Building the Green Economy

I will be posting a series here over the next few months covering different parts of the Green Party of Canada's Vision Green document. The first section I'd like to explore is called Building the Green Economy.

Economics is a subject that is tied directly into the environment. For many decades the field of economics has failed to recognize that our economy is a subset of global ecological systems. Instead, economists have traditionally looked at the environment as something to be values and consumed in the pursuit of economic prosperity; the environment, along with everything else, has been viewed as a subset of the economy.

The logical errors in that outdated model are now becoming readily apparent: as we degrade and consume ecosystems, we pay dearly for the loss of that 'natural capital'. Take the example of how New York City chose to implement a comprehensive watershed protection program to preserve and restore natural filtration services as a more cost effective means of maintaining water quality than water treatment. Here's another link to info on this example. This outside the box thinking is slowly being adopted by economists and some governments, but not many, and certainly not fast enough.

Now past the point of global sustainability, our resource consumption under an economic growth model is becoming a dangerous and obviously outdated model. It was Walter Bagehot who said, "The whole history of civilization is strewn with creeds and institutions which were invaluable at first, and deadly afterwards."


The following selected text excerpts are from the Vision Green introduction on a green economy.

The Green Party approach is to think holistically. How can we achieve the best possible economic result? What are the fiscal and regulatory impediments to economic sustainability?

With the U.S. our largest trading partner, how can we maintain a healthy economy without surrendering our sovereignty and becoming subsumed into the U.S. orbit, as contemplated by the so-called Security and Prosperity Partnership?

We strive for stronger local economies with a small business focus, increased national and regional self-sufficiency, economic diversification, more “fair” trade, more value-added manufacturing of resources, more green-certified production and a rapid shift to more renewable energy to create local economic opportunities.

This generation has the potential to capitalize on the single biggest business opportunity in human history – the shift to a low-carbon economy. Whether this is driven by high energy prices, dwindling oil supplies, strategic geo-political threats to foreign oil, the climate crisis, or all of them combined, the country that mobilizes resources to develop and commercialize low carbon technologies (e.g. alternate fuels, renewable energy and energy efficiency) will survive the price shocks of fossil fuel’s last gasps and emerge with a thriving economy. Canada should be that country.

It makes no sense to subsidize the wealthiest companies on earth to make the world’s most profitable product -- a barrel of oil. These perverse subsidies must be removed. It makes sense to reduce taxes on things we want – income and employment – while increasing taxes on things we do not want, like greenhouse gases and pollution that causes smog.

Canadian businesses want two things from their government: predictability and policy coherence. The Green Party government will ensure that the rules are clear, the playing field is level and decision-making is transparent.

Our fiscal plan is straightforward: Use the tax system to help meet societal and ecological goals. Get the prices right. Allow business to pursue profit, with clear signals of environmental and societal objectives.

Canada and the world community face an environmentally linked, energy challenge of historic proportions over the next few decades. The reality of rising fossil fuel prices, increased losses due to extreme weather events caused by the worsening climate crisis, higher global temperatures and worsening pollution levels will make mitigation and adaptation responses absolutely essential. Focusing community economic development and investment towards clean technology and services is both a smart economic development strategy and a superb investment opportunity.

Green technology has been called the greatest business opportunity of this century. All levels of government need to advance this green economic approach through effective tax and policy measures and appropriate skills and trades training at the secondary and post-secondary levels.

As part of the federal government’s contribution to advancing this green economic vision, the Green Party of Canada government will gradually and progressively shift current consumption taxes onto products and services that harm people and the environment while reducing taxes on income, products and economic activities that do no harm. This "green tax shift" will be largely revenue neutral, meaning that as certain taxes increase, other taxes will decrease. In particular, income and payroll taxes will decline. And because the Green Party is committed to eliminating poverty it would ensure that this tax shift would not unfairly burden less fortunate members of our society.

By moving to "true" or "full-cost” accounting, whereby products and services are priced according to the positive or negative impacts they cause throughout their lifecycle, our society can make rational market choices that will guide the economy toward environmental sustainability.

The Green Party believes in reforming our tax system to make it fairer and more in tune with Canadians’ desire for a healthy environment, a sustainable economy and a vibrant, caring society.

It makes no sense to subsidize the wealthiest corporations on earth – the oil companies. We must remove these perverse subsidies immediately, not in the slow, “grandfathered” approach of the Conservatives’ 2007 budget.

The Green Party will reduce taxes on things we all want, like income and employment, and we will increase taxes on things we do not want – things that harm people and our environment.

Our "green tax shift" will be progressive, with a schedule that gives industry time to gear up or down. And it will be revenue neutral because a tax shift is not a tax grab. Income and payroll taxes will decline and the changes will help, not hurt, less fortunate members of our society.

To shift taxes effectively, we have to change to a "true" or "full-cost” accounting method that incorporates economic, social and environmental costs and benefits in the national accounts. Using this method, products and services are taxed, and thus priced, according to the positive or negative impacts caused throughout their lifecycle. We have already done this with tobacco products. Such taxes help consumers make more rational choices.

