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Too Cheap to Meter Vis-à-vis Carbon Pricing


In a 1954 address to science writers, Atomic Energy Commission Chairman Lewis Strauss famously noted, “Our children will enjoy in their homes electrical energy too cheap to meter.”

Donald Hintz, Chairman of the Nuclear Energy Institute, remarked in 2003, the nuclear industry had been “plagued since its earliest days by Strauss’ quote, but cheap energy is a praiseworthy goal antithetical to high tariffs on fuel.

The late Richard Smalley, 1996 Nobel Prize winner in Chemistry, lectured that the top ten problems of the world, where, energy, water, food, environment, poverty, terrorism and war, disease, education, democracy, and population.

How is it advisable to penalize these things that are vital to humanity?

Especially since energy is the solution to the next nine problems on Smalley’s list.

The economic theory behind carbon pricing is easy enough to understand. Greenhouse gases are detrimental to the environment and are not priced by any market. These emissions, which are the consequence of burning fossil fuels, can, in theory, be reduced by putting a price on carbon.

Canada, however, is a prime example of the theory breaking down in practice.

The Government of Canada is trying to impose a country-wide carbon price for large industrial facilities, so they can reduce their emissions while limiting the potential impacts on their international competitiveness. The system is designed to reward facilities with efficient operations and support clean innovation and is supposed to be revenue neutral.

The overall cost of the policy is theoretically, or at least advertised as nil.

The man likely to lead the province of Alberta, the energy capital of the country, the election will be May 31, 2019, however, intends to scrap the carbon tax as his first action if elected premier and would require future governments wishing to reintroduce a carbon tax to put the question to Alberta residents in a referendum.

The likely leader of the province of Ontario, Canada’s most populous province, which will hold a provincial election three months from now, has been clear as well that he opposes a carbon tax and won’t allow one in his province.

As one conservative-leaning political columnist recently put it, the political consensus for a carbon tax has gone but the Liberals stay on course.

The federal government’s problem is the widely held suspicion that its real reason for a carbon tax is to fund other bloated policies, such as the recently revealed contract to mine personal information from Facebook to motivate or manipulate voters. And the sentiment that public money is being spent unwisely is shared in the provinces, including British Columbia that was cited by an academic study by the Nicholas Institute for Environmental Policy Solutions at Duke University as having textbook carbon policy but where the provincial carbon tax is being diverted to tax credits for preferred groups, such as filmmakers and for interactive digital media; again for propaganda. And where the province’s newly elected government plans to use its carbon tax windfall to “create jobs, benefit communities and reduce climate pollution.”

Reducing climate pollution should be the first and only goal of a carbon tax and in this regard, Canada is falling far short of its Paris commitments. In its 2017 filing to the United Nations Framework Convention on Climate Change, Environment Canada says it expects total GHG emissions to fall to 583 megatonnes (Mt) by 2030. One-third less than the 2015 levels 700 Mt but still 66Mt short of its commitment.

The report offers no specifics on how Canada can make up the shortfall let alone the one-third reduction it has committed to. And as a retired senior manager with one of Canada’s largest energy companies recently, unkindly, put it, the minister’s bafflegab fails to counter that GHG targets keep being missed.

Ottawa has floated the idea of buying costly international carbon credits to meet its international targets but layering these onto the $2.65 billion it is delivering to developing countries to help them transition to low-carbon, climate resilient, economies is increasingly repugnant to a large segment of the population. Particularly when, as the Chief Economist with the Alberta Treasury Board points out, thousands of energy jobs have been lost due to the downturn in Alberta’s energy sector and are gone for good. So how is the province going to service its $45 billion debt, which is pretty much all its citizens have to show for the province’s foray into the energy sector.

The need for energy is growing, as is the need for the solutions it provides but putting a price on carbon simply deprives Albertans, as well as 99% of the global population.

Another conservative political columnist recently claims, “we should be doing a lot, on many fronts, to develop the breakthrough technologies that will really make a difference. Forking over billions for government to use however they like does not strike me as part of the solution.”

When breakthrough technologies are presented to the government, ersatz environmentalists, philanthropists or naked capitalists, however, on a platter and are ignored, the result is the entire rationale and legitimacy of climate policy is eroded. Instead, fossil fuels continue to be subsidized to a tune of $5.6 trillion per year, while the lowest cost renewable energy, that reduces CO2 emissions, removes surface heat, reduces sea level rise, pro-actively removes ocean/atmospheric CO2 and reduces ocean acidity flies under the radar of collective consciousness.

With apologies to Jack Nicholson, the whole damn flock seems to have flown over the cuckoo’s nest.

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