Bailout is actually more than $700bn

[KrazyHorse]

Again, I agree that exceptions are stupid and due entirely to political considerations. But the arguments against the plan I've seen out of the Conservative camp make me think that they have no intention of doing anything even remotely as smart as the Liberal plan.

[notyoueither]

How is it a good plan to put taxes on an industry with already high cost of production compared to competitors, while not taxing gasoline and at the same time giving consumers tax breaks?

Wouldn't a tax break encourage consumption? Isn't consumption the root of the problem?

The Liberal plan amounted to closing bars early in the name of reducing drunkenness while allowing 24 hour liquor sales at corner stores.

[KrazyHorse]

Originally posted by notyoueither
How is it a good plan to put taxes on an industry with already high cost of production compared to competitors

That high cost of production does not yet contain the externality involved in producing via this method versus other methods. That's a plain fact. If oil sands production is more environmentally damaging than conventional production then any plan which aims to decrease environmental damages needs to discourage the more damaging extraction method in favour of the less damaging method. Whining about how hard it is to make a buck won't make this fact go away.

while not taxing gasoline and at the same time giving consumers tax breaks?

Not taxing gasoline sufficiently is, as already stated, the biggest flaw in the Liberal plan.

Wouldn't a tax break encourage consumption? Isn't consumption the root of the problem?

The tax break being discussed is an INCOME TAX break. If you tax carbon emissions through consumption and production taxes (note that taxing producers has the exact same effect as taxing consumers for the total amount of carbon involved in the production and consumption of the good; this is elementary tax incidence theory) and redistribute the tax income as a lump-sum payment to individuals the net effect is to discourage the consumption of carbon-intensive products.

The only issue in all of this is exports/imports to jurisdictions without a carbon tax. A consistent approach to prevent carbon arbitrage requires that Canadian producers be reimbursed for the carbon taxes they pay while producing and shipping exports to markets without carbon taxes while carbon taxes be charged at the border for imports from markets without carbon taxes. AFAIK this approach is allowed under the trade agreements we currently have. There is enough public knowledge of emissions from various industries in the US (for example) that a pretty good estimate of the right tax charge should be pretty easy to come by (especially since efficient producers would be incentivized to prove that their emissions were lower than assumed).

[notyoueither]

Originally posted by KrazyHorse


That high cost of production does not yet contain the externality involved in producing via this method versus other methods. That's a plain fact. If oil sands production is more environmentally damaging than conventional production then any plan which aims to decrease environmental damages needs to discourage the more damaging extraction method in favour of the less damaging method. Whining about how hard it is to make a buck won't make this fact go away.

Canada will be the only major oil producer doing this.

The oil sands are more expensive to produce from to start with.

What impact do you envision these policies having on the energy industry in Alberta and Saskatchewan if it is a simple tax grab?

Not taxing gasoline sufficiently is, as already stated, the biggest flaw in the Liberal plan.

We can agree on that.

The tax break being discussed is an INCOME TAX break. If you tax carbon emissions through consumption and production taxes (note that taxing producers has the exact same effect as taxing consumers for the total amount of carbon involved in the production and consumption of the good; this is elementary tax incidence theory) and redistribute the tax income as a lump-sum payment to individuals the net effect is to discourage the consumption of carbon-intensive products.

Except the Liberal plan was not to add taxes to most of the population in Ontario and Quebec. All they get is tax breaks at the expense of people and industries in other regions.

The net effect of the Liberal plan would have been reduced oil production in Canada and increased consumption. It's incredibly stupid as a national policy.

The only issue in all of this is exports/imports to jurisdictions without a carbon tax. A consistent approach to prevent carbon arbitrage requires that Canadian producers be reimbursed for the carbon taxes they pay while producing and shipping exports to markets without carbon taxes while carbon taxes be charged at the border for imports from markets without carbon taxes. AFAIK this approach is allowed under the trade agreements we currently have. There is enough public knowledge of emissions from various industries in the US (for example) that a pretty good estimate of the right tax charge should be pretty easy to come by (especially since efficient producers would be incentivized to prove that their emissions were lower than assumed).

I have not heard one word of such a scheme being in the Liberal plan.

[DanS]

On the OP, it should be noted that because of these new tax rules, the FDIC is on the hook for less. I don't know whether it would amount to $140 billion in FDIC spending avoided, but it wouldn't surprise me.

[KrazyHorse]

Originally posted by notyoueither


Canada will be the only major oil producer doing this.

That has absolutely no effect, as I've already explained (export and import tax rules prevent carbon arbitrage)

The oil sands are more expensive to produce from to start with.