There are other ways to put taxes to work improving our society. Our tax system must be designed to reduce poverty, encourage environmentally beneficial activities and generate more wealth for the 90 percent of Canadian families who are currently working harder without getting further ahead.

The Green Party’s fiscal plan is straightforward: gradually reduce our debt, give clear tax signals that enable companies to pursue profits on a level playing field, and shift taxes to ensure that both revenue streams and expenditures meet social, economic and ecological goals.

For more, including specific action items, see the full text here.


Click here to see all of my blog posts related to economics.

A Carbon Tax, the Arts and the Canadian Taxpayers Federation

There is a point where ideology can exceed common sense, and one might wonder if that is happening with the Canadian Taxpayers Federation.

One month ago Maureen Bader, BC director of the CTF, came out against arts funding stating that government subsidies to the arts should be abolished. Bader sees the arts as business activity, but it is more appropriate to compare investment in the arts with investment in things like parks and recreation. Perhaps Bader isn't aware of the difference between investments and subsidies.

According to a 2001-02 Statistics Canada report, with an investment of $6.8 billion from three levels of government, the arts and culture sector directly employed 740,000 people and generated $26 billion for the economy. I'm sure Bader doesn't want to hurt our economy, so it might be that she just doesn't understand the concept of EROI (economic return on investment).

Then Maureen Bader misrepresented carbon taxes while making fun of global warming 'theorists' <--(her term).

Poverty is a serious concern, and Bader's use of the issue to breed fear of a carbon tax is misleading. By suggesting that we imagine carbon taxes "so high that people can't afford to heat their homes in the winter" in the opening of her missive entitled The Carbon Tax Poverty Effect, she tries to scare us out of using critical thinking to examine the situation. By listing "global warming theorists" as beneficiaries of a carbon tax, Bader manages to question the reality of climate change while suggesting that public concerns about climate change are somehow preyed upon by scientists for financial gain. Ridiculous! This suggestion seems more like a call from Bader to question the science of climate change than a sincere concern for Canadians living in poverty.

It is irresponsible of Bader to haphazardly dismiss the seriousness of climate change, and by conflating the subject with poverty she leads the reader to conclude that action on climate change in the form of a carbon tax will invariably lead to widespread poverty. It's also irresponsible to dismiss the concept of a carbon tax without first investigating how it could be implemented correctly, or why many respected economists support the idea.

Only one national political party is calling for a carbon tax and suggesting that the revenue be used in part to reduce income and payroll taxes, as well as kick start green energy industries. This tax shift can be as close to revenue neutral as we want, and Canadians can decide for themselves if they wish to spend their tax savings in ways that reduce or increase carbon emissions and climate change.

In the absence of tax shifting, a carbon tax would likely impose a higher cost on some people than on others, in particular those who cannot afford to upgrade their energy efficiency or who have no alternative to driving long distances. The Green Party would use tax shifting in a way that provides equivalent tax breaks to such people, so that they would not suffer economic hardship. We cannot afford to dismiss the use of carbon taxes, and using tax shifting to achieve fairness is a way to make it work.


More reading:

Arts ire for canadian taxpayers federation

Is the Canadian Taxpayers Federation Right-Wing?

Canadian Taxpayer Federation being Dishonest with Canadians

Get The Prices Right (on tax shifting and GPC policy)

Green Tax Shift will protect Canadians against gas price shocks, says Green Party

Video: Dr. Mark Jaccard talks about carbon taxes

Carbon Tax FAQ

from the link above:
Q: Won’t low income and rural people be hardest hit by a carbon tax?

* In the absence of tax shifting, a carbon tax would impose a higher cost on some people than on others, in particular those who cannot afford to upgrade their energy efficiency or who have no alternative to driving long distances.
* The Green Party would use tax shifting in a way that provides equivalent tax breaks to such people, so that they would not suffer economic hardship.
* We as a society cannot afford to dismiss the use of carbon taxes. It’s much better to use tax shifting to achieve fairness.

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UPDATE (Feb 21st, 2008) Click here for a good blog post on the new BC carbon tax by Vancouver Island federal Green Party candidate Brian Gordon.

Harper not fiscally responsible, yet tax cuts only for show

In response to the recent announcement on budget surplus and tax cuts by the federal government, I've written the following as a letter to the editor. I grabbed a few points from comments and articles on the internet over the last week. This was printed in at least one local paper, and you may use it or modify it as you see fit.

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Letter to the Editor: Harper not fiscally responsible, yet tax cuts only for show

For years the Conservatives condemned Liberal surpluses as phony surprises. The irony of Harper bringing in a surprise surplus is not lost on me.

I don't disagree with the cuts to income tax and corporate taxes. I actually support a tax shift – reducing income and business taxes while phasing in a carbon tax to replace lost revenue. Most economist agree with this approach.

Unfortunately this ‘surprise surplus’ means that social and environmental priorities, like fighting poverty and homelessness, or meeting the challenge of climate change, have been left off the table by deliberate understatement of available surpluses. That money could fund capital projects such as social housing or transportation infrastructure.

