WHY THE GREEN PARTY CARBON PRICING PLAN MAKES NO SENSE

Peter Bevan Baker

In a recent (August 28, 2018) article published on his Leader’s Blog titled “Carbon Pricing Leadership” – which appeared the same day in the Guardian under the title “A Price on Carbon“, Peter Bevan-Baker states:

It may not be “strategic” but I prefer to be honest with voters.  I have great confidence that Islanders, who live in one of the provinces most susceptible to the effects of climate change, and with a long history of attachment to this special place, will take the time to grasp why we have to act decisively. In fact, I’m willing to bet my political future on it.

If Rex Murphy’s analysis of carbon taxes presented in a recent article he published in the National Post titled “The Green Energy Act is Dead: Let that be a Warning to Green Politicians,” is correct, then Peter Bevan-Baker may very well be doing exactly that – betting his political future on his commitment to imposing a carbon tax:

When the people got to judge their glorious green future in an election, the Liberals were transmuted into a rump. If any politician wants to see how greenism and the famous equation of federal Environment Minister Catherine McKenna works out in the real world (“the environment and the economy go hand in hand”) check out Ontario. Note those Liberal numbers, and note well too, that a Mr. Doug Ford “I am become Destroyer of Carbon Taxes” is Premier.

When I recently (September 19, 2018) suggested in a Facebook Post that the Green Party’s leader may not have anything close to “unanimous” support for implementing a Carbon Tax within his own party saying…

From what I’m hearing, Peter Bevan-Baker’s personal commitment to the imposition of a carbon tax on Islanders (no matter what) has not only upset many within the Green Party, but seriously calls into question whether the Green Party can itself operate in a truly democratic manner – where issues are allowed to be decided by the majority vote of the Party members rather than the “this issue is not up for discussion” position of the leader.

…. a person comment asking the following question (and “tagging” Peter) …..

Has there been a release of information – that would help share insight as to the proposed plan of constructing an: Island Made – Carbon Tax Fund/Offset – Initiative Plan…Available for us to review and consider?

…Peter Bevan-Baker replied saying: “Coming imminently – watch media over next 48 hours.”

The following day (September 20, 2018) the Green Party posted that plan (with Carbon Pricing Plan Summary; Carbon Pricing Plan Background; and Carbon Pricing Plan FAQ supporting documents) on the Office of the Third Party Website.

After carefully reviewing the information in this plan, I am at a complete loss to understand how it makes any sense – like the critics (and there are many) I  just can’t  understand how such a carbon tax will achieve the aim the Green Party says it will achieve, e.g., reduce greenhouse gases (GHGs) by encouraging Islanders to “alter” their behaviour and lower their use of carbon fuels.   Nor do I see how the claims made by the Green Party regarding the “neutral pricing” nature of the plan make any sense, nor are those claims supported with intelligent arguments, or verified with any hard data.  So I want to treat each of these two issues separately in this short blog.

Will a Carbon Tax reduce Greenhouse Gas use in PEI?

The Green Party carbon pricing plan will be “revenue neutral,” which means no money generated from the carbon tax to be imposed on carbon fuels will go to pay for any energy efficiency programs or new “carbon friendly” alternatives….everything collected will be returned to Islanders through a quarterly “dividend” system.

So the question that obviously presents itself is: “If a tax is going to be collected from Islanders based on their use of carbon-producing gases, and the full amount of that tax revenue is going to be given back to Islanders, why bother collecting that tax at all?”

The Green Party’s answer is: “to modify behaviour and encourage Islanders to use less fossil fuel.”  As stated in the Carbon Pricing Plan Summary,

“The higher cost of carbon would encourage people to spend less on fuels, while the Dividend would offset the impact of these higher costs.”

But think about that for a moment. If the dividend offsets the impact of the higher costs, where’s the incentive to “spend less on fuels”?

In the Green Party FAQ, we read:

How does a carbon price reduce emissions?

It changes behaviour. Prices influence behaviour, and by placing a price on carbon emissions, individuals and businesses are given an incentive to reduce their emissions to save money.

