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The Right Carbon Tax for Canada

by John Brian Shannon

“Canadian business needs a fair, transparent, and proportional carbon tax to spur action towards a cleaner environment.”

Which is not the same statement asCanada must punish Canadian industry so the country can meet it’s COP21 emissions targets.”

See the difference?

Unfortunately, in the rush to meet Canada’s global air quality commitments (admirable) the federal government may have leaned more towards ‘action’ on the carbon file rather than ‘smooth implementation’ of the carbon file (forgivable) and now has at least two provincial premiers questioning the mechanics of the federal carbon tax plan.

In the end, both methods would result in Canada’s emissions targets being met, but one way is complimentary while the other is confrontational.

Which of the two ways exampled above would cause you to want to work with the federal government to reach Canada’s international emissions obligations?


No Need to Reinvent the Wheel – Just Fix the Broken Parts and Carry On

Federal Carbon Taxes: Small business always suffer in these scenarios, while large corporations already have multi-million dollar environmental + energy budgets — which means all that’s required for them to meet upgraded emissions targets is a shift in their budget allocations to meet Canada’s new emissions regulations.

Therefore, for polluters emitting less than one megatonne of CO2 annually, such companies shouldn’t pay any carbon tax until they surpass that limit and thenceforth begin to pay a $40. per tonne carbon tax (for example) on any emissions beyond the one megatonne threshold.

Likewise, large companies shouldn’t be required to pay carbon tax until the point in the year is reached where they surpass the one megatonne limit and only then begin to pay $40. per tonne of CO2 (or CO2 equivalent, because not all airborne emissions are of the CO2 variety) on each additional megatonne for the rest of the calendar year.

In this way, Canada’s carbon tax model would be a breeze to implement, a carbon tax that would be small business-friendly, and one that provides an incentive to bigger companies to work toward reducing their emissions over the longer term.


Carbon Taxes Administered by Provinces and Cities

Provincial carbon taxes: Provincial and city carbon taxes should be ‘flow-through’ carbon taxes where 100% of each dollar collected at the transactional level (a point-of-sale tax like a provincial sales tax) is spent on poverty alleviation, or on energy conservation + investment in green energy projects + green energy bonds. As is already done in some Canadian provinces.

Provinces and cities that face serious air quality problems would be thereby empowered by federal legislation to address their unique air pollution issues and be better positioned to help Canada meet its international emissions targets while lowering their healthcare and environmental spending associated with air pollution.


Annual Step-up Carbon Tax

Start with a low carbon tax: If the ‘year one’ federal carbon tax is set at $40. per tonne, the next year could be set at $50. per tonne, and ‘year three’ $60. per tonne, etc., it would allow Canada to continue to meet its emissions goals and to lower environmental and healthcare spending in Canada where a significant proportion of healthcare budgets are devoted to treat respiratory ailments brought-on or worsened by the poor air quality in Canadian cities (and some high land use agricultural areas) and could actually save provincial budgets millions of dollars per year.

If there’s one thing that markets and big business like, it’s a long lead time for new regulations and a ‘carbon-tax-free-zone’ that they can shoot for which will help them lower costs by increasing efficiency (which is closely tied to productivity, ask any economist) and a step-up carbon tax gives them the opportunity to adjust their operations several years ahead of the time when it could begin to get very costly for them.

Hitting Canadian companies with a $220. per tonne carbon tax (which is what Stanford University says is the true environmental and healthcare cost of each tonne of carbon) would prevent companies from attracting the funding required to lower their emissions.

In a perfect world, legislators would slap a $220. per tonne carbon tax on every level of government, each corporation and on citizens and all of them could afford to pay it. Sadly, that isn’t possible. But starting out at $40. per tonne allows companies to begin the process of lowering their emissions without stressing corporate finances.

If you doubt how costly pollution is to the economy, see the landmark study from Harvard Medicine which estimates coal-burning alone costs the U.S. economy between $330 billion and $500 billion per year.


The Need to Address Carbon Pollution

It’s indisputable to any educated person that Canada and every other country needs to address carbon pollution — but ultimately, carbon taxes must be designed to mesh with the overall economy — not entangle it.



Visit The Solutions Project to see how renewable energy can work in your jurisdiction to help citizens live healthier lives, care for the environment, boost the economy and help Canada meet its international air pollution targets.

Images below are courtesy of The Solutions Project

Our 100% Clean Energy Vision for Canada - The Solutions Project. Image 1.

Our 100% Clean Energy Vision for Canada – The Solutions Project. Image 1. Click on image to expand it via your browser tools.

Our 100% Clean Energy Vision for Canada - The Solutions Project. Image 2.

Our 100% Clean Energy Vision for Canada – The Solutions Project. Image 2. Click on image to expand it via your browser tools.

