Getting the Math Right
by Brigitte Alepin
Public finances and tax policy adviser.
- First Posted: Feb 04 2010 18:23 PM
- Updated: over 1 year ago
Canada needs to properly align its emissions reduction target with the U.S.
At the UN Climate Change Conference in Copenhagen last December, it was agreed that countries had until January 31, 2010 to announce their emission reduction targets. And so, on January 30, Environment Minister Jim Prentice released the official Canadian position. It read in part, “Canada's target, a 17-per cent reduction from 2005 levels, is completely aligned with the U.S. target, and is subject to adjustment to remain consistent.”
While probably not ecologically sufficient, this reduction seems to be the best that Canada can do at present. The fact is, it would be economically disastrous for the country to aim for a higher target than the U.S. What more, it reflects the choice of the Canadian people. In a recent poll, 67 per cent of the Canadian electorate said their government should prioritize the economy (the environment came in third place after heath care).
Unfortunately, the government got its math wrong. A joint 17-per cent target for Canada and the U.S. is not in fact equal because, since 2005, emissions have increased in Canada while they have decreased in the U.S. In Canada, the most recent statistics are from 2007 and show an increase of 2 per cent (731 megatons in 2005 compared to 747 megatons in 2007). In the U.S., the most recent statistics are from 2008 and show a decrease of 2 per cent (7182 megatons in 2005 compared to 7052 megatons in 2008).
It is mathematically evident that a joint target of a 17-per cent reduction from 2005 levels does not mean an equal target in North America overall. There is a discrepancy of four per cent in favour of the U.S. This discrepancy is probably even larger now since Canadian emission levels are expected to increase, while levels in the U.S. are likely falling, mainly due to the recession.
It is important to remember that a 1 per cent difference in the target could cost Canadians $700 million dollars annually (one per cent times 718 megatons in 2005 times $100 per ton).
Can we correct this mistake? Yes we can, but since the time for international negotiation on this matter is technically over, Canada has no other choice than to negotiate directly with the U.S.
Comments
Re:Marks
“ Getting the math right means starting with the right assumptions. Where did this $100 a ton come from? Most estimates I have seen suggest a number much smaller than that over the period involved. Furthermore, if done with a carbon tax, the money collected does not vanish, it gets recirculated in tax reductions to individuals. The US is thinking of actually sending cheques out each month to taxpayers - a costly PR ploy. Carbon tax is about moving taxes to carbon producing industries and removing them from other places. This will produce lots of pain for some industries - notably the oil sands. Their propaganda battle to avoid this taxation appears to be working - at least for some people. Like any addiction, the addiction to carbon is hard to shake. Some industries are in denial. Until they admit they have a problem, they won't begin to change their ways. A carbon tax with yearly increments will catch their attention. Until then, expect more articles like this one exaggerating and misrepresenting the problem. These tactics have prevented substantial corrective action in Canada since Kyoto. Had we started back then solving the problems we would have solutions now. Instead we are even more addicted to carbon, including some of the world's worst carbon.
Brent Beach