The vast majority of Islanders – especially poor and struggling Islanders, of which there are many – are likely already spending as little on fuels as they possibly can.  It’s unlikely that Islanders are producing a lot of GHGs from the frivolous or easily dispensable use of carbon fuels…so how will Islanders be able to reduce their use of these fuels which they are dependent upon to get to work, grocery stores, etc., or heat their homes… without suffering as a result of those reductions?  Is the Green Party carbon pricing plan going to encourage Islanders to be cold (or a little colder) in the winter time?  Or to fake being sick a little more frequently so they don’t have to drive to work as often?

A modest annual rebate divided up quarterly is not going to empower Islanders who are already poor and struggling just to get by from month to month to buy expensive carbon-reducing technologies, such as heat pumps for their homes or electric and/or hybrid vehicles.

The operating assumption in the Green Party’s calculations “costing” out the plan and determining how dividends will be disbursed seems untenable to me: i.e., “the poorer you are, the less GHG you produce.” What’s the scientific (or even “logical”) basis for that assumption? There is no hard evidence presented to back up that assumption – expressed in the following graph presented by the Green Party:

Green Party Carbon Use and Dividend Chart

It says that “calculations” are based on studies by Dobson and Winter – but I’ve reviewed those studies, and I don’t see the connections between what is said about Alberta and what happens on PEI.

Perhaps I’m missing something – and maybe someone within the Green Party can explain how their assumptions makes sense – but the Islander who makes less than $30,000 still has to drive to work every day and heat his or her home in the winter, just like the person earning between $30,000 – $50,000 a year. In fact, it’s likely the poorer the person, the less “energy efficient” the car and furnace, and the more gas burned and carbon emissions produced with both car and house, yet the Green Party claims that if you make under $30,000 you spend roughly $300 and if you make between $30,000 and $50,000 you spend nearly $800 per year. I don’t get it.

Will the Green Party Carbon Tax only cost 3,000 Islanders anything?

I believe the claims being made by the Green Party that the vast majority of Islanders – everyone except about 3,000 Islanders, after you crunch the numbers – will either receive as much back with their quarterly dividend to completely “offset” the additional costs they pay for gas and home-heating fuel with a carbon tax are wildly exaggerated and have no real basis in fact. On the Green Party Facebook page it states:

“Island households would receive a quarterly cheque tied to their income rather than their carbon footprint. Households in the four lowest income quintiles will receive a dividend greater than their average household carbon cost.”

[Editorial Update:  Since posting this article a couple of hours ago I’ve had a respectful and lively exchange with a Green Party candidate who has raised some valid concerns, which have, in fact, further clarified what I believe to be an embedded incongruency in the Green Party Carbon Pricing Plan.  It was pointed out to me that despite my using the chart from the Green Party’s data using “household data” from StatsCan, and also citing a statement from the Green Party mentioning “household” income data from StatsCan, I then proceeded to talk about the income levels of “individuals” rather than households. 

My reason for doing so is because I understood that the Green Party plan will be calculating and processing “individual” dividends based on “Income tax” data, not StatsCan household data, and the only way to practically ‘categorize’ or place Islanders within one of the five quintiles presented by the Green Party as the method for determining whether “individual” dividends will be provided, is through a calculation based on “individual” salary levels using personal income tax returns. I assumed that despite discussing household income levels in presenting and justifying the plan, the quintiles will not categorize households, but “individuals,” and roughly only 3,000 individual Islanders – give or take – would fit into the fifth quintile. 

My contention that the Green Party Carbon Pricing Plan doesn’t make sense stands…using household financial data to explain and justify the plan, when individual income data is actually used to administer and deliver the plan, not only represents a very confusing and embedded incongruency, it could be construed as misleading.]

 

If that statement is true, then it means that somewhere between 2,000 – 3,000 Islanders with an income greater than $110,471 will be shouldering the entire cost of the carbon pricing plan, including paying many Islanders some “surplus income” via a Carbon Tax dividend!  I’ll explain how I arrived at that number.

The 2016 federal Census Data provides income profiles of Islanders (using 2015 data) as follows:

2016 Census Data

Putting these numbers into the five “quintiles” created by the Green Party in their Carbon Pricing plan (the categories are only roughly comparable, since the income categories are not exact) shows just how few Islanders will – according to the Green Party – be “paying” out of pocket as a result of the carbon tax:

Green Party Quintilles

For reasons given above, I would suggest that poor and moderately poor Islanders are likely to purchase more – on average – carbon producing fuels, and consequently, pay more carbon tax (quite possibly much more) than the dividend they will receive. Having to pay a further “tax” on top of those purchases will not encourage them to modify their behaviour and purchase less carbon producing fuels, it will just make them suffer a little more as a result of that tax making them a little poorer.

I believe the Green Party’s claim that “Households in the four lowest income quintiles will receive a dividend greater than their average household carbon cost” is both unsupportable with facts and ludicrous in nature.  But just assume that it could be proven accurate….now consider for a minute what that would mean.

If everyone in the first four quintiles were to “make money” with the Green Party’s carbon tax as is claimed, then it makes absolutely no sense to impose a tax on all Islanders only to give it back to them from the carbon tax paid by less than 3,000 of PEI’s richest Islanders!  As explained above, it not only eliminates any expected “incentive” for the majority of Islanders to change behaviour, it offers no substantial means for them to invest in any “GHG-reducing” technologies to actually do so.

It would be a lot less complicated – and far less costly administratively – to simply impose a “green” tax on anyone falling within the Green Party’s highest quintile (between 2,000 – 3,000 Islanders) and then use that money to allow other Islanders to actually purchase the high-priced technology that would allow them to reduce their use of carbon fuels with a targeted grant-funded program from the provincial government.

 

 

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11 Responses to WHY THE GREEN PARTY CARBON PRICING PLAN MAKES NO SENSE

  1. Shirley N Carl Jorgensen says:

    I would like to hear the other side.

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  2. Josh Weale says:

    Hey Kevin, I think your analysis is off (or at least needlessly confusing) given the fact that you are comparing household income (as defined in the Green plan using StatsCan data) with individual income (which you are using in your analysis.) The Third Party graph that you used clearly says “household income,” and it should have been obvious that something was off when you noticed that our “fifth quintile” (20%) of population was made up of only 2-3% of Islanders (using your definition). According to Statscan there are about 60,000 private households on PEI, and our plan estimates that about 12,000 of those households earn a combined $110,000. Hope that clears things up.

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  3. Hey Josh….what’s important to my thinking is how the Green Party plan determines who will get a quarterly dividend….and for that calculation, as far as I can figure, income tax returns will need to be used in the Green Party plan. So regardless of how StatsCan data may have been used to formulate and attempt to justify the carbon pricing plan based on household income data, it will be individual income tax filings that will be used to calculate which (and how many) Islanders fit into the different quintiles in the plan – or at least that’s how I read it – when calculating who gets a rebate. The Green Party Q&A clearly states: “We propose that government create a Carbon Pollution Dividend which would provide every Islander, with the exception of top earners, with a quarterly check (similar to the HST rebate), regardless of their actual carbon cost.” The only way that can happen is by using individual income tax data, not StatsCan Household income survey data, which is not only partial and generic, but “anonymous” (e.g., the privacy of individuals participating in StatsCan surveys is protected and the data they submit voluntarily is not available to provincial governments).

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  4. joshweale says:

    Hey Kevin…the fact remains that you are basing most of your analysis on individual income levels, when the Green Party plan is focused on household income. The graph you cite clearly references household income, and yet all of your analysis (of said graph) refers to individual income. Apples and oranges. At worst it’s misleading, but at best it is simply adding unnecessary confusion to an already complex debate. Not sure what is gained with this approach.

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  5. Shirley N Carl Jorgensen says:

    still wrong

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  6. Don Humphrey says:

    With no disrespect to other commenters, arguing about incomes being individually based or group based seems like economic tail-chasing.
    Carbon ‘pricing’is a tax that will be borne disproportionately by those at the lower end of the income spectrum.
    Those living paychque to paycheque have little choice but to keep driving their present vehicle and just hope their vehicle keeps on going.
    Likewise regarding home energy conservation, a quarterly cash infusion has little guarantee that the money will be spent on a costly fuel conversions or making fuel efficiency renovations.
    Inevitably carbon ‘pricing’ will be a regressive tax whose revenues are likely to be in a not-so-wise manner.

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  7. Warren Biro says:

    These political honchoes that are pushing, pushing and pushing for this “feel good” tax to be imposed are completely out of touch with the lives of most of their constituents. People are sick to death of this constant push from both provincial and federal governments to strip even more money out of the pockets of the common man trying to get by.
    I’ve moved here a little over a year ago from Ontario and I’m here to tell you it was the Liberals taxation schemes (Green Energy), disgusting waste of tax dollars (the Gas Plant fiasco for one) and total disassociation from the reality of the man in the street that put Doug Ford in the provincial driver’s seat. People are fed up.
    One can only hope that there will be a PEI politician sensible enough to do away with all of this nonsense after the coming election and the exit of the current party.

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  8. fromawaysite says:

    Kevin, just recently discovered your blog and recent article on the corruption in the e gaming scam. Having said that , allow me to turn this upside down about Global Warming , now called, Climate Change. Global Warming is world wide tax scam perpetrated by the globalist agenda no different than the War on Terror or the Bail Outs of the Banks in 2008.
    There is Climate Change , absolutely, but not based on the fabrication by the so called, funded climate scientists. The real experts have published their findings for several years now from Astrophysics, Geology, Archeology, Physics and many more linked scientists. One such name comes to mind, Valentina Zharkova . Of course the agenda by the globalists who control the press have suppressed the real scientists while funding the climate experts to push their Carbon Tax Scam.
    The planet Earth has gone through millions of years of Climatic changes not based on carbon emissions but based on the Sun. There is a record of these changes especially confirmed with new solar data not available until 2006 from a solar probe program that was suddenly shut down by the US government when the data was showing contrary evidence.
    The Earth is effected by the activity or the inactivity of sun spots and solar flares. This year alone we have had over 148 days of No Sun Spots. Recorded records and gathered data have showed this cycle repeating itself over and over again with smaller cycles in between these major events.
    The one we are entering now from approximately 2015 to 2055 is called THE GRAND SOLAR MINIMUM. The last one was from 1645 to 1715 AD called THE MAUNDER MINIMUM. As a side note, this is the time period that they burned the most witches claiming they where responsible for crop failures . Interesting the period of the Themes froze over and they would have festivals on the ice.
    So, what have they discovered during these events . Unusual Volcanic activity ( they discovered this by unusual dust samples in ice core samples )
    Extreme drought and crop failure
    Extreme early and late cold leading to crop loss
    Major flooding
    Famine
    Loss of life from disease
    The planet is getting well into this event as it has in recorded history and well before as in this Solar Cycle. It will become more evident if you start to take more attention to the unusual weather changes and crop losses all over the world and the increase of volcanism and earth quake activity.
    As an good link

    look up the u tube blog iceagefarmer.
    Ray

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  9. sdpate956 says:

    Face it Kevin, you’re a flat earth society member and will have a problem with any carbon tax.

    Doug Ford did not win as much as Wynn’s lost.

    Cons spend their time with specious argument against carbon tax – a proven strategy- and any reasonable strategy to save the planet.

    Nero fiddled while Rome burned

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    • I respectfully beg to differ – I am not a flat-earth society member, nor do I subscribe to that theory: It occurred to me that if the earth was flat, cats would have pushed everything over the edge by now.

      If you read my article carefully, you’ll see that I believe we should be moving quickly to eliminate – as rapidly as possible – pollution, greenhouse gases, toxic chemicals, etc. from our environment. I recognize that there is a time and place for carbon taxes, and they can play an important role in influencing behaviour to move trends away from the use of carbon-based energy sources – I just don’t it is the right approach at the present time in PEI, and that there are more proactive strategies which should be vigorously pursued by government. I’ll have more to say about what I believe those strategies should be in coming days.

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