Our 100% Clean Energy Vision for Canada - The Solutions Project. Image 3.

Our 100% Clean Energy Vision for Canada – The Solutions Project. Image 3. Click on image to expand it via your browser tools.

Visit The Solutions Project main webpage here for more information.



Bonus Graphic courtesy of the Canadian Association of Petroleum Producers

 

While the federal government of Canada seeks to meet its international emissions targets, Canadian premiers press for a more business-friendly carbon tax regime.

While the federal government of Canada seeks to meet its international emissions targets, Canadian premiers press for a more business-friendly carbon tax regime. Image courtesy of the Canadian Association of Petroleum Producers. Click on image to expand it in your browser.

The Geopolitics of Renewable Energy

by John Brian Shannon | January 19, 2015

What’s lacking in the world these days is a grand overriding global vision, one that large numbers of people can buy-into.

"What if we don't change at all... and something magical just happens."

The entire world bought-into Perestroika and Glasnost, culminating in the end of the Cold War and the only reason it ended, is those policies appealed to large groups of people worldwide.

The imagination of the global public was captured *and only thereby* did the Cold War end. Ergo, voters put the people into office who shared their dream of ending the Cold War.

Similarly, did South African apartheid end.

Someone created a vision to which many millions of South African and global citizens could buy-into and people voted into office those who would carry out their wishes on the matter.

So many other examples exist; ‘The New Deal (FDR), Victory in WWII (Churchill), the Moon Shot (JFK), civil rights (MLK), Playing the China card (Kissinger), the PC (Steve Jobs / Bill Gates), I could go on at length. But you get my point.

Stifling individual visionaries is non-productive. Yet it seems to be the new norm.

Not all visionaries are perfect, not all visions are inspired, but it was a visionary who created the wheel, not an incrementalist. We can all see the profundity of that vision.

He or she, may not have created the best wheel at the time, but the manifestation of that vision has moved our civilization by orders of magnitude.

Under the umbrella of a grand and popular vision, the will of millions (perhaps billions) of citizens can be galvanized toward a common cause. The Moon shot is a great example of this — but in the absence of a grand overriding vision, civilization eventually falters. Everyone on the planet can be ‘part of the solution’. Unless we bungle it, that is.

Presently, the grand overriding vision is to attack suspected terrorists and to degrade the status of ordinary Muslims in our own, and their own, countries. That’s not a vision. Nor is it wise.

And slamming Vlad Putin in the media is not visionary.

“Demonization of Vladimir Putin is not a policy; it is an alibi for the absence of one.” — Dr. Henry Kissinger

What we need now is a real vision that most everyone can buy-into. We need ‘Larger than Life’ stuff — not this B-movie script stuff.

One script that millions and perhaps billions of people could buy-into, is an accelerated change-up to renewable energy and high fuel economy standards for cars and light trucks.

For example, 50% of all electricity produced in the world by 2020 should be sourced from renewable energy. And a 95 MPGe standard for new vehicle fleets.

Let’s not fool ourselves, doing so would NOT be as difficult as the Moon shot, NOT as difficult as ending the Cold War in practically a matter of months, and NOT as difficult as ending South African apartheid within a handful of years.

Energy consumption by energy type. Image courtesy of EIA

Energy consumption by energy type. Image courtesy of EIA

Still, it would be a grand enough and difficult enough vision to capture the world’s attention and galvanize people towards a unifying and noble cause.

Reaching 50% of our energy needs with renewable energy is a vision and a goal that everyone could feel good about and thereby want to buy-into.

We can take a profound step towards this worthy goal by acting on one of the following choices:

  1. Remove the $600 billion dollars of annual fossil fuel subsidies over 10 years
  2. Dramatically ramp-up renewable energy subsidies to match fossil fuel subsidies
  3. Institute a carbon tax that reflects the actual cost to society of fossil fuel use

Any one of these plans would work.

I favour the (2) option — “Dramatically ramp-up renewable energy subsidies to match fossil fuel subsidies” — with equal subsidy amounts for renewable and non-renewable energy in every year to 2050. To be followed by complete cessation of ALL energy subsidies (renewable and non-renewable) on January 1, 2051 for a truly level energy playing field after that date.

We’d be leaving a cleaner world to our future generations and saving our economies trillions of dollars in environmental costs and healthcare costs.

And all that’s stopping us from that worthy and noble goal is a lack of vision and will.

Carbon dioxide emissions by region. Image courtesy of EIA

Global CO2 emissions by region. Image courtesy of EIA

In 20 years, wouldn’t it be great to look back and say;

‘By replacing fossil fuel use with renewable energy, billions of people are now breathing clean air, enjoying increased lifespan and quality-of-life, and we’ve saved trillions of dollars in carbon/climate mitigation costs.’

And those old enough at the time could say; ‘We built that.’