One reason Harper cut taxes is to cut social services, to which his party is ideologically opposed. Harper also doesn’t seem to mind the infrastructure deficit worsening in Canada. The country-wide municipal infrastructure deficit has now grown to about $100 billion.

I keep hearing that the Harper government is offering handouts and tax giveaways (hardly a fiscally responsible practice) but all I’ve noticed is my child tax benefit, much of which will be taxed back by the government. The income trust flip flop was a major campaign promise that Harper didn’t make good on. No tax break there. This federal income tax cut offers savings per taxpayer at about $35. This is only for show.

Lastly, announcing a GST cut before shopping season is going to create purchasing doubt in shoppers minds. Couple that with the strong Canadian dollar and Mr Flaherty’s call for retailers to lower prices, and you have shoppers holding out for better deals.

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Tip: When sending letters to the editor, always include you full name, phone number and address so the papers can verify that you're a real person.

Green Party of Canada releases 'Vision Green'

PDF version

About the Green Party of Canada and Vision Green

From the GPC website:
Vision Green presents leading-edge thinking and rational, realistic solutions for all the issues facing Canadians. It was developed by a 31-member Green Shadow Cabinet and was informed by experts, activists and citizens who participated in policy workshops held across Canada. All the proposals are based on policies approved by the membership of the Green Party.

Green Party solutions are rational because the Green Party, unlike other parties, understands the scientifically verified limits to growth set by the carrying capacity of our planet. We must work within these limits. Otherwise, we will exhaust resources, degrade our environment and put our economy, health and children’s future at risk.

Our solutions are realistic because they follow “best practices” already in place in parts of Canada or other countries. These practices are cost-effective, deliver results and benefit people, the economy and the environment.

The Green Party’s down-to-earth solutions will work in Canada because they have worked around the world. Many have been successfully applied in Europe, where Greens are elected at all political levels, including the European Union and national parliaments. Countries where Greens have served in government are the countries creating new high-paying jobs while simultaneously meeting targets to reduce greenhouse gas emissions. They are the countries where the gap between rich and poor is small and the standard of living is high. These countries don’t trade off the environment for the economy. Their economies and environmental laws are both strong.

Many people find it hard to position the Green Party on the old political spectrum. We believe in sound fiscal management and strengthening our economy while ensuring that it is sustainable. Does that mean we are “right wing”? We believe that government must provide needed social services while protecting our environment and the rights of women, minorities and disadvantaged people. Does that make us “left wing”? We don’t think so. More and more people are simply thinking of the Green Party as the party of the future.

The Green Party is different from other parties in another important way. We will never place the pursuit of power above principle. We will not allow partisan politics to get in the way of good ideas and needed action. We agree with Canadians who say it’s time for parties in parliament to stop bickering and get on with the job of combating climate change and taking better care of our environment, our health and our economy.

The Green Party of Canada, founded in 1983, is now a major force in Canadians politics. Over 660,000 Canadians voted Green in the 2006 federal election. More than one in ten Canadians are now saying they plan to vote Green.

There is only one true Green Party. We are not like the old line parties who talk green when seeking your vote but sideline green action once elected. You can trust us to stay true to our promises and champion the issues you care about. If you share our vision and agree with our solutions, VOTE GREEN.

Change the climate in Parliament.

The Green Economy

Averting Climate Catastrophe

Preserving And Restoring The Environment

People

The Planet Needs Canada (and Vice Versa)

Good Government

Harper’s “war on drugs” regressive and irresponsible: Green Party

Harper’s “war on drugs” regressive and irresponsible: Green Party

OTTAWA – The Green Party today denounced Prime Minister Stephen Harper’s proposed drug strategy as an ideologically-driven step in the wrong direction and ignorant of evidence-based research. Last week, Mr. Harper announced his intent to spend $64 million in a war on drugs, focusing on punishment and enforcement – not prevention.

“Mr. Harper is far too eager to sign Canada on to a Bush-style war on drugs that has spent billions and achieved nothing,” said Green Party leader Elizabeth May. “An overwhelming body of evidence supports the notion that an effective drug strategy would focus on prevention, treatment facilities and harm reduction programs.

“Mr. Harper preaches prevention, yet spends many times the funds allocated to prevention on enforcing antiquated drug laws and punishing drug users. This approach is akin to simply burning tax dollars and is severely damaging to society. Instead of listening to the facts, Mr. Harper is trying to appear tough on crime in a desperate attempt to grab votes.”

Jared Giesbrecht, Justice Critic for the Green Party, added that the 2002 Senate Special Committee on Drugs and examples from European countries have led the Green Party to the conclusion that it is time to legalize the adult use of marijuana, developing a taxation rate for the substance similar to that of tobacco.

“Mr. Harper’s plan to impose tougher penalties on users of marijuana and other drugs is a misguided approach. Substance abuse is a medical issue, not a criminal issue. Simply spending more tax dollars on drug law enforcement is not the answer. Canadians want to see a comprehensive anti-drug strategy that gets to the root of the problem, not Harper’s patch-work agenda that seeks the quick fix.”

Mr. Giesbrecht added that the Green Party would fund and expand safe injection sites, like the Insite clinic in Vancouver, that are proven to save lives.