Sunday, 22 June 2008

Green Steps Forward

This past week Stephane Dion introduced the Liberal plan called the Green Shift which includes massive income tax cuts and energy cost offsetting benefits for those who live in isolated areas and for larger families. This will use up the revenues created by taxing the emitters of carbon dioxide and other greenhouse gases. I like the tax because it does not include gasoline for autos which costs too much already. High gas prices are hurting the economy but we can see that the Green Shift will work because of the impact that supply and demand cost increases have done with the price of oil and specifically gasoline. The more it costs the less people will use it and the less emission there will be of greenhouse gases. Clearly people are driving less this summer as a result of higher gas prices. Adding the tax to other sources of harmful emissions will reduce those emissions. There will be an incentive for people to "Go Green" to reduce those costs. Those who do will benefit greatly from the tax breaks and those who do not will have the extra energy costs offset to a degree by the tax breaks. This will encourage fuel economy and energy efficiency.
We can see the impact all ready at General Motors. GM announced it will close its Oshawa Ontario truck plant as a result of people not buying gas guzzling vehicles with the high cost of gas. Now GM is changing its tune, fortunately, and it looks like it will keep the truck plant open but shift to making Hybrid trucks which use less fuel. Here is a green shift caused by high fuel prices. When the new tax comes in (if the Liberals win the next election), we will see a shift away from other energy sources like coal used to produce electricity. Homeowners will take advantage of new tax credits to go with energy efficient heating and other ways to save money and reduce greenhouse gases. It is a win-win plan. Meanwhile Stephen Harper calls it "insane" and says the Liberals are planning to "screw" Canadians. He can not succeed with that approach. He will need to devise an alternative plan and then we can have a real debate. Is that likely to happen? We shall see. The Conservatives oppose the most popular of alternative ideas which is to cap emissions by big industrial energy users and allow a market to trade carbon credits. It looks to me like we will need both systems in place and more.

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