Wednesday, October 15, 2008

RIP theGreen Shift

Of all the political obituaries written last night, the most troubling is not that of a person, but that of a concept.

The Liberal Green Shift, specific inadequacies aside, would have done exactly what economists have been recommending for years. Shift taxes from income to carbon.

The Conservative victory, particularly here in BC where a provincial version of the income-to-carbon tax shift has met public resistance, is likely to convince a generation of politicians in Canada and abroad that an income to carbon tax shift is good policy, but bad politics. It make take years to overcome that judgment.

For now, one can hope that the opposition parties at least push the Conservative minority to install a more politically viable cap-and-trade system.

It would be ironic. Under cap-and-trade, companies are likely to pass some or all of the cost of emissions reduction on to the consumer. Despite the NDP's protestations about making the big polluters not the consumers pay, the net effect on a cap-and-trade system everyday activity will be quite similar to the carbon tax.

The biggest difference? The large bureaucracy and regulatory structure required for reporting, monitoring and management under cap-and-trade. That increase in government bureaucracy is exactly the sort of thing that no Canadian political party wants to support.

1 comment:

Economic Analyst said...
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