Olaf linked to an article a few days ago claiming the following:
But the problem is the Kyoto deadline. Ms. Donnelly estimates it would cost $80-billion in new capital spending projects (including building retrofits, manufacturing plant upgrades and redesigning vehicle and engine production lines) to achieve the transformation Kyoto compliance would require.Olaf says it sounds low to him -- I dunno, I've heard $100 billion estimates for the US economy, which is ten times our size. So color me skeptical.
"The problem is that even if we had the skilled labour and cash in place to start construction on all $80-billion in capital projects today, most of the new clean energy supply would not be delivering energy product to Canadian consumers before 2013," she said.
But let's run with this $80 billion estimate. What would it take to raise $80 billion before 2012, our Kyoto deadline? Assuming our economy grows not at all in the next 4 years... 2% of GDP. A bit less, even. Hardly insurmountable, though I acknowledge that it's not trivial either. How do we raise this kind of money?
Well, the Stern Report says there's a social cost to a tonne of carbon of about $85. Canada emits approximately 760 million tonnes of CO2 per year.
760,000,000 X $85 = $64.6 billion. A year. So a reasonable and well-researched level of carbon taxation could fund 3/4 of the capital costs this estimate says we need per year, or more than 3 times the amount cited by 2012. Obviously, a tax like this takes time to get off the ground, but it's worth pointing out that some countries have much higher levels of carbon taxation -- Sweden has a tax of $150/tonne of CO2, though with some partial and full exemptions for some industries.
I think a reasonable starting place would be to start at $50/tonne, and add $10 to the tax every year for a decade. By 2018, we'd be paying Sweden levels of taxation on oil, coal, and natural gas.
And as anyone who's read up on this matter knows, the best case scenario is when industry and business engage in massive carbon tax evasion -- changing their investments and business plans to emit less carbon. The tax works twice.
Is it doable? Almost certainly. In Canadian politics, the biggest problem with environment and energy issues is the division of powers between Federal and Provincial governments. But the feds have basically unlimited taxation powers, so this is well within Ottawa's constitutional rights. All we need now is a government that doesn't view taxes as the mark of the beast.