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Energy
Who you gonna call?
By Kevin Potvin
The Liberals propose a carbon tax guaranteed to fail and the NDP propose an election strategy. Meanwhile, the climate hots up another degree . . .
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The punchline to the joke is, No one’s going to notice it anyway, har har!! (Much back-slapping, big fat cigars lit up.)
Now the joke: The biggest public policy controversy to hit the province of British Columbia in the whole seven years of the at-times radical right-wing regime of the Liberals, lead by “no contest”-pleading drunk driver Gordon Campbell, is pushing waves of outrage over the province like a wave tank where they grow with every passing sweep. But the opposition New Democratic Party, at times left-leaning but far more concerned with winning the next election than with winning any influence on any particular policy, is proving barely able to ride the waves of indignation now that there is finally a policy controversy for them to grab on to.
The controversy has erupted over the government’s new carbon tax, a 2¢ per litre tax charged at the gas pumps which began July 1. The tax is unlike most other taxes. It isn’t meant to raise money for any particular cause, for the government has promised proceeds will be returned to citizens. Everyone with an address has already received a $100 cheque last week ahead of any pennies they lost at the pumps. The point of the carbon tax is to price gasoline marginally higher in hopes consumers will purchase marginally less of it. The tax is core to the government’s strategy for responding to public pressure to address the challenge of Co2 emissions-produced climate change.
However, there is a problem. The price of gasoline now moves between $1.40 per litre and $1.45 per litre on any given day, as of this week anyway, a swing far greater than the carbon tax. This promises that the carbon tax will have an effect on purchasing decisions less than the already negligible effect noticed in the twice-as-big swings in prices seen every day.
Yet a bigger problem lies hidden. The government does not dictate the price of gasoline at the pump. The individual gas station owners do that—which is why they sometimes get into price wars with each other. Gas station owners are extremely sensitive to small rises and falls in demand for gas because they are usually under contract to receive a certain volume delivered every week. If conditions allow, they raise their prices. But if sales volumes drop—say because a neighbouring gas station has cut prices—the gas station owner will adjust his price down within the hour to keep the volume of flow at his necessary rate. He will cut as much as 20¢ or more from his posted price if he has to, to induce sales volumes to rise.
So what’s going to happen if the 2¢ per litre carbon tax is successful in cutting demand for gasoline? Gas station owners will cut their prices to restore lost demand—probably by about 2¢ per litre. Because of this dynamic, there will never be a reduction in gasoline purchases due to any carbon tax. The reason the business community in British Columbia has so quietly accepted this new tax—where usually they scream bloody murder at any new tax—is because they know it won’t reduce gasoline purchases one bit, and won’t therefore reduce consumer activity, and won’t therefore affect profitability at all.
The business community’s biggest worry these days is new environmental policies that might affect corporate profitability. Yet they know there must be new environmental policies—they’ve lost and given up on their initial strategy to deny there is climate change afoot, and to deny human activity is to blame. The carbon tax sounds like an environmental policy, yet it won’t affect corporate profitability (on account of it being guaranteed to be an ineffective environmental policy).
Hey, it’s the same old Gordon Campbell. If you think he pulled a Juno-worthy act on his return home from the overnight drunk tank in Maui, check out his “heartfelt” messaging on the necessity for climate change-oriented policies. You knew there had to be some catch if he’s behind it.
But don’t expect this monumental flop to affect his government’s standing in the polls come election next spring. His counterpart in the NDP, Carol James, is proving as tiresome as your average drunk. In an editorial in the Vancouver Sun last week, an opportunity, you might think, to really hammer a message home with so many outraged voters, she fails to even try to explain why the carbon tax is ineffective. Instead, she uses the chance to take the whole thing down to the same old school yard taunting level this province has been subjected to for so long. “The premier’s arrogance is the problem,” she suggests. “He is so obsessed. . . . he is blind. . . . [he] revealed just how out of touch he is. . . . I don’t think he understands—or cares—at all.”
The column doesn’t break from this bizarre pattern. There are a number of ways an intelligent person can communicate to other intelligent people in the space of a few hundred words how the carbon tax fails to achieve its stated goals. James doesn’t bother. She evidently feels it’s more important to smear the personalities on the other side than to engage with citizens in thinking about government and good policy. Maybe it’s what the political scientists say works in politics, but it sure doesn’t work in the environment.
It’s possible we’re witnessing a complete paralytic seizure throughout our whole system of power. There are such events in history, and this is maybe what it looks like up close and day to day.
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The Republic of East Vancouver masthead
The Republic of East Vancouver supports no party, advocates
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