Imagine you’re NDP Leader Thomas Mulcair and you’ve just been elected prime minister.
Now, you’re about to impose a massive, new cap-and-trade market on Canada as your solution to “Dutch Disease.”
In other words, you’re going to hit Canadian energy producers with a new cost, buying pollution permits from the government for emitting carbon dioxide, that they will pass on to consumers.
This will raise the cost of almost everything to the public. But if you’re Mulcair, you’re ecstatic.
After all, by auctioning off these pollution permits to industry, your government is securing a massive new revenue stream for itself from Canadians, worth billions of dollars annually, to pay for your new government programs.
Of course, there will be problems. For example, since, like Mulcair, you’re going to impose a cap-and-trade regime on Canada without there being one in the U.S., you’re about to damage the Canadian economy by making it more expensive to produce goods and services here, relative to our largest trading partner.
Plus, if cap-and-trade works as you advertised it, that is, if it actually lowers greenhouse gas emissions over time, the revenues it generates for your government will also diminish over time.
Sure, you can keep raising the price of the pollution permits by imposing stricter limits on emissions, but inevitably your government will face the law of diminishing returns.
Imagine being an NDP government stuck with a signature new tax that generates LESS money for your government over time. The horror!
Fortunately, the “solution” is easy.
It’s to detach cap-and-trade from the requirement to lower emissions, turning it instead into a modern-day form of papal indulgence that doesn’t help the environment, but simply makes “polluters” (translation, people) pay perpetually for the “sin” of using energy.
Carbon pricing is riddled with this idea of “papal indulgence,” right up to the global wealth redistribution schemes at the heart of the UN’s Kyoto accord and its successor agreements.
These, too, have nothing to do with lowering emissions.
They have everything to do with having the developed world pay a perpetual “papal indulgence” to the developing world, for the “sin” of emitting carbon dioxide, while the developing world goes right on emitting carbon dioxide without limits. (That’s why these UN schemes don’t work.)
This concept of papal indulgence extends right down to multi-millionaire “environmentalists” like Al Gore and Hollywood celebrities, who buy “carbon offsets” so they can nonsensically claim they’re leading “carbon neutral” lives, despite generating emissions based on their extravagant lifestyles that could choke a horse.
In reality, since there’s no way of eliminating greenhouse gases once they’re in the atmosphere – they hang around for anywhere from decades up to thousands of years – there’s no such thing as a carbon offset.
The only way not to emit carbon dioxide, is not to emit it in the first place.
The law of diminishing returns is one problem with cap-and-trade, but there are many others, based on real-world experience in Europe, which has had cap-and-trade since 2005.
Aside from not lowering emissions and driving up the cost of everything, cap-and-trade forces people into fuel poverty, meaning they have to pay more than 10% of their incomes just to power their homes, and is riddled with multi-billion dollar, criminal frauds.
But other than that, it’s a great idea. Honest.