Analysis of an analysis of Canada's Federal Carbon Pricing System

“Fiscal and Distributional Analysis of the Federal Carbon Pricing System” is a product of the The Parliamentary Budget Officer (PBO). The PBO’s analyses are, in general, performed, “for the purposes of raising the quality of parliamentary debate.” This analysis of the PBO document is intended to raise the quality of debate everywhere.

The Canadian government’s policy on pricing greenhouse gas emissions is to enforce provincial government’s have a policy on pricing greenhouse gas emissions - and where they don’t to impose a “federal backstop” policy. The PBO’s analysis is looking at the impact of the provinces where the federal backstop will be imposed - here I’ll analyse the analysis for only one of them (Ontario) to avoid bombarding the reader with too many figures.

Ignoring the other provinces will only be a portion of what’s ignored. The PBO’s analysis notes there are “two components” of the backstop policy empowered by the Greenhouse Gas Pollution Pricing Act.

• A charge on fossil fuels, or “fuel charge”... and
• A regulatory system for large industry, known as the “output-based pricing system” (OBPS)

The OBPS is glossed over for a few reasons: it’s expected to be a small portion of total revenue (less than 4% for Ontario), it’s not finalized (despite being expected to apply back to the start of the year), and therefore it’s not known which provinces will have satisfactory pricing already in place for large emitters and which the federal backstop will be imposed on.

So... in the PBO analysis, and here, the hundreds of large emitters that emit over one-third of the country’s greenhouse gas emissions aren’t considered.

Image captured from my presentation of data from Canada’s GHG Emissions Reporting Program

We’ll all focus on the millions of residential households instead.

Saving TransAlta: a demonstration of Canada's Clumsy Carbon Pricing

Canada’s Prime Minister announced aspects of a carbon pricing policy again last week. This time there were some details on how much more people in four provinces would pay for fossil fuels, the estimated revenues from those charges, and what is to be done with those revenues. Subsequently there’s much commentary on the content of announcement, and I’ll offer some more, but my attention was returned to a topic I prepared to write on quite some time ago: the impact of government actions in Alberta on a company owning much of the coal-fired generation in its province. I’ll use that company to demonstrate why I refer to the allegedly national policy as Canada’s Clumsy Carbon Pricing (CCCP).

The government’s website contains a section on “Ontario and pollution pricing” [sic] that describes the two main aspects of CCCP:

The federal carbon-pollution [sic] pricing system will be implemented in Ontario, under the federal Greenhouse Gas Pollution Pricing Act with the following features:

• For larger industrial facilities, an output-based pricing system for emissions-intensive trade-exposed industries will start applying in January 2019....
• A charge applied to fossil fuels, generally paid by registered distributors (fuel producers and distributors), as set out in the Greenhouse Gas Pollution Pricing Act, Part 1, will start applying in April 2019…

Because the 2019 pricing for provinces not deemed to have met federal pricing requirements is only now being finalized it will not be effective January 1st, but April 1st, while the Output Based Allocations (OBAs) that are still not finalized are still to be effective four months prior to that - on January 1st.

Clumsy - at best.

Stories tell numbers: Macleans silly Aglukkaq attack

John Geddes, sorta, has an article in Macleans: Aglukkaq touts emissions cuts, numbers tell another story.
Sorta, because the article is basically a longer version of claims made by economist Andrew Leach, a frequent contributor to Macleans, on Twitter.

According to Leach, "This answer from Min Aglukkak grossly misrepresents what the business as usual case in GHG modeling is":

Mr. Speaker, our government is committed to protecting the environment while keeping Canada economically strongly. Thanks to our actions, carbon emissions will go down by close to 130 megatonnes from what they would have been under the Liberals.

I described Leach's description of the Minister's answer as "a silly statement about a meaningless statement."
The Macleans articled subsequently calls the "130 megatonnes from what they would have been" a "meaningless comparison."

If life is a search for "meaningless", Macleans has done better than I: Minister Aglukkaq may have communicated that the government has the economy in mind as well as the environment, and that "carbon emissions will go down... from what they would have been under the Liberals."
Which would be a good political message in ~40 words.

Kyoto a no-go: Canada exits

There's a lot of press, and commentary, on Canada's long-anticipated withdrawal from the Kyoto Protocol.
I've visited the International Energy Agency (IEA) site to grab a spreadsheet of CO2 Emissions from fuel combustion (the bulk of emissions), and done a couple of brief calculations to develop illustrations of why Canada exited Kyoto, and when we fell behind on our targets.

The Kyoto Protocol was signed in December of 1997.  It set a base year of 1990 - some would say because of the skill of negotiators from countries that didn't have growing GHG emission between 1990 and December 1997.  Especially countries with recovering eastern bloc ecosystems.

Lessons From Ontario's Record Low Election Turnout

One of Ontario’s 3 main political parties had a lower percentage of eligible voters opt for their party than had been the case since 1943.

That party won.

Reported preliminary figures show Dalton McGuinty's Liberals won 53 of Ontario's 107 seats by collecting 37.62% of the 49.2% of possible electors that bothered to vote.  That's the lowest share of electors who chose the Liberal party since WW II. The first lesson for the Progressive Conservatives is that the Liberals weren't relevant in their loss.

Power Polititcs: "Events Dear Boy, Events"

Electricity generation made a surprise appearance in our federal election campaign last Friday, when Prime Minister Harper ventured to Newfoundland and announced a new Conservative government would provide loan support for a lower Churchill hydro project.   Sunday brought the reintroduction of cap-and-trade as the Liberals dropped their policy book, and this morning's top news story on the CBC was that we need to spend all kinds of cash on new capacity – their source being the companies selling all types of new generation and grid technology.  All this interest will vanish shortly because the politics behind the Lower Churchill project won't be talked about honestly (Quebec can't admit they've been thugs on Churchill Falls for 4 decades and intend on remaining thugs for another 3 decades - and Newfoundland can't admit the project is to free them from the shackles of Quebec).  There is time for provincial politicians to take advantage of the situation.

Conservatives Begin Canadian Election Campaign With Elusive Majority In Sight

I predict a strengthened Conservative government, and probably a majority. There are a number of reasons for that, most having nothing to do with timely specifics, policies, or image. The trends are towards a Conservative majority, and I don’t believe anything has occurred that changes that trend.

Seat Distribution in the House of Commons

RE: Jeffrey Simpson's Electoral injustice: Cities are getting the shaft

Statistics Canada, and the census, should not be the basis of seat distributions. For starters, census figures are heavily manipulated (they count a million fewer people than the population estimates they give, which they consider more accurate). Secondly, they have an assumption that non-citizen residents will become citizens in their forecasting of future electors..

This drives up the forecasted number of voters in BC and Ontario, both of which have much higher census counts than the registered voter counts, from Elections Canada, would indicate.