Carbon Tax: Socialism or Sellout?

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In an effort to make William Brett Wilson Very Mad Online, Team Advantage convenes to explain the difference between demand-side climate policies (like the carbon tax) and supply-side climate policies (like restricting or banning production). We come to the natural conclusion that a world socialist government is probably the best way to tackle the problem.

Transcript:

Speaker 1:                           And you know that the socialists understand climate change as their method to undermine our free market capitalist system. They say it themselves.

Song:                                     (singing)

Kate:                   The Alberta Advantage is a bimonthly political commentary podcast that offers analysis on Calgarian and Albertan politics from a left wing perspective.

Song:                                     (singing)

Kate:                                     Hello, and welcome to another episode of the Alberta Advantage. My name is Kate Jacobson, and I will be hosting today’s episode along with team advantage members, Will,-

Will:                                       Hello.

Kate:                                     -Amir,-

Amir:                                     Greetings, citizens of Alberta.

Kate:                                     -and Bodie.

Bodie:                                   Hi there.

Kate:                                     Today is going to be a bit of a policy heavy episode, as we’re going to be talking about carbon pricing, along with the other policy, and political tools that we have in our arsenal to address the climate crisis. To start off with, I think it’s really important to do a quick run down of the different policy concepts and models that we can use, broadly speaking, to address greenhouse gas emissions. I think it’s helpful to think of two very, very broad categories: demand-side climate policies, and supply-side climate policies. These are terms often used in economics, but when we’re talking about policies to reduce greenhouse gases, it basically just means policies that deal with consumers who “demand” carbon versus policies that deal with producers who “supply” carbon.

Kate:                                     Demands like climate policies, what is on the table as far as policies that address our demand for carbon. These are policies whose basic premise is the idea that if we price carbon in some way, there will be less of a demand for it, because individual consumers and firms will make the rational choice in the market to consume less carbon, and then the market will as a aggregate, react to that lower demand by producing less carbon, leading to a reduction in greenhouse gases.

Bodie:                                   Basically what a carbon tax does is that it internalizes the externalities of CO2 pollution, because CO2 pollution obviously causes a lot of economic … I mean, an economic, environmental, and social problems, and those are currently not priced in CO2 pollutions, so that’s what we need to implement.

Kate:                                     Yeah, externality is a term that economists use to refer to unpriced costs. It’s basically the idea that when you fill up your car with gas at the pump, you are not paying for the cost of the environmental pollution caused by burning that carbon, or by having an internal combustion engine in your car. The idea of a carbon tax is that it is a way of putting a price on those externalities. It’s basically like an incentive that encourages everyone to curtail their uses of fossil fuels.

Amir:                                     What’s interesting about the concept of externality, I think it’s one of the things that I find more astounding about the carbon pricing schemes, is that the market obviously by itself cannot calm with the price for carbon, that supposedly portrays the environmental economic problems that CO2 pollution will bring through climate change. It’s very interesting to me because then what you have is a bunch of people who crunch some numbers that they’re based on very uncertain models, and they come up with a fake price for carbon. That to me is insane, because the market is supposed to be efficient, but it doesn’t even read … You have to come up with fake prices in order to put carbon … to have the market supposedly solve this problem.

Bodie:                                   Imagine my shock that capitalism is woefully unprepared to deal with climate change.

Will:                                       Liberals aside, there’s a lot of socialists that … or some socialists at least that are arguing for a carbon tax, and now not exactly as a substitute for economic planning, or a Green New Deal as many have been talking about right now, but as a complement, as something that will also have a re-distributional effect.

Kate:                                     Carbon taxes are kind of by a necessity, a regressive tax. They’re a regressive tax because you’re pricing a ton of carbon, and the burden of paying that tax falls more heavily on the working class than it does on the ownership class. That’s just because a poor person is going to have to spend a greater proportion of their income on the carbon tax than a wealthy person is. There are of course ways to make this tax like a re-distribution of wealth. You can have rebates for working class and lower income people, you can put the profits from this tax into programs that are meant to address concerns of working class people, but kind of on its face level it is an inherently regressive tax.

Bodie:                                   The issue with I guess universal dividends from a carbon tax is that it has to be high enough to produce any significant dividends, right? It would have to be at least $230 per ton.

