Cap-and-Trade — Useless, Dumb, and Reckless: Goldstein: Michael Ignatieff’s irresponsible election promise would be a financial disaster for Canada

Commentary, Energy, Frontier Centre, LOST

Michael Ignatieff’s 2011 election Red Book promise to create a cap-and-trade market in carbon dioxide emissions, completes a triple play of stupidity on energy and environmental policy by the Liberals going back almost 20 years.

It started with Jean Chretien’s reckless promise in his 1993 Liberal Red Book to cut Canada’s emissions to 20% below 1988 levels by 2005.

That economy-killing idea was a steal of the same promise made in the 1988 election by the then-Progressive Conservative government, which also did nothing to implement it.

Chretien did worse than nothing by signing the Kyoto accord in 1998 and ratifying it in 2002, bringing it into effect.

Kyoto called for Canada to achieve a more modest but still totally unrealistic target of reducing our emissions by an average of 6% below 1990 levels between 2008 and 2012.

Chretien and his successor, Paul Martin, did nothing with that commitment until the Liberals lost power in 2006, at which time Canada was 30% above its Kyoto target and incapable of achieving it by 2012.

Stephane Dion, after replacing Martin as Liberal leader in 2006, discarded Chretien’s previous rejection of a carbon tax and his own preference for cap-and-trade, in order to support a carbon tax as the central plank of his “Green Shift” program. It was massively rejected by voters in 2008.

Ignatieff, who called for a carbon tax in the 2006 Liberal leadership race, has flip-flopped in the opposite direction from Dion. Now he rejects a carbon tax and favours cap-and-trade.

Both policies put a price on industrial emissions of carbon dioxide when fossil fuels (coal, oil, natural gas) are burned for energy.

This drives up the cost of most goods and services by billions of dollars annually, either by businesses passing along their increased costs to consumers (cap-and-trade), or by governments imposing higher taxes (carbon tax).

While both measures have failed to lower emissions where they’ve been tried, Ignatieff’s proposal is even worse than a carbon tax.

Governments know how to tax. They know nothing about setting up an international cap-and-trade scheme — a global stock market in which big industrial emitters trade carbon credits.

Each credit permits the bearer to emit one tonne of carbon dioxide, with governments theoretically lowering total emissions over time.

For Ignatieff to cite Europe’s cap-and-trade market, the Emissions Trading Scheme, as an example to Canada, is political insanity.

Since it was created in 2005 by European governments it’s been a disaster.

It failed to lower emissions. (What did, unintentionally, was the 2008 global financial crash.)

It sent prices consumers pay for fossil-fuel generated electricity skyrocketing.

It provided undeserved profits to giant utilities and energy companies, while hospitals and universities fired nurses and teachers to buy carbon credits.

It has been beset by multi-billion-dollar financial frauds, plus widespread fraud in the carbon credit markets.

The latter occurred because many First World investments into “green” energy projects in the Third World to generate carbon credits, failed to lower emissions, due to lax regulation and financial and political corruption.

Unsurprising, given the earliest corporate backers of cap-and-trade in the U.S. were Enron’s fraudsters.

Present boosters include the Wall St. banks that precipitated the 2008 global recession through reckless trading in subprime mortgage derivatives, who were then bailed out by hundreds of billions of dollars of taxpayers’ money.

Critics of cap-and-trade argue a global market based on the suspect foundation of carbon credits, will lead to another disaster like the subprime mortgage crisis, costing trillions of dollars of wealth globally and tens of millions of people their jobs, homes and life savings.

Ignatieff’s apparent determination to establish a cap-and-trade system here, regardless of what the U.S. does, suggests more Liberal recklessness.

Considering U.S. cap-and-trade legislation is gridlocked in the Congress, this would place our fossil fuel industry in Alberta and Saskatchewan — especially the oilsands — at a huge economic disadvantage with our largest trading partner.

The Conservatives, since 2006, have continued the Liberal policy of playing lip-service to lowering emissions while doing virtually nothing.

Prime Minister Stephen Harper has said Canada won’t implement cap-and-trade without the U.S., but the fact remains both it and carbon taxes, have been disasters.

We should abandon them.

We need a made-in-Canada policy focusing on clean air, safe drinking water, cleaning up toxic waste dumps, safely disposing radioactive waste, tougher vehicle emission standards, boosting research into practical “green” energy sources such as natural gas, putting scrubbers on coal-fired electricity plants and creating more national parks.

Not another dumb Liberal idea.