Recently, the Times & Transcript chose to run articles of concern in respect to an alleged carbon tax that Liberal Leader Stephane Dion would impose on gasoline and home heating oil, if and when he forms the next government. That is a patently false portrayal of what Mr. Dion has offered Canadians.

Dion has talked about putting a price on carbon but notes that carbon-pricing is “a work in progress” not fixed policy. No one except Stephen Harper’s Conservatives, notably John Baird (Canada’s Minister of Energy) has ever suggested that Liberal plans include an increase in gasoline or heating oil taxes. In contrast, Mr. Dion says that a Liberal government will provide incentives to increase the use of clean and renewable energy like wind and solar.

Dion does not shy away from the issue of climate change. He promises an absolute cap on emissions (contrary to Harper’s “intensity” targets) and says he would put a price on carbon. He would target the three largest industrial sectors: electricity generation, upstream oil and gas production (Alberta oil sands) and energy-intensive industries (forestry, mining, petroleum refining, steel-making, etc).

Each company in these industrial sectors would be assigned a carbon budget. Companies that failed to meet their carbon budget would be required to deposit $20 per excess-tonne of produced carbon dioxide into a designated “Green Investment Account”. The deposited money could be earned back if the business invested in green technology to reduce its carbon polluting output.

None of the above would directly increase taxes on gasoline or heating oil, as the Transcript suggests, but in fairness, carbon-excess penalties could lead to an increase in the base cost of gasoline or electricity which in turn could result in a tax increase.

Dion’s plan is to use the tax system to change behavior. He wants to rewrite Canada’s tax law in a way that would penalize carbon emissions and reward those who cut back on their use of carbon-producing energy.

His tax changes would be “revenue-neutral” that is the total dollar amount of taxes collected would not increase even if tax on a “don’t want” item like pollution increased. This is where things get a little dicey.
How will he match a tax increase to an income tax reduction?
What if a person not paying income tax is asked to pay a pollution tax?
What if a pensioner’s electricity bill goes up in response to a carbon-excess penalty?
How would that person be compensated?

These are questions that need answers if Canadians are going to buy the notion of tax-incented carbon reduction as revenue neutral.

Robert F. Kennedy Junior reminds us that 200 years ago, slave commerce represented one-fourth of Britain's gross domestic product (G.D.P.) and provided its primary source of cheap, abundant energy. In British Parliamentary debate over abolition of the slave trade, vested interests warned that financial apocalypse would succeed its prohibition.

A year later, Parliament abolished the slave trade. Instead of collapsing, as slavery's proponents had predicted, Britain's economy accelerated. Slavery's abolition exposed the debilitating inefficiencies associated with zero-cost labor. Slavery had hobbled productivity and stifled growth. With abolition, creativity and productivity surged. Entrepreneurs seeking new sources of energy launched the Industrial Revolution and inaugurated the greatest era of wealth production in human history.

In New Brunswick, we worry about carbon taxes and the potential abolishment of carbon as an energy source even as we recognize its inefficiencies. The U.S. practice of borrowing a billion dollars a day to buy foreign oil has caused the American dollar to implode. More than a trillion dollars in annual subsidies to coal and oil producers have beggared a U.S. nation that four decades ago owned half the globe's wealth. Carbon dependence has eroded the U.S.’s economic power, destroyed its moral authority, diminished its international influence and endangered its national security.

There is evidence to suggest that nations that "decarbonize" their economies reap immediate rewards. In 2006, Sweden announced the phase-out of fossil fuels (and nuclear energy) by 2020. In 1991 the Swedes introduced a carbon tax - now $150 a tonne. As a result, thousands of entrepreneurs rushed to develop new ways of generating energy from wind, sun, tides, woodchips, agricultural waste, and garbage.

In the 1970s, Iceland was 80 percent dependent on imported coal and oil and was among the poorest economies in Europe. Today, Iceland is one hundred percent energy-independent, with 90 percent of the nation's homes heated by geothermal and hydro power. The International Monetary Fund now ranks Iceland as the fourth most affluent nation on earth.

New Brunswick’s energy-hub strategy is carbon-based. True self-sufficiency for the province will demand a balance between carbon and renewable energy. That will require investment in wind, solar, wave and tidal power.

W.E. (Bill) Belliveau is a Shediac resident and Moncton business consultant. He can be contacted at bill.bellstrategic@nb.aibn.com Atlantic Insight is a published Blog inventory of opinion articles published weekly in New Brunswick's print media as written by W.E. (Bill) Belliveau, who is a resident of Shediac, New Brunswick, and small business owner, operating his Moncton-based marketing consultancy, Bell Strategic. He can be reached by e-mail at mailto:bill.bellstrategic@nb.aibn.com