Kate:                                     Yeah, and there’s no carbon tax that I’m aware of, certainly not in Canada, that is anywhere close to $230 a ton. We are talking about a fraction of that. We are talking about a quarter of that price. A carbon tax has to be very, very high before it starts having any actual impact on the way people engage with the market, and engage with the market for carbon. A lot of the times too when people talk about a carbon tax, they talk about a global carbon tax. This is something that needs to be priced worldwide, basically just because otherwise there are incentives for people to operations, or to basically ship their emissions downstream.

Kate:                                     The problem with this is that there isn’t really a good way to globally tax everyone. This is sort of like Thomas Piketty’s whole thing. It’s just like there should be some sort of global tax that the rich have to pay.

Bodie:                                   Yeah, so we can prevent capital flight, and all that shit. Like, just have a global tax regimen.

Kate:                                     It’s like, I have way more hope in communist revolution than I do have in a global tax regime.

Bodie:                                   If you’re going to go that far, go all the fucking way.

Kate:                                     Just do communism at that point, right? Why have a global tax regime when you can just have a global worker’s state? I’m sorry.

Bodie:                                   Preach.

Kate:                                     A carbon tax doesn’t only theoretically effect people’s choices in the market, it also has basically this backwards transmission of tax to the owners of what we call carbon stocks. That’s like carbon that hasn’t been extracted yet, and that basically lowers the amount of petroleum wealth in the world, and it lowers the incentives for people to actually invest their money in carbon stocks. I think that’s really interesting because it destroys a lot of the economic obligations that are enshrined in stock portfolios.

Kate:                                     When you consider things like pension funds, and trade unions, and all of the money that in society that is sort of wrapped up in things we consider to be part and parcel of the welfare state, that are wrapped up in these fossil stocks, and in these carbon stocks, and what a carbon tax would do to those, and how it would provide incentives for people to basically diversify on that level, I think that’s really interesting. I think that’s one of the more positive impacts, at least for me, from a carbon tax.

Kate:                                     Now, a carbon tax is a very demand-side climate policy. It’s focused on impacting the way people who demand carbon, and who consume carbon interact with the market. This is in contrast to supply-side climate policies, which are focused on impacting the way people who produce carbon interact with the market. We have some more varied options when it comes to supply-side climate policies.

Bodie:                                   For example, and I think this is the most important example, is that we can reduce our end fossil fuels subsidies. It’s very simple.

Kate:                                     Yeah. I think that’s so important when looking at Alberta, where we live, because expanding the Albertan tar sands will absolutely kill Canada’s ability to reach the Paris targets, and to live on a stable planet.

Will:                                       So far as Alberta, the tar sands take up a quarter of our emissions in the province, annually.

Kate:                                     Reducing the public money that the Government actually gives to this place is really, really important. Bitumen is a really high carbon footprint. We’re trying to build pipelines that will drive bitumen expansion. It really is worth emphasizing, there is absolutely no scenario in which we increase the production that is going on in the Alberta oil sands, and the world meets the targets set out by like the Paris climate accords. There is no scenario in which you can have both of those things at the same time.

Will:                                       Another option for supply-side policy would be to tax fossil fuel productions and exports.

Kate:                                     Yeah. That’s basically just instead of assigning a price to carbon when it is burned, or when it is consumed, you assign a price to carbon when it is extracted or exported beyond Canada’s borders, or when it is refined or produced in some way. It’s a little bit more straight forward, and it makes sure you are taxing the people who actually derive profit, and accumulate capital off of the production of fossil fuel. I think that’s another great option.

Amir:                                     Limit or prohibit the extraction of certain types of fossil fuels, or for certain areas, or the uses of particular technology, ie. planning.

Kate:                                     Yeah, exactly. It’s a way of dealing with the problem directly, saying, “You cannot use fracking to get oil out of this area.” You cannot get oil out of this area period. It is a protected area. It’s called the Arctic. Basically instead of trying to quantify the emissions of a company, which as Amir has pointed out, is an uncertain and complex process, you can just cap the production of fossil fuels. You can say, “You can produce X amount of barrels, like, per day of fossil fuels, but you cannot produce any more.” This is way easier to enforce because you’re dealing with a fairly small number of firms.

