Posted by Tim Stobbs on July 17, 2009
During my recent discussions at work I’m starting to realize that in the world of environmental policy there is almost never a ‘pure’ cap and trade system. Almost always you end up with parts of it that look a lot like a carbon tax, but they never call it that.
It’s all about the spin factor. You can’t use the words ‘carbon tax’ or ‘intensity’ without people jumping down your throat in Canada so now the game is to spin off the words into other concepts that conviently avoid those words.
Take for example the term: technology fund. Often this is tossed around as an idea where companies can pay into it at a set price and then the government uses the money to fund low or none emitting projects. Sounds great right, but consider this the government is selling a carbon credit at a set price which is basically by definition a carbon tax. Just in this case a voluntary one that you don’t have to use if you can find offsets or other internal reductions for less money.
Other ideas include a price ceiling which means if the price of carbon exceeds a certain amount you get to buy credits at a set price. Which again is a carbon tax, but if you don’t limit the number of credits at that ceiling you have effectively allowed your cap and trade system to have no cap. So now depending on the numbers the system looks a lot like a intensity based system.
So in general don’t accept just about anything a government comes up with at face value on regulating carbon. The reality is there is always some element of spin to it, but it is just a matter of well it has been spun and what they want you to see. It’s sort of similar to the word ‘green’ in marketing, it often means nothing but it is often hard to tell that fact.