What impact do you envision these policies having on the energy industry in Alberta and Saskatchewan if it is a simple tax grab?

Those producers are emitting carbon on a large scale. They emit more carbon per unit output than conventional producers do. Any reasonably efficient incentive plan to reduce carbon emissions will discourage inefficient production methods relative to efficient production. There's no way around that, NYE.

Except the Liberal plan was not to add taxes to most of the population in Ontario and Quebec. All they get is tax breaks at the expense of people and industries in other regions.

a) No. Consumers will be paying more taxes on every good they buy which has carbon emission involved at any point in production or distribution.

b) If you want to reduce carbon then industries and people who use carbon need to get taxed more. Any plan which reduces carbon emissions will incentivize people to live and work in ways and places which are less carbon intensive. Trying to combat this is simply retarded, except:

c) If you want to make things more politically palatable for the West then, as I said, we can concurrently reduce transfer payments. It would be a good idea to reduce these anyway

The net effect of the Liberal plan would have been reduced oil production in Canada and increased consumption. It's incredibly stupid as a national policy.

No, this claim is incredibly stupid and betrays a very shallow understanding of tax incidence.

I have not heard one word of such a scheme being in the Liberal plan.

That's because border treatment was not specified, AFAIK. No reasonable politician would enact this law without proper export/import treatment.

[notyoueither]

Originally posted by KrazyHorse

The oil sands are more expensive to produce from to start with.

What impact do you envision these policies having on the energy industry in Alberta and Saskatchewan if it is a simple tax grab?

Those producers are emitting carbon on a large scale. They emit more carbon per unit output than conventional producers do. Any reasonably efficient incentive plan to reduce carbon emissions will discourage inefficient production methods relative to efficient production. There's no way around that, NYE.

Switching focus is not an option. The oil that is left is mostly in the oil sands.

We either develop them, or we shut down most of the energy industry in Alberta. There's no way around that, KH.

Except the Liberal plan was not to add taxes to most of the population in Ontario and Quebec. All they get is tax breaks at the expense of people and industries in other regions.

a) No. Consumers will be paying more taxes on every good they buy which has carbon emission involved at any point in production or distribution.

b) If you want to reduce carbon then industries and people who use carbon need to get taxed more. Any plan which reduces carbon emissions will incentivize people to live and work in ways and places which are less carbon intensive. Trying to combat this is simply retarded, except:

c) If you want to make things more politically palatable for the West then, as I said, we can concurrently reduce transfer payments. It would be a good idea to reduce these anyway

You seem to be speaking of a plan that you would like, and that would make some sense. That is not the Liberal plan.

The net effect of the Liberal plan would have been reduced oil production in Canada and increased consumption. It's incredibly stupid as a national policy.

No, this claim is incredibly stupid and betrays a very shallow understanding of tax incidence.

I am not the one inventing features of a policy and assuming they are there as they would be in a good policy thus the policy is good.

If it worked the way you wish it worked, it would not be as horrid as it was.

Wish we'd had this discussion during the campaign.

That's because border treatment was not specified, AFAIK. No reasonable politician would enact this law without proper export/import treatment.

You are assuming a lot.

I do not share your faith in the good sense of the federal Liberals when it comes to pillaging the West to win elections in the East.

[KrazyHorse]

Originally posted by notyoueither


Switching focus is not an option. The oil that is left is mostly in the oil sands.

We either develop them, or we shut down most of the energy industry in Alberta. There's no way around that, KH.

If oil sands producers cannot profitably extract oil when the full cost of its extraction is paid then they shouldn't be extracting it.

You seem to be speaking of a plan that you would like, and that would make some sense. That is not the Liberal plan.

Part (a) and (b) are both consequences of the Liberal plan. Part (c) is something that the Conservatives should have proposed instead of simply spreading around a bunch of politically-inspired untruthful rhetoric.

I am not the one inventing features of a policy and assuming they are there as they would be in a good policy thus the policy is good.

I'm not "adding" anything in here. When you tax producers it is the same as taxing consumers. Again, elementary tax incidence theory.

You are assuming a lot.

No, I'm not. Do you really think the Liberals would actually enact a plan which disadvantages, for instance, auto workers in Windsor relative to auto workers in Detroit? Don't be ridiculous. The reason the border treatment wasn't specified during the campaign (probably) was because we export more carbon than we import, so adjusting border treatment properly would mean being able to claim less tax revenue (~20% lower IIRC). This is also why they didn't include a dynamic analysis of the tax effects (reduction in carbon outputs would mean reduction in revenue). The Green Shift was delightfully vague about how border treatment of carbon emissions would work. But when enacting it there is 0 chance they would done something so colossally unpopular as to disadvantage Canadian producers relative to US producers.

