It started, as it so often does, with a Globe and Mail headline that was misleading and which managed to get the story wrong. The headline “Ottawa to dramatically scale back carbon tax on competitiveness concerns,” had the sub-head that “the decision follows months of lobbying by industries and comes just as Ontario is backing out of cap-and-trade,” but it completely misconstrued what the announcement was about. And every other news outlet was quick to follow with a matching story, because it was just too juicy to ignore, not that they got it right either. Not that it mattered – opponents of the federal carbon price backstop were all quick to cheer, declare victory, deploy their memes, and start hoisting Saskatchewan Premier Scott Moe around as a hero, without at all understanding what happened, so good job there, Globe.
This is misleading. Setting the OBA level higher is not like “only paying the CTax on 10-20% of emissions.” For more on OBAs, and how they differ from exempting emissions, see CH 6 of https://t.co/bRajwexVLE #cdnpoli https://t.co/VcNvE9muHH
— Trevor Tombe (@trevortombe) August 1, 2018
Govt long ago: “We will impose a CTax on large emitters, and provide subsidies for trade exposed ones. The size of the output subsidy will be determined soon, after analysis.”
< later releases details about subsidy >
Headlines: “Govt to scale back CTax!”
🤔
— Trevor Tombe (@trevortombe) August 1, 2018
As energy economists started bemoaning over Twitter, this wasn’t a policy change or a walking back on the carbon tax, because the price hadn’t changed. All that was announced was the subsidies available to certain large emitters who were particularly trade-exposed – in other words, this offsets any disadvantage they’d have by competing with non-carbon-taxed jurisdictions. They still pay the price, and it still is the incentive for them to drive innovation. But to add fuel to the fire, environment minister Catherine McKenna was particularly useless in communicating what this was about because she once again stuck to her go-to line that “the environment and the economy go together.” Her singular tweet during the day was unhelpful in unpacking the what was being announced. And it wasn’t until the end of the day that the National Post had a story written that spoke to those economists and unpacked the issue properly – you know, which should have been done at the start of the news cycle, and not the end of it.
The headline is, as many are this morning, incorrect. The large emitter system was always going to feature subsidies, just like Alberta. Today details around the size of certain subsidies was announced. There is no policy change by govt here. Certainly not walking back the CTax. https://t.co/qKI9xUiJpC
— Trevor Tombe (@trevortombe) August 1, 2018
Our government has a plan and it’s working. Our emissions are dropping and since we were elected, Canadians have created 500,000 jobs. In our plan, big polluters need to pay. We can do that while creating jobs & keeping Canada competitive. The Conservatives don't have a plan.
— Catherine McKenna (@cathmckenna) August 1, 2018
Which leads to the bigger problem here, in that this has become a classic example of how media organisations have the power to frame slightly more complex issues in the dumbest possible terms in order to set it up in partisan terms. Well, the Globehas been racking up a record of outright misleading stories as well, but they weren’t the only culprits. CBC’s Power & Politics, for example, gave a not correct rendition of what happened, got Scott Moe’s boneheaded take, and only then talked to an economist about the issue, by which point it had been framed as a government climbdown, which it wasn’t. But we keep seeing this kind of pattern of dumbing down stories that aren’t even complex. Recall Stéphane Dion’s “green shift” plan – the only thing that reporters would say was “it’s complicated!” when it wasn’t, and hence, that’s how it got branded throughout the campaign. It does a disservice to Canadians to not explain policy issues properly and to frame things with facts on the table rather than in partisan boxes, but that takes time, which is what nobody seems to have, and that is a major problem for our democracy.
https://twitter.com/bcshaffer/status/1024675593600651264
The level of the benchmarks has no effect on emission *intensity* incentives, but affects whether or how much to produce of some good. With competing markets not pricing carbon, targeting intensity reductions while sheltering the output margin from leakage is smart policy.
— Blake Shaffer 📊🇺🇦 (@bcshaffer) August 1, 2018
To quibble on the announced changes, it's questionable why there is a blanket 70% benchmark (with 90% for high risk EITE). Benchmarks should reflect competitiveness concerns and be set based on the risk of leakage (~ inverse elasticity of foreign supply wrt carbon tax)
— Blake Shaffer 📊🇺🇦 (@bcshaffer) August 1, 2018
Good reads:
- Bill Morneau is being warned by his department that job growth is expected to slow as the Canadian economy reaches what is essentially full employment.
- Here’s a look at the possible impacts of auto tariffs, and why a number of countries are meeting in Geneva to coordinate a multilateral response.
- Our forces in Mali are now ready to begin medical evacuations of peacekeeping forces in that country’s conflicts.
- Here’s some added context to the 3D-printed guns issue, including the fact that they are likely to blow up in a person’s hand.
- Both the Conservatives and NDP are howling at the EpiPen shortage, and demand other sources, the NDP even suggesting expropriating Pfizer’s patent.
- The number of deputy ministers and associate deputy ministers continues to grow in response to increasingly complex files, but could have accountability issues.
- The former (Harper-appointed) Canadian ambassador to Israel is suing the government, arguing that she was fired in bad faith.
- The Canadian Museum of Human Rights is removing the display with Aung San Suu Kyi as she can’t be considered a human rights leader any longer.
- Don Lenihan talks about the ways in which populism undermines democratic government, and how people let them get away with it.
Odds and ends:
Here’s some history about the founding of British Columbia that is in contravention to the usual racist history that we keep talking about.
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