The Carbon Tax: A Day Late and a Dollar Short
The price of oil is going up, up, up, and while there is much speculation about the cause(s), it is wishful thinking to believe that most of the cause is speculation - or that prices will "return to normal." What does this mean for carbon taxes and for our plan of action?
There is an excellent article at theoildrum.com explaining the current (and future) causes of oil prices, with lots of handy graphs:
1) The George W. Bush War Risk Premium: The higher the probability of war with Iran, the higher speculators will bid for oil.
2) Chinese growth, leading to millions more cars per year on the road, and made worse because the Chinese government subsidizes oil.
3) Saudi production is flat while Saudi *consumption* is increasing. Oil-producing nations generally are increasing their consumption, including Canada. This also means that *oil available for export has actually been shrinking.*
4) Production declines: All major producers except Russia are showing declining production. Note that oil production in Mexico is in steep decline and also that oil is the main source of exports and tax income. This is a recipe for 'social unrest.'
Overall, an excellent and very helpful article. The conclusion is roughly this:
It's simple really: price will go high enough for the pain to translate into lower oil use in price-sensitive countries, the list of which is topped by the US, where consumption is high, oil price variations are not dampened by massive taxes (prices going from $3.50 to $4 is more painful than prices going from $8.50 to $9).
What this means is that, really, it's a bit late to be implementing carbon taxes on oil, because oil price increases are going to take care of consumption very quickly. Coal, on the other hand, will kill us quickly if we don't plan around it.
What we should be doing is creating a plan to save civilisation, because what we have built will not survive big oil price increases. The whole Wal-Mart-in-suburbia model of consumption that we have structured much of our society around requires a cheap liquid fuel like oil. There will be great pressure to find a substitute, and one is available: coal gasification. Just as there is great resistance to a carbon tax now from people who should know better (the NDP and the northern Premiers; I think both are simply making a cheap and deceptive play for votes), there will be great pressure to turn coal into gas and oil. Doing so would be the end of the world, literally. Not doing so will be the end of civilisation as we know it.
We are stuck between a rock and hard place; what do we do about it? We need a massive, rapid conversion to a carbon-free economy within four years. This is based on two things:
* Science: Top scientists are telling us we have until 2015 to begin reducing emissions, or we will pass tipping points to runaway global warming.
* Dollars: The price of oil is going to continue to increase, and that will bankrupt our society very quickly.
To fix both problems, we need to do the following very, very quickly:
* Rebuild transportation infrastructure as quickly as we can - streetcars, railroads, high-speed rail; end all subsidies to air travel and highways
* Change building codes so that all new and renovation construction is carbon-neutral or better; this means homes get their energy from the sun, wind, geothermal, and so on, and are so well insulated that this energy is minimal
* Change agricultural practices so that our soils are again sequestering carbon and do not require petroleum inputs; this includes going local, to reduce transportation costs and emissions
* Shut down all coal mines and power plants; replace that energy source with solar and wind
* Pioneer alternative manufacturing methods that are restorative (i.e. improve the environment) and that use minimal energy
The government's role in this is primarily to set the boundaries (laws, regulations), to gather and disseminate working examples from around the world, and to fund research and education, so that displaced people (eg: coal and tar sands miners) find new and better careers.
http://www.theoildrum.com/node/4224
Brian Gordon
Nominated Candidate, Esquimalt-Juan de Fuca
Green Party of Canada
Trained Presenter
An Inconvenient Truth
People - Planet - Prosperity
The New Green Economy
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Commentaires
Shift Difficulties
This idea that a shift to carbon light way of life will be so painful is a litle bit of exaggeration i think. I don't own a car and can walk everywhere. I live a very full life where I can access everything I want through walking. The worst yet since moving to Truro, NS a month ago was that I had to walk about 2km to buy a universla remote for my DVD. This was a bit of a treck, but so what? The occasional treck is not a bad thing. This is the first time I have not been able to ghet what i need withion walking distance. The same is true for other people in my Town and in most cities. It is simply more convienent at the moment to access things by car. the shift to a car light lifestyle is not some mopnsterous task, it is simply a very plausible change. Of course, all changes even effective and benifical ones are somewhat uncomfortable.
As for the products we consume, there are fairly simple ways to scale back at a small level on the things we need from far away. And many of the things we get from far way are not necessities. Sure some of us enjoy big tvs, but our quality of life would not be severly reduced by not having easy access to new ones.
What we have to do is accept that this is a time of change and start embracing that. For inspiration one need look no furthjer than two generations back to my Grandfathers generation. People of this generation, from immigration, drastic changes in technology and changes in society experienced incredible changes. Many of them confronted these, and the hardships of this time with incredible grace and determination. I don't feel that our current situation is that unheard of. The difference is just that we have a had period of great comfort for over 40 years now.
I think people will not form a conscencous to act until they see the consequences and options of the current system tightening. Global Warming, granted, is a much different issue, in that it can't be seen comming in an average person's day to day life. I think dispersion of the facts is key here, as I assume you are doing Gordon.
Good luck.
Joel Robitaille
p.s. the views expressed here are mine and do not necessarily represent those of the Green Party of Canada
Carbon tax and high gas prices are economically orthogonal
You allude to this when you say "Coal, on the other hand, will kill us quickly if we don't plan around it." This is precisely the point -- carbon emissions are currently an externality. The (theoretically) most economically sound way to address that is to tax the externality; there may be practical problems with that theory including non-price barriers to increasing efficiency, so that needs to be addressed with aggressive efficiency programs, and public education and job training.
Regardless of the supply-demand equilibrium price of oil, and regardless of what's putting it there, in an economically ideal world there'd be an equal price on all forms of carbon dioxide output that achieved one of two goals – it either needs to be high enough to drive carbon emissions down to a sustainable level, or the revenue from it needs to be spent on driving down carbon emissions to a sustainable level.
There's good reason to tax oil even if you think prices are high enough to drive CO2 down. One is that if you decide not to, but tax coal, then you'll just further drive up the price of oil anyway as some marginal uses of coal switch to oil. There's good reason to think that the incidence of the tax will fall mostly on producers, too. http://en.wikipedia.org/wiki/Tax_incidence
-Rob
These are my opinions and not necessarily those of the GPC.