[notyoueither]

Originally posted by KrazyHorse


If oil sands producers cannot profitably extract oil when the full cost of its extraction is paid then they shouldn't be extracting it.

Brilliant. Canada should be the only jurisdiction that expects producers to pay an arbitrary surcharge on extraction, and if they can't survive that on top of already higher comparative costs, then they should move elsewhere. That is what they would do. Move elsewhere. Alberta, and Canada, would have bankrolled the expensive development of oilsands technology and then shipped it off to Venezuela and Russia.

Just. Brilliant. Stunningly.

Part (a) and (b) are both consequences of the Liberal plan. Part (c) is something that the Conservatives should have proposed instead of simply spreading around a bunch of politically-inspired untruthful rhetoric.

I am not the one inventing features of a policy and assuming they are there as they would be in a good policy thus the policy is good.

I'm not "adding" anything in here. When you tax producers it is the same as taxing consumers. Again, elementary tax incidence theory.

No, I'm not. Do you really think the Liberals would actually enact a plan which disadvantages, for instance, auto workers in Windsor relative to auto workers in Detroit? Don't be ridiculous. The reason the border treatment wasn't specified during the campaign (probably) was because we export more carbon than we import, so adjusting border treatment properly would mean being able to claim less tax revenue (~20% lower IIRC). This is also why they didn't include a dynamic analysis of the tax effects (reduction in carbon outputs would mean reduction in revenue). The Green Shift was delightfully vague about how border treatment of carbon emissions would work. But when enacting it there is 0 chance they would done something so colossally unpopular as to disadvantage Canadian producers relative to US producers.

Why were Liberals themselves calling the policy stupid?

[notyoueither]

Incidentally, here's Harper's idea.

http://www.ec.gc.ca/doc/virage-corner/2008-03/541_eng.htm

It might be good to at least be familiar with the subjects under discussion.

[Unimatrix11]

Well, maybe they could benefit from the boni given to those who develope ´green-techs´, make it so, and then pay less taxes on carbon emmission than they otherwise would. If that isnt feasable at all, they could still develope the tech in canada and exploit oil-sand in russia (but still pay those taxes, if they wanted to import that oil to canada).

Apparently the situation is changing though, and he, who will not adept, will dissappear... In the long run, internationally, you have two options: Either you price in the CO2 and take the taxes for it yourselves, or the countries you intent to export to will do it for you. Cause surely, we wont take a competition hit, for someone else´s sins.

[chequita guevara]

Originally posted by snoopy369
Nope, progressive. The US has never been a Monarchy, so . . .

The United States is the successor to the English colonies in North America, which was a monarchy.

[chequita guevara]

Originally posted by KrazyHorse
The US is in a far more precarious position when it comes to rising sea levels. Just look at a contour map and compare with a population density map.

Though obviously it will be able to adjust more easily than the Third World.

Do you really want hundreds of millions of Americans migrating to Canada?

[KrazyHorse]

Originally posted by notyoueither


Brilliant. Canada should be the only jurisdiction that expects producers to pay an arbitrary surcharge on extraction, and if they can't survive that on top of already higher comparative costs, then they should move elsewhere. That is what they would do. Move elsewhere. Alberta, and Canada, would have bankrolled the expensive development of oilsands technology and then shipped it off to Venezuela and Russia.

Just. Brilliant. Stunningly.

I have already explained to you that the fact that other producers would not be taxed doesn't make any difference because of the import/export treatment. In Canada imported foreign oil would be subjected to a tariff equivalent to the carbon tax the oil would have been subject to if extracted in Canada using their techniques. Outside Canada neither would be subjected to any carbon tax because exported oil would be granted an export subsidy equivalent to the carbon tax paid in the process of extracting that oil. Inside Canada foreign oil would still enjoy an advantage because conventional oil is less carbon-intensive than oil sands oil. There's nothing to be done about that, NYE. Whining about this is just whining about wanting to extract rents as an established industry. I have no patience for that type of complaint.

Why were Liberals themselves calling the policy stupid?

a) Because anything like a carbon tax is a hard sell
b) Because they don't understand tax incidence any better than you do

[KrazyHorse]

Originally posted by Comrade Snuggles


Do you really want hundreds of millions of Americans migrating to Canada?

We'll mine the border.

And there are plenty of areas which aren't subject to rising seal levels in the US. Americans will just have to move inland.