Author Topic: Cap and Trade  (Read 1269 times)

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Offline George Wallace

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Cap and Trade
« on: January 02, 2017, 09:41:05 »
Happy New Year and the arrival of Cap and Trade.  This should prove to be interesting as we follow the examples set by some nations, and already discarded by others.  Where will we be in a year's time?


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Cap and trade catastrophe
Ontario's carbon pricing scheme, which starts Sunday, is a train wreck
BY LORRIE GOLDSTEIN, TORONTO SUN
FIRST POSTED: SATURDAY, DECEMBER 31, 2016 06:50 PM EST | UPDATED: SATURDAY, DECEMBER 31, 2016 04:25 PM EST

Ontario Premier Kathleen Wynne’s cap and trade scheme goes into effect Sunday, Jan. 1. Here are eight major reasons why you should be alarmed.

 

1. Costs appear to be higher than estimated

The Wynne government estimates the initial cost of cap and trade per household will be $156 per year, due to increased costs for gasoline ($8 per month) and natural gas home heating fuel ($5 per month), rising to $285 annually in 2019 in direct and indirect costs. However, its own estimate that it will take in $2 billion annually from cap and trade ($8 billion from 2017 to 2020) suggests the real annual cost to Ontarians will be $400 per household, given that Ontario has about five million households. The Ontario Energy Board says the initial increase in homeowners’ heating bills alone — which won’t be listed as a separate charge — will be $5.68 to $6.70 per month, already up to 34% higher than the government’s claim.

2. No transparency

Unlike a carbon tax, which is visible, cap-and-trade raises the prices of most goods and services, since most consume fossil fuel energy. Businesses pass along their increased costs from having to buy carbon allowances from the government or their competitors, by raising their prices. Since the price of consumer goods is determined by numerous factors, Ontarians will have no way of knowing what they are paying for cap and trade.

3. Severe impact on low-income Ontarians

Cap and trade is essentially a hidden tax on consumption. Since lower income earners, including seniors on fixed incomes, spend a larger proportion of their income on necessities, such as heating their homes in winter, cap and trade will disproportionately impact them in terms of costs. This even though their carbon footprints are relatively small because they consume less, tend to live in apartments as opposed to single family homes, take public transit as opposed to owning cars and do not engage in fossil-fuel intensive activities such as taking foreign vacations.

4. No revenue neutrality

While the government is promising to help Ontarians cope with the higher cost of living cap and trade causes, its scheme will not be revenue neutral, meaning it will not return to the public in the form of tax cuts or grants the $2 billion annually it intends to raise from carbon pricing. Instead of helping all Ontarians to cope with the higher cost of living, the government will pick winners and losers, which governments are notoriously bad at doing.

5. Limited effectiveness

Auditor General Bonnie Lysyk says cap and trade will only reduce Ontario’s industrial greenhouse gas emissions linked to climate change by 3.8 megatonnes annually by 2020, 20% of its 18.7 megatonnes target. The government claims the rest of its target, 14.9 megatonnes or 80%, will be achieved by counting emission reductions in California and Quebec resulting from Ontario’s entry into their cap and trade market in 2018.

6. Double counting emission cuts

Lysyk warns that since there is no agreement between California, Quebec and Ontario about how to report emission cuts under cap and trade, they may be double counted, undermining the credibility of Ontario’s reported cuts. For example, a business in California could sell 100 carbon allowances (each one permitting the bearer to emit one tonne of industrial carbon dioxide emissions or its equivalent) to an Ontario company. California could then record the sale of 100 carbon allowances as having lowered its emissions by 100 tonnes, because they’re being exported to Ontario. Meanwhile, Ontario could record the purchase of the same 100 credits by an Ontario company as having lowered Ontario’s emissions by 100 tonnes, because it lowered California’s emissions.

7. No verification of emission cuts

Ontario businesses emitting greenhouse gases are expected to pay up to $466 million more from 2017 to 2020 to buy carbon allowances from emitters in Quebec and California, which could rise to $2.2 billion by 2030. “Our concern with these payments,” Lysyk said, “is that the government has not adequately studied whether Ontario businesses buying these allowances will actually contribute to additional emissions reductions in Quebec and California.” As a result, “these funds may be leaving the Ontario economy for no purpose other than to help the government claim it has met a target.”

