Tuesday, August 27, 2013

Carbon Advocates Fiddle The Numbers

They can't even decide by how much B.C.'s carbon tax reduced consumption

 VANCOUVER, BC, Aug 24, 2013/ Troy Media/ – When it comes to carbon people, one is put in mind of the aboriginal foundation myth of the world balancing on a turtle. When someone asked what the turtle was balancing on, the answer was “turtles all the way down.”

Carbon people love nothing more than studies proving that somehow a green economy forced by regulation and public money is going to work. But wherever you look – the U.S., Germany, the United Kingdom, where low-carbon advocates have lassoed the public trust – the results are financial disaster. Siemens CEO Peter Loescher just discovered this as he was unceremoniously booted from the energy giant because, after five quarters of his green energy hole, shareholders were sick of losses.

That is because when it comes to the rafts, warehouses, and tanker ships filled with “studies” – all of which taxpayers fund – it is fiddles all the way down. Which means in the real world that we lose, big time.

Kathryn Harrison, a member of B.C.’s vast, well-funded public sector, accused me of errors in a piece I wrote (Carbon taxes a war on the poor) mocking the carbon tax’s revenue neutrality, and so-called forcing of people to drive less, thereby dropping B.C.’s carbon production by 17.4 per cent. As is typical with this mess, figures slide: 18.8 per cent, 12.5 per cent? Depends on how you read the “studies.” Which is easier if you are the kind of analyst they used to call a Kremlinologist.

First of all, the report she cites – the Rivers Schaufele (RS) study – is authored by Nic Rivers, an analyst in Ottawa who consults with Sustainable Prosperity, the outfit making the claim of 17.4 per cent, 12.5 per cent or 18.8 per cent carbon drop. So essentially Harrison is using Rivers’ work as evidence to validate Rivers’ work.

She claims that B.C.’s carbon tax has “salience value,” a statistical exercise typically used in epidemiological research, when controls are ultra-strict. Harrison and her husband, both professors at UBC, have long claimed that salience value is usable in situations where rigid controls are impossible – i.e. human economic behaviour. The RS study depends therefore, almost entirely on a modelling exercise that is far from transparent.

RS’s modelling of B.C.’s per-capita gas demand is based on the assumption that without the tax B.C.’s gas demand would top out and stay at the average annual levels equivalent to the highest single month peak we have realized since 1990. But no matter where you look in the developed world, the demand for gas is dropping.

Further, B.C.’s per-capita gas demand has grown slower than the rest of Canada for more than 20 years. Is it reasonable to assume that, given the impact of the recession, the completion of the Evergreen rapid transit line and the new high downtown parking tax in Vancouver, there would be a large leap to 1990 gas demand? There are all kinds of additional reasons that gas demand dropped post carbon tax, which had zip to do with the tax, none of which were factored into Sustainable Prosperity’s study.

As to revenue neutrality, perhaps I was wrong to conflate the carbon tax with the Pacific Carbon Trust, but as a civilian, I am more concerned with ethics rather than optics, or arbitrary divisions within carbon peoples’ fiefdoms. The reality is that B.C.’s carbon tax shifts tax burdens from large, profitable businesses to the public sector (hospitals and schools), low-income families, and small businesses. This one fact makes it anathema.

Further, according to Aldyen Donnelly, president of GEMCo, the Greenhouse Emissions Management Consortium and no carbon skeptic, “Carbon taxes are before income tax, operating expenses and at least partly deductible from royalties payable by resource extractors, while families pay out of after tax income. When we account for the offsetting reductions in B.C. corporate income tax and royalty revenues, the revenue gap in B.C.’s income to carbon tax shift is closer to $600 million.” Donnelly explains the wealth transfer in starker terms: B.C.’s low-income carbon tax budget is insufficient to offset 100 per cent of low-income families’ direct carbon tax costs and does not begin to offset the other 2.5 times cost embedded in their essential product and service purchases.

In the U.S., President Barack Obama’s green jobs cost $11.45 million each. The U.K. countryside is at war with hated windmill mandates and the cost of green energy. According to the Australian government, the German government warned that their green energy transition alone may cost consumers up to €1 trillion (C$1.4 trillion) by 2030. By failing to control the cost of guaranteed subsidies, Spain has been saddled with €126 billion (C$176 billion) of obligations to renewable energy investors.

One envies the board of Siemens. Regrettably given the strength of public sector unions, we cannot do the same with the authors of our appalling mess.

Elizabeth Nickson is a Senior Fellow at the Frontier Center for Public Policy (http://www.fcpp.org). She is author of Eco-fascists, How Radical Conservationists are Destroying Our Natural Heritage (Harper Collins).


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