international agreement on emissions targets shows just how misleading their green rhetoric was.
Now, with a recession looming, the Conservatives are fighting this election as the “party of free enterprise, free markets and free trade” — which means returning to their previous anti-environmental positions. Harper demagogically promises to defend economic growth, while charging that the Liberals “jeopardize our economic growth with new taxes and threaten to impose new trade barriers in their Green Shift Plan.”
Harper signalled his new direction most clearly by promising a 50% reduction in federal taxes on diesel and aviation fuel. That’s a $600 million fossil fuel subsidy to industries that generate 10% of Canada’s greenhouse gases. If the Conservatives are re-elected, no one should be surprised if they use “economic growth” to justify backtracking even on the feeble environmental measures they introduced in the past 18 months.
Polls show that the environment and climate change still rank very high as voter concerns, so the Tory policy shift offers an opportunity for the opposition parties to mobilize that concern in support of a strong pro-environment program. Unfortunately, none of them proposes effective measures for dealing with the crisis. The “solutions” they offer amount to little more than crossing their fingers and hoping that the problem will go away.
All four mainstream opposition parties — Liberals, New Democrats, Bloc Québécois and Greens — have embraced the currently trendy economic theory that the way to fight global warming is to “put a price on carbon.” Corporations and consumers emit greenhouse gases, the theory says, because doing so doesn’t cost them anything. If government imposes a cost, companies and individuals will seek alternatives — they will try to reduce or eliminate their emissions in order to reduce their costs.
The Liberal Party is the prime defender of this approach. The cornerstone of its election program is the “Green Shift Plan,” which they say will “shift Canada’s tax system away from income and towards pollution.” They promise to phase in a $40 per tonne tax on greenhouse gas emissions over four years, and to reduce corporate and personal income taxes by an equivalent amount. As a result, businesses will be “encouraged to reduce the amount of greenhouse gases they emit into the atmosphere,” while consumers will be motivated to insulate their homes and find other ways to make less use of fossil fuels.
The Liberals say they will begin the tax shift immediately. They also promise an emissions trading scheme for corporations, including caps on emissions — but say it “will take several years to build.”
The New Democratic Party argues, correctly, that the main effect of the Liberal tax plan will be higher prices for working people. Instead, the NDP wants to launch a cap-and-trade program quickly. They have provided few details about their program, but they have made positive statements about the Western Climate Initiative, under which several provinces and U.S. states propose to regulate emissions while allowing corporations to continue polluting by purchasing emissions credits from the government, other corporations or Third World countries.
The NDP website says its plan is “in line with” a similar scheme implemented in Europe. It is silent on the fact that the European system has produced windfall profits for energy companies while having no effect at all on emissions.
The Green Party and Bloc Québécois propose variants on the two main themes. The Greens want a cap-and-trade program for large corporations, combined with a shift from income taxes to carbon taxes for consumers. The Bloc favours cap-and-trade, organized on a province-by-province basis.
Will market solutions work?
There is much more than this to each party’s program, and each party promises a different set of reforms and subsidies. But underneath those variations in style and detail, the opposition parties are united in seeking to use capitalist methods to solve a problem that is inherent in capitalism. “Putting a price on carbon” — directly through taxes or indirectly through a cap-and-trade scheme — means depending on the magic of the market to reduce emissions.
At best, that’s wishful thinking.
Consumers can only make significant emissions cuts if affordable low-emission alternatives are actually available, which they are not. In practice, the main effect of pricing carbon (directly through a tax or indirectly through emissions trading and regulations) will be to increase the prices of essential products for which there are no alternatives — especially food, transportation and housing. Workers and farmers, already hit by declining real incomes, will have to tighten their belts until those magical new products arrive, if they ever do.
As for corporate polluters, it’s hard to believe that anyone who follows the business news can still claim that markets and “price signals” are an efficient way to get good results. Yet such claims are still made: Hot Air, a recent book co-written by two leading Canadian economists who favour putting a price on carbon, offers a typical justification:
“Using market-based policies is the best way of accomplishing this objective, because taxes and emissions trading schemes send the same financial signals to all firms and individuals, encouraging them to seek the lowest-cost actions that lead in turn to lower overall costs for society.”
Two points need to be stressed.
First, to these economists, “lower overall costs for society” doesn’t mean fewer droughts, floods and giant storms, less damage to crops, or fewer climate refugees and climate-related catastrophes. It only means lower spending by capitalists. For them, the cheapest solution is the “most efficient,” even if it increases human misery.
Second, and more important, the economists’ unstated assumption is that the “lowest-cost actions” will reduce emissions. But real-world experience shows that long before they change their business methods, corporations will opt for a very different set of “lowest-cost actions,” including:
- Lobbying and economic blackmail. Whoever wins the election will be subject to intense pressure from the major emitters, demanding special treatment, arguing for delays and exemptions, and threatening layoffs and shutdowns if their interests aren’t given priority. Past experience says they’ll succeed in watering down legislation, if they don’t block it completely.