Kate:                                     The majority of the investment in Alberta’s tar sands is done by five companies, so these are giant centralized places that are really easy to regulate, especially when you’re the state, and you can just hand this down.

Amir:                                     Following on what Kate said about capping the production of fossil fuels as a supply-side policy, let’s keep in mind that supply-side policies are actually used on other stuff that perhaps it’s not seen as more politically problematic. People use supply-side regulations for tobacco, for drugs for examine, like illegal drugs. People just ban illegal drugs. They don’t like, oh, let’s just increase the price of illegal drugs and hopefully that they’ll phase out. People actually do that, so it’s not so much that the market is a more efficient mechanism, and therefore people are defending demand-side policy.

Amir:                                     It’s just that when it’s not politically viable, people push for demand-side policies, and they address it in this democratic speak, while actually we have a lot of empirical experiences of using supply-side policies to prohibit things, or cap things, and it’s fine. It’s fine.

Kate:                                     We use supply-side policies for lots of things, but I think tobacco is a good example. You can’t sell tobacco without a license. There are restrictions on advertising for tobacco, and for sponsorships. There’s heavy taxation on consumption. There are limits on where you can smoke. There are plain packaging laws. This is a combination of supply and demand-side policies to address an issue.

Amir:                                     Or alcohol. Something as simple as alcohol, there’s just a certain amount of liquor licenses, and at least they know their part. That’s a very supply-side.

Bodie:                                   Another method is undermining the legitimacy and the financial viability of certain fossil fuel extraction, like … and we can do this through divestment or legal claims against producers.

Amir:                                     Another important one that’s being ultimately used lately is the blocking of infrastructure that supports the production of oil products, for example, pipelines. That’s actually a very interesting example because if you go to a news about pipeline locate, and all the politics about pipelines, you will see, like for example in comment sections, just crazy people calling pipeline blockers, terrorists, and stuff. If you insult pipeline construction, it’s like you’re insulting someone’s grandmother. It’s pretty insane, I don’t know.

Kate:                                     It’s also worth considering that simply blockading export infrastructure can be successful. Right now, the TMX pipeline is not undergoing construction because of a successful court challenge brought forward by several indigenous nations in British Columbia. It is absolutely an option that works.

Bodie:                                   Amir is saying that people get so emotionally invested in it, and I think that’s really interesting, because blocking these things is a political opportunity for the left. I mean, leftist politics in general are just constellated around climate change right now. It’s just the biggest issue, so this is how we can insert our narrative as well.

Kate:                                     Yeah. It’s a huge political opportunity. That is because pipelines are basically like a form of infrastructure that are so often invisible. When they work well, and when they are useful to capital, we don’t even think about them. They are like completely invisible, but when they are being planned, when they are being built, when they fail, and when they are disrupted, they are very, very visible. Those are moments of opportunity for the left to point to the actual existing carbon infrastructure that we have to disrupt it, and to show kind of what the actual consequences of continuing to use that infrastructure are. I think something as simple as blockading things can absolutely not be discounted as a political strategy.

Bodie:                                   Keep in mind that blockading oil infrastructure makes W. Brett Wilson extremely angry online. That is always a good thing.

Kate:                                     Which is … It’s a not good. Making W. Brett Wilson angry online, priceless.

Amir:                                     Another important thing I want to add down is, I don’t know, to me as a heuristic, the more certain types of people get angry at something, the more it means that it’s actually the effective thing to do. The reason everybody was twisting their underwear because of the pipelines, it probably is because blocking the pipelines will actually be beneficial for curtailing carbon emissions. Unfortunately when you do effective things, you end up stepping on some people’s toes. That’s how it works. I’m saying, unhinged people in website comment sections calling 20 year old students, terrorists, because they are blockading pipelines, says something about the correctness of this position, I’m just saying.

Kate:                                     Yeah. I think it’s important to think about the interconnections between fossil fuels, and between making democratic claims, especially when we think about kind of the welfare state, and we think about democratic claims that were able to be advanced through the 20th century, those things weren’t due simply to workers being organized, or having heightened class consciousness. It was due to the ