Angry in the Great White North

David Suzuki is not impressed with the NDP because of their unwillingness to tax Canadians into poverty:

Famed environmentalist David Suzuki has strongly backed Liberal leader Stephane Dion's emerging carbon tax plan and slammed the NDP and Conservatives.

After hearing the NDP's criticism of Dion's plan, Suzuki said: "I'm really shocked with the NDP with this. I thought that they had a very progressive environmental outlook."

There's progressive, and then there is being a patsy.  The NDP doesn't want Canadians to be patsies:

NDP MP Peggy Nash said the NDP's environment plan is not revenue neutral. She said her party wants a system where polluters pay and the money is put into "green solutions."

OK, well, that's not much better, because the cost of the carbon tax charged to industry will just be passed down to the consumer anyway.

But David Suzuki is most disappointed with Canadians themselves.  Here we are, facing the opportunity to save the planet by paying higher energy bills (yeah, the connection is not immediately obvious to me either), and we're complaining:

Suzuki mentioned that Swedes pay about carbon tax of $150 a tonne, while British Columbians are "yelling and screaming over a $10 tax."

B.C introduced a carbon tax in February.

If David Suzuki wants to hear real yelling and screaming, he should see what happens if Stephane Dion was to emulate the Swedes.

You see, in Sweden, industries are exempt from the carbon tax.  Only individuals have to pay the full carbon tax:

Previous to the carbon tax, Sweden had attempted to limit energy use, and therefore carbon emissions, by directly taxing the sale of oil and electricity. Sweden's energy taxes were already some of the highest in Europe. For example, gasoline taxes comprised 68.5% of the price of gasoline. Yet, the government had no desire to lower the overall taxation level.

When designing the new tax system, officials recognized two distinct classes of energy users: industry and consumers. Both of these user classes were considered unique in the ways in which they used fossil fuels and in their reaction to increased environmental regulation and taxation. As a result, these two groups were given separate provisions within the new tax regime. It was noted that a large percentage of fossil fuels consumed by consumers were used for home heating and transportation. In addition, policy makers noted that most consumers positively viewed environmental regulation and recognized the need for high tax levels. Industry energy users were much different.

Industry users were much more likely to use fossil fuels for the production of goods. As a result, policy makers were unwilling to greatly increase their taxes. Industry users were also much more opposed to increased government regulation and increased tax levels. They stated that additional regulations and taxes would hurt their competitiveness abroad. Many policy makers noted the growth of the European Union and believed that Swedish regulations on industry should mimic those regulations found abroad.

On January 1, 1991, the Swedish Carbon Tax was enacted. This new tax regime placed a tax of .25 SEK/kg ($100 per ton) on the use of oil, coal, natural gas, liquefied petroleum gas, petrol, and aviation fuel used in domestic travel. Excepted from these new taxes were ethanol/methane/biofuels, peat, and waste. But this tax was not uniform. For while consumer users were responsible for paying the full tax, industry users were only required to pay 50% of the tax due to "competitive reasons." In 1993, due to protest by many Swedish industries, industrial users were granted further relief. The industry taxation rate was lowered to just 25% of the normal rate. Additionally, certain high energy using industries such as commercial horticulture, mining, manufacturing and the pulp and paper industry were fully exempted from these new taxes. In 1997 the tax code was revised again and the industry rate was returned to 50% and the overall tax on carbon emissions was raised to .365 SEK/kg ($150 per ton) of CO2 released. Yet, the practice of exempting certain industries from the tax was continued.

So if industry complains loudly enough, they get an exemption.  If they threaten to move operations to another country, they get an exemption.  If the tax threatened their profits by making their products less competitive, they get an exemption.

Meanwhile, consumers are responsible for paying the full tax.

This is what David Suzuki wants for Canada?

Imagine if the pulp and paper industry -- you know, the guys who make stuff from trees that have been cut down -- didn't have to pay the carbon tax.  Real environmentalists would go ballistic.  But David Suzuki is impressed with the Swedes.

It makes me wonder if David Suzuki is truly an environmentalist, or if he just hates people.  Punish the people for overpopulating the planet -- that's the real goal.

But I guess what really matters are results.  The Swedes have been labouring under this tilted tax regime since 1991.  Obviously, David Suzuki is still kvetching about global warming, so the Swedish carbon tax did not save the world.

Did the Swedish carbon tax achieve anything?

Yet, compared to the original goals of Swedish policy makers, the overall results of the carbon tax were mixed. Despite the lower emission levels, many policy makers had been looking for more dramatic reductions. Subsequent studies by both the Swedish government and independent economists have identified three major reasons why the Swedish carbon tax resulted in only small gains. These include the fact that the overall tax level for industry users of fossil fuels was reduced as a result of the 1991 carbon tax. They also have noted that since energy costs represented only a relatively small percentage of a firms' total costs, many industrialists were slow to modify or upgrade their existing plants as a result of the new taxes. Economists also found that since only a small percentage (33%) of the energy supplied to industry was generated by fossil fuels, the potential reductions in carbon emissions resulting from the tax were limited. Swedish policymakers were also disappointed by the lack of industrial innovation resulting from the carbon tax. Many had believed that numerous carbon-reducing innovations would result from this new tax, but no major innovations were witnessed.

One of the greatest failures of the carbon tax resulted from the tax exemption on the use of waste fuels. Previous to the carbon tax, most industrial waste byproducts were sent to hazardous waste dumps or recycled. However, as a result of the carbon tax and its tax exemption on the use of waste fuels, many oil-based byproducts began to be used by local heating districts for heating purposes. This resulted in large amounts of pollution. Only in 1997 was this practice halted by the revision of the tax code.

Another failure of the new Swedish tax code was its inability to truly tax carbon emissions. For while most fuels containing carbon were taxed, this tax did not reflect the actual level of carbon emitted from these fuels. For example, low emission diesel fuel and high-emission diesel fuel were both taxed at the same level despite causing different levels of environment damage. Many have criticized the Swedish carbon tax for failing to distinguish between the different fuels and their different environmental effects. One can only wonder about the effects if such a provision had been built into the tax code.

So the Swedish carbon tax was poorly designed and exempted powerful industrial interests.  In the end, the Swedish carbon tax was a failure -- I mean, if you pay $150 per tonne, and this is what you get, then it's a failure, plain and simple.

But despite David Suzuki's apparent admiration for the Swedish approach, the Liberals are not likely to make the same mistakes.  Stephane Dion will likely apply his carbon tax to everyone and everything.