- Cheating and lying. A recent study found that the methods used by Canadian and U.S. oil refineries to calculate greenhouse gas emissions dramatically understate what’s really happening. Actual measurement at an Alberta refinery found that it released 19 times more benzene, 15 times more hydrocarbons, and nine times more methane, than it reported to Environment Canada. The oil industry’s response? Rather than changing its emissions measurement procedures, it demanded that the government suppress the tables showing the dramatic difference between reported and actual emissions.
The plans proposed by Canadian political parties all rely on self-reporting by the polluters, for whom lying is often the lowest-cost option. Even if they are caught, investigations, trials and appeals can win them years of delays.
- Cutting wages. The tried and tested corporate method of dealing with higher costs is to shift the burden onto workers, directly through pay cuts and longer hours, or indirectly by outsourcing work to countries where wages are lower.
- Gaming the system. Every corporation employs teams of lawyers and accountants to figure out how to get around regulations and avoid paying taxes. These scam artists are undoubtedly already working on legal ways to minimize the impact of any emissions policy — without actually reducing emissions, of course.
- Passing the costs on to consumers. If the increased costs imposed by carbon taxes or trading can’t be evaded, corporations will increase prices. The only barrier to such increases is competition, and the biggest polluters have very few competitors.
- Shifting investments elsewhere. Capitalists don’t just need profits — they need a rate of profit that matches or exceeds the rate they can make elsewhere. If the carbon rules cut into their profits, they will move their money elsewhere, to other industries or other countries. If that happens, just watch how fast the politicians back down!
In short, big industry will do everything in its power to block or minimize any restrictions on business-as-usual — and they will do their utmost to avoid or delay complying with laws that do get passed. Pro-capitalist economic models never take those factors into account.
But that isn’t the biggest problem with the programs of the opposition parties.
Even if their programs are implemented exactly as proposed, and even if there is 100% compliance, and even if the regulations and “price signals” produce the promised results, emissions will not come down fast enough to head off dangerous climate changes.
The most aggressive “put a price on carbon” plan proposed in the influential book Hot Air will, the authors say, reduce emissions to 50% below the 2010 level, by 2050. That’s far less than what’s needed — but none of these programs is nearly that aggressive.
Declare a climate emergency!
The starting point for any serious effort to combat climate change must be recognition that this is an emergency. The world’s leading climate scientist, James Hansen, head of NASA’s Goddard Institute, says that unless decisive action is taken quickly, “it will become impractical to constrain atmospheric carbon dioxide, the greenhouse gas produced in burning fossil fuels, to a level that prevents the climate system from passing tipping points that lead to disastrous climate changes that spiral dynamically out of humanity’s control.”
A growing number of climate scientists believe that the level of carbon dioxide in the atmosphere has already passed the safe level. Modest targets such as reducing emissions to 25%-40% below 1990 levels by 2020 are not just inadequate — they are, Hansen says, “a recipe for global disaster.”
A government that really wanted to deal with climate change would declare a Climate Emergency. It would learn from the experience of World War II, when Ottawa forced through a radical transformation of the entire economy in a few months, with no lost jobs or pay cuts.
Internationally, it would campaign for a tough global climate treaty with teeth, focusing on cutting rich industrial nations’ emissions and transferring clean technology to the Global South.
Regardless of what happens in international negotiations, Canada must unilaterally adopt a goal of a 60% overall emissions reduction by 2020, and a 90% reduction by 2030. Those reductions can be achieved through government measures such as these:
- Set hard, rapidly declining ceilings on emissions produced by the largest companies. Expropriate any company that doesn’t comply.
- Put all power industries under public ownership and democratic control. Begin phasing out coal-fired plants immediately and stop building new ones. Invest heavily in non-fossil fuel sources such as solar, wind, tidal and geothermal.
- Stop all new development in the Tar Sands and rapidly phase out existing operations, including restoring of the land as closely as possible to its previous condition.
- Redirect all military spending and the federal budget surplus into public energy-saving projects such as expanding mass transit and retrofitting homes and office buildings. Former tar sands workers and redeployed soldiers can play key roles in this effort.
- Retool auto plants to focus on building mass transit, wind turbines and other green technologies.
- Expand and upgrade transit systems so that all urban residents can use them easily. Make all public transit free.
The climate crisis will not respond to modest goals and incremental tinkering — what’s needed are emergency measures to drive current greenhouse gas emissions towards zero as rapidly as possible. Unfortunately, in this election, modest goals and incremental tinkering are the best that Canadian politicians are offering. There is no sign that any party recognizes how serious the problem actually is, let alone that emergency action is needed.
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- Ian Angus: Confronting the Climate Change Crisis: An Ecosocialist Perspective.
- Ian Angus: How to Avoid Action on Climate Change: The Fine Art of Greenwash in Canadian Politics.
Articles on “putting a price on carbon” (HTML)
- Ian Angus. Carbon Pricing Problem: It Doesn’t Work.
- Ian Angus. Carbon Taxes: Nudging the Free Market Fairy.
- Ian Angus. Stephane Dion’s Green Tax Hoax.
- Kevin Smith. The Obscenity of Carbon Trading.
- David Spratt (Interview). Climate Change: Market-Based Policies Will Not Work.
- Daniel Tanuro. Carbon Trading: An Ecosocialist Critique.
- Essential Information on Carbon Trading