8. Potential misuse of free carbon allowances

The Wynne government is giving out free carbon allowances — essentially free money — to major Ontario industrial emitters because it says it has to protect them from foreign competition in jurisdictions that don’t have carbon pricing. But it has not explained what mechanism it has, if any, to prevent industries that receive free allowances from raising their prices as if they had paid for them, resulting in undeserved, windfall profits, as occurred in Europe’s cap and trade market, the Emissions Trading Scheme.


More on LINK.


Combined with the plans of the Federal Government, this will be an interesting year to see how deep into the pockets of the Middle Class the various Provincial and Federal Governments are going to dig.  It may lead to the destruction of what we think of as a Middle Class.  It makes you wonder if in essence we are now in a modern day Feudal society, where the Government 'robs' from the hard working serfs to pay for its projects and wastefulness?
« Last Edit: January 02, 2017, 09:44:25 by George Wallace »
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Offline ArmyDoc

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Re: Cap and Trade
« Reply #1 on: January 02, 2017, 10:54:16 »
Happy New Year and the arrival of Cap and Trade...Where will we be in a year's time?
We will  have less disposable income!

Offline Flavus101

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Re: Cap and Trade
« Reply #2 on: January 02, 2017, 11:16:42 »
The whole thing is an absolute joke.

The Government has definitely picked up it's creativity in the way it applies taxes though.

Offline Bruce Monkhouse

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Re: Cap and Trade
« Reply #3 on: January 02, 2017, 11:55:08 »
Now I think its exactly like Flavus101 said....." imaginative new way to tax".  But here is a blog I read last night from Alberta with his ideas on why it's a good thing.
[ too long to put the article on here]
https://www.desmog.ca/2017/01/01/five-handy-facts-about-alberta-s-new-carbon-tax
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Offline Flavus101

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Re: Cap and Trade
« Reply #4 on: January 02, 2017, 13:45:23 »
Not withstanding that the Albertan system is different from the one put in place in Ontario (at least from what I understand of the subject).

What bothers me the most are these "subsidies" and "free carbon tokens (or whatever currency they are using)" that can be doled out by the Government to businesses that are deemed worthy (with the usual speech that these are to keep businesses competitive internationally and has nothing to do with trying to win favours). The Government clearly admits that this tax will hurt businesses by this policy, yet the only businesses they care about helping out are the large multi-national corporations.

I would also like to know the costs associated with administering this new tax.

At some point governments around the world are going to have to realize that they cannot stick their fingers into everything that goes on. Unfortunately I do not this will be realized by my generation, perhaps the one after.

Offline Bruce Monkhouse

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Re: Cap and Trade
« Reply #5 on: January 02, 2017, 13:49:24 »
Just saw a proper name for it on FB......Cap and Raid.
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Online Kat Stevens

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Re: Cap and Trade
« Reply #6 on: January 02, 2017, 15:19:47 »
The one thing in the article they didn't mention was the gst on that extra $.05 per litre at the pump. That's kind of a handy way of kicking back to the Feds while still mainting all that lovely lolly will stay in Alberta.  Tax on a tax is just not right, my $.02.
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Offline suffolkowner

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Re: Cap and Trade
« Reply #7 on: January 02, 2017, 19:12:27 »
Happy New Year and the arrival of Cap and Trade.  This should prove to be interesting as we follow the examples set by some nations, and already discarded by others.  Where will we be in a year's time?


Reproduced under the Fair Dealings provisions of the Copyright Act.

More on LINK.


Combined with the plans of the Federal Government, this will be an interesting year to see how deep into the pockets of the Middle Class the various Provincial and Federal Governments are going to dig.  It may lead to the destruction of what we think of as a Middle Class.  It makes you wonder if in essence we are now in a modern day Feudal society, where the Government 'robs' from the hard working serfs to pay for its projects and wastefulness?

cap and trade for carbon seems pretty doubtful to me, more than likely the final nail in Kathleen Wynne's government unless the tories muff it up like the last couple elections which I can unfortunately see with Patrick Brown at the helm. Uhhh better options please.