Bailout is actually more than $700bn

[Naked Gents Rut]

While KH is right on the economics, I don't understand why he seriously wants a carbon tax in Canada. You guys can make ****loads of money on the oil sands while bearing little of the potential environmental cost. Just do it.

[KrazyHorse]

Originally posted by notyoueither

How do companies with greater distances for transportation recover the higher transport and other costs when they export?

The same way they collect for the GST they pay on the transportation. The transportation is an intermediate input to bringing the goods to market. If properly documented it shouldn't be a problem.

[notyoueither]

Originally posted by KrazyHorse


The same way they collect for the GST they pay on the transportation. The transportation is an intermediate input to bringing the goods to market. If properly documented it shouldn't be a problem.

They'd need to know how many litres of diesel were used for one box on a UPS truck to get to their door and what portion of the load was theirs.

http://www.cbc.ca/news/background/kyoto/carbon-tax.html

Ontario's long-running Fair Tax Commission in the early 1990s took a hard look at carbon taxes and decided against them, arguing they would distort too many key sectors of the economy, manufacturing and transportation in particular. Proponents had argued that shifting hauling from trucks to rail would represent a large-scale energy savings. But the tax commission concluded the savings would be much more limited and that in today's just-in-time economy such a shift could be counterproductive.

Gosh. I agree with the Government of Ontario. I shall have to move if the neighbours find out.

[KrazyHorse]

Originally posted by notyoueither

Exporting companies on the Prairies get extra back at the border due to coal fired electricity and natural gas heat than companies in Quebec that have hydro for power and electric boilers?

Of course! The exporting company in Quebec didn't pay the carbon tax in the first place, so why should it get it back?

By the way, you're now approaching one of the more interesting implications. Exporting companies will prefer to use carbon emitting technologies relative to producers for the domestic market, since their tax payments are rebated. There will be intra-national carbon arbitrage between exporters and domestic producers! This is itself a source of deadweight loss, but it is minor relative to the loss created if we allowed inter-national carbon arbitrage. It is also minor compared to the deadweight loss of only incentivizing intra-industry efficiency gains (industry by industry efficiency standards as per Harper) rather than also incentivizing inter-industry efficiency gains (one price for carbon, as per Dion).

I don't think this can work like the GST.

The GST works because there is a paper trail for inputs and outputs. If you purchase an input for production then you claim the GST paid on that input and are reimbursed (this avoids "cascade taxation" i.e. taxing the same activity multiple times). This is even SIMPLER because there is no need to pay the tax then claim a credit UNLESS you are exporting. You simply pay the tax on whatever piece of the process you supply that emits carbon.

The only people who will need to keep a paper trail are exporters (though in reality it's likely everybody will keep their receipts in case they sell to an exporter in the future)

[notyoueither]

Originally posted by Naked Gents Rut
While KH is right on the economics, I don't understand why he seriously wants a carbon tax in Canada. You guys can make ****loads of money on the oil sands while bearing little of the potential environmental cost. Just do it.

I'm not convinced.

KH's major argument was using taxation to mold public behavior (incentives).

Dion's plan amounted to a massive tax hike for a minority of industries in regions with little political power (had Dion won) moderate increases across the board like for power generation in Ontario and everywhere without strong Hydro, and major tax cuts and rebates to consumers.

All of the incentives were divorced from the problem. Add the fact that Dion's plan left gasoline alone, and we would likely have seen increases in the number of SUVs in major population centres.

[KrazyHorse]

Originally posted by Naked Gents Rut
While KH is right on the economics, I don't understand why he seriously wants a carbon tax in Canada. You guys can make ****loads of money on the oil sands while bearing little of the potential environmental cost. Just do it.

I've already mentioned this option. Saying "We don't have to worry about global warming. Go **** yourselves".

As I said, it's a valid point of view. Should we decide to bear a cost to reduce our carbon output (ANY plan which reduces carbon output necessitates a cost; even the optimal solution of Pigovian tax, i.e. carbon tax) in order to help out people in other countries? I say yes. Some others might disagree with me. This is a moral question, not an economic one (though it may be informed by economic facts).

[notyoueither]

Originally posted by KrazyHorse


Of course! The exporting company in Quebec didn't pay the carbon tax in the first place, so why should it get it back?

By the way, you're now approaching one of the more interesting implications. Exporting companies will prefer to use carbon emitting technologies relative to producers for the domestic market, since their tax payments are rebated. There will be intra-national carbon arbitrage between exporters and domestic producers! This is itself a source of deadweight loss, but it is minor relative to the loss created if we allowed inter-national carbon arbitrage. It is also minor compared to the deadweight loss of only incentivizing intra-industry efficiency gains (industry by industry efficiency standards as per Harper) rather than also incentivizing inter-industry efficiency gains (one price for carbon, as per Dion).

How is it a negative in the long run if Canada not only develops the technology to harvest marginal oil reserves, but also develops the technology to do so cleanly?

You say dead weight a lot. You need to explain it, because I do not see the dead weight. I see a substantial contribution to technology with significant impact on climate change topics if and when exported internationally.

Simply put, if we shelve the oil sands, as many are clamouring for, we will never have any impact on making it better when the world turns to similar resources in Venezuela and elsewhere.

Not all industries are equal. Some of them we need to survive (heat, power) some of them we need to thrive (oil) some of them we need not at all (auto plants making SUVs). Tell me which ones you really want.

[KrazyHorse]

Originally posted by notyoueither


They'd need to know how many litres of diesel were used for one box on a UPS truck to get to their door and what portion of the load was theirs.

Errr....it's pretty straightforward. UPS pays X in taxes to deliver Y pound-miles of goods. Divide X by Y, multiply by number of pound-miles they delivered to you. Also, how much of our export market uses UPS as a major transporter? Most of the transport is done by rail (even simpler to calculate) or in single-company truck (no need to calculate; they have the receipts).

[Naked Gents Rut]

Should we decide to bear a cost to reduce our carbon output (ANY plan which reduces carbon output necessitates a cost; even the optimal solution of Pigovian tax, i.e. carbon tax) in order to help out people in other countries? I say yes.

Don't be a bleeding heart. Do what's best for Canada.

[KrazyHorse]

moderate increases across the board like for power generation in Ontario and everywhere without strong Hydro, and major tax cuts and rebates to consumers

A tax on producers is a tax on consumers. How many times can I say this? THIS IS ELEMENTARY

http://en.wikipedia.org/wiki/Tax_incidence

The key concept is that the tax incidence or tax burden does not depend on where the revenue is collected, but on the price elasticity of demand and price elasticity of supply. For example, a tax on apple farmers might actually be paid by owners of agricultural land or consumers of apples.

[notyoueither]

Originally posted by KrazyHorse


Errr....it's pretty straightforward. UPS pays X in taxes to deliver Y pound-miles of goods. Divide X by Y, multiply by number of pound-miles they delivered to you. Also, how much of our export market uses UPS as a major transporter? Most of the transport is done by rail (even simpler to calculate) or in single-company truck (no need to calculate; they have the receipts).

I have no idea how much is trucked. I suggest that you have none either.

The Government of Ontario might have had a clue though.

[notyoueither]

Originally posted by KrazyHorse

moderate increases across the board like for power generation in Ontario and everywhere without strong Hydro, and major tax cuts and rebates to consumers

A tax on producers is a tax on consumers. How many times can I say this? THIS IS ELEMENTARY

http://en.wikipedia.org/wiki/Tax_incidence

The key concept is that the tax incidence or tax burden does not depend on where the revenue is collected, but on the price elasticity of demand and price elasticity of supply. For example, a tax on apple farmers might actually be paid by owners of agricultural land or consumers of apples.

Not according to the Government of Quebec.

Quebec is going for the direct levy on all non-renewable fossil fuels sold in bulk to retailers. It has asked the Quebec Energy Board to help work out the exact tax rates and perhaps a sliding scale in which home heating oil might be taxed at a greater rate than natural gas, which is less polluting, in order to encourage homeowners to switch.

Trumpeting this as an environmental measure, Quebec says it will be the first province to impose a specific carbon tax and that it expects the oil and gas companies, which have been enjoying huge profits of late, not to pass these added costs along to consumers.

http://www.cbc.ca/news/background/kyoto/carbon-tax.html

Where exactly is Dion from, anyway?

You are not going to sit there and seriously suggest that noone in government ever comes up with bat**** crazy policy are you? Are you?

*looks back at thread*

OK. Nevermind.

[KrazyHorse]

You say dead weight a lot.

That's because it's the important idea here. Deadweight loss is the loss incurred by changing behaviour. The more distortionary a tax or regulatory policy the more deadweight loss there is. There will be a certain amount of deadweight loss associated with any reduction in carbon emissions since by definition we are changing behaviour. The question is what policy minimizes the deadweight loss for a given amount of reduction of carbon emission. Carbon taxes accomplish this.

[KrazyHorse]

Originally posted by notyoueither


Not according to the Government of Quebec.

Quebec is going for the direct levy on all non-renewable fossil fuels sold in bulk to retailers. It has asked the Quebec Energy Board to help work out the exact tax rates and perhaps a sliding scale in which home heating oil might be taxed at a greater rate than natural gas, which is less polluting, in order to encourage homeowners to switch.

Trumpeting this as an environmental measure, Quebec says it will be the first province to impose a specific carbon tax and that it expects the oil and gas companies, which have been enjoying huge profits of late, not to pass these added costs along to consumers.

http://www.cbc.ca/news/background/kyoto/carbon-tax.html

DID YOU JUST CITE THE GOVERNMENT OF QUEBEC ON A TAX POLICY ISSUE?



The fact that politicians often make claims which are retarded from a tax incidence perspective is a commonplace.

[notyoueither]

Originally posted by Naked Gents Rut


Don't be a bleeding heart. Do what's best for Canada.

From your lips to Harper's ear.

Why should we be seriously discussing severely maiming an industry that is currently allowing for Ontario to collect transfer payments?

Central Canadian bull**** aside, there is zero reason Canada would consider serious handicaps to the oil industry. Unless, of course, the people of Ontario and Quebec got their **** together.

In that case we could substitute an Alberta left for a Quebec threatening to leave.