Economy
Ottawa’s cap-and-trade plan long on costs, light on environmental benefits
From the Fraser Institute
” the Trudeau government’s new plan would reduce an already unmeasurable climate benefit to one even less measurable “
On Thursday, the Trudeau government unveiled its plan to cap greenhouse gas emissions from Canada’s oil and gas sector. The plan calls for a “cap-and-trade” system rather than a mandatory hard cap on emissions.
A previous plan would have required the oil and gas sector to reduce emissions by 42 per cent (from 2019 levels) by 2030. The new plan calls for a 35 per cent to 38 per cent cut (again, compared to 2019 levels by 2030). So the government has somewhat softened the target. However, the slight change is unlikely to improve the cost/benefit analysis for the sector or affected provinces.
As noted in a study published earlier this year, the Trudeau government’s previous plan would have resulted in at least $45 billion in revenue losses for the oil and gas sector in 2030 alone, which would imply a significant drop resource royalties and tax revenue for governments. And costs would ripple farther out from the oil and gas sector, into the plastics and petrochemical sectors, imposing more costs and threatening the employment of many Canadian workers in those sectors.
Crucially, according to the study, this economic gain would come with little or no environmental benefit. While the reductions would be large when only considering Canada’s oil and gas sector, the impact on climate change, which is a matter of global GHG concentrations, would be virtually nonexistent. The government’s previous plan called for Canada to reduce GHG emissions by 187 megatonnes in 2030, which would equate to four-tenths of one per cent of global emissions and likely have no impact on the trajectory of the climate in any detectable manner and hence offer equally undetectable environmental, health and safety benefits. In other words, the Trudeau government’s new plan would reduce an already unmeasurable climate benefit to one even less measurable.
And now, there are serious questions if the new plan will deliver even the miniscule climate benefit mentioned above. Under a cap-and-trade scheme, companies can trade in emission offsets if they’re unable to reduce emissions via their own technological processes, and to avoid cutting oil and gas production. But emission offset schemes are deeply dodgy.
As noted in a Guardian investigation of Verra, the world’s leading offset market—basically, organizations that reduce carbon in the atmosphere by tree-planting and other initiatives—more than 90 per cent of Verra’s rainforest offset credits (among the most commonly used by companies) are likely “phantom credits” and do not represent genuine carbon reductions. And as reported in the ultra-green Grist, rainforest credits are not the only bogus game in town. “In reality… the market for these offsets is ‘riddled with fraud,’ with offset projects too often failing to deliver their promised emission reductions.”
Canada’s domestic carbon offset market may be more robust than in other countries, but there’s no guarantee. If a significant share of Canada’s offsets prove to be as bogus as the international norm, GHG reductions from the oil and gas sector might be smaller still.
The Trudeau government’s new GHG cap on the oil and gas sector is a moderate improvement over the previous plan. The cap is a bit less stringent, and therefore might be easier to attain. And the use of cap-and-trade rather than a hard cap will give the oil and gas industry more flexibility, and more importantly, allow it to avoid curtailing production to satisfy the cap. But the plan still fails a critical cost/benefit analysis. It remains quite high in potential costs for Canada’s oil and gas sector, particularly in provinces which produce the most oil and gas, yet will deliver environmental benefits that are too small to measure.
Author:
From the Daily Caller News Foundation
Central bank digital currencies (CBDC) are a threat to liberty.
Sixty-eight countries, including communist China, are exploring the possibility of issuing a CBDC. CBDCs are essentially government-sponsored cryptocurrencies pegged to the value of a national currency that allow for real-time payments.
The European Union has a digital euro CBDC pilot program, and all BRICS nations (Brazil, Russia, India, China and South Africa) are working to stand up CBDCs. China’s CBDC pilot, the largest in the world, is being used by 260 million individuals.
While faster payments are a positive for markets and economic growth, CBDCs present major risks. They would allow governments to meticulously monitor transactions made by their citizens, and CBDCs open the door for government planners to limit the types of transactions made.
Power corrupts, and no government should have that level of control. No wonder China and other authoritarian regimes around the globe are eager to implement a CBDC.
Governments that issue CBDCs could prohibit the sale or purchase of certain goods or services and more easily freeze and seize assets. But that would never happen in the U.S, right? Don’t be so certain.
Take a look at recent events in our neighbor to the north. The government of Canada shut down bank accounts and froze assets of Canadian citizens protesting the COVID-19 vaccination in Ottawa during the winter of 2022. With a CBDC, authoritarian actions of this kind would be even easier to execute.
To make matters worse, the issuance of a CBDC by the Federal Reserve, the U.S.’s central bank, has the potential to undermine the existing banking system. The exact ramifications of what a CBDC would mean to the banking sector are unclear, but such a development could position the Fed to offer banking services directly to American businesses and citizens, undercutting the community banks, credit unions, and other financial institutions that currently serve main street effectively.
The Fed needs to stay out of the banking business – it’s having a hard enough time achieving its core mission of getting inflation under control. A CBDC would open the door for the Fed to compete with the private sector, undercutting economic growth, innovation, and financial access in the process.
Fed Chair Jerome Powell has testified before Congress that America’s central bank would not issue a CBDC without express approval from Congress, but the Fed has studied CBDCs extensively.
For consumers who want the ability to make real-time payments internationally, CBDCs are not the answer. Stablecoins offer a commonsense private sector solution to this market demand.
Stablecoins are a type of cryptocurrency pegged to the value of a certain asset, such as the U.S. dollar. If Congress gets its act together and creates a regulatory framework for stablecoins, many banks, cryptocurrency firms, and other innovative private sector entities would issue dollar-pegged stablecoins. These financial instruments would allow for instantaneous cross-border payments for market participants who find that service of value.
Stablecoins are the free market response to CBDCs. They offer the benefits associated with the technology without the privacy risk, and they would likely enhance, not disrupt, the existing banking sector.
Representatives Patrick McHenry (R-N.C.) and French Hill (R-Ark.) have done yeoman’s work advancing quality, commonsense stablecoin legislation in the House of Representatives, and the Senate needs to move forward on this issue.
Inaction by Congress will force innovators overseas and put the U.S. at a competitive disadvantage. It would also help the Fed boost the case for a CBDC that will undermine liberty and open the door to government oppression.
Tommy Tuberville is a Republican from Alabama serving in the United States Senate. He is a member of the Senate Agriculture Committee, which plays a key role in overseeing emerging digital assets markets.
From the Canadian Taxpayers Federation
Author: Jay Goldberg
The Canadian Taxpayers Federation is criticizing the Trudeau and Ford governments to for giving $5 billion to the Honda Motor Company.
“The Trudeau and Ford governments are giving billions to yet another multinational corporation and leaving middle-class Canadians to pay for it,” said Jay Goldberg, CTF Ontario Director. “Prime Minister Justin Trudeau is sending small businesses bigger a bill with his capital gains tax hike and now he’s handing out billions more in corporate welfare to a huge multinational.
“This announcement is fundamentally unfair to taxpayers.”
The Trudeau government is giving Honda $2.5 billion. The Ford government announced an additional $2.5 billion subsidies for Honda.
The federal and provincial governments claim this new deal will create 1,000 new jobs, according to media reports. Even if that’s true, the handout will cost taxpayers $5 million per job. And according to Globe and Mail investigation, the government doesn’t even have a proper process in place to track whether promised jobs are actually created.
The Parliamentary Budget Officer has also called into question the government’s claims when it made similar multi-billion-dollar handouts to other multinational corporations.
“The break-even timeline for the $28.2 billion in production subsidies announced for Stellantis-LGES and Volkswagen is estimated to be 20 years, significantly longer than the government’s estimate of a payback within five years for Volkswagen,” wrote the Parliamentary Budget Officer said.
“If politicians want to grow the economy, they should cut taxes and red tape and cancel the corporate welfare,” said Franco Terrazzano, CTF Federal Director. “Just days ago, Trudeau said he wants the rich to pay more, so he should make rich multinational corporations pay for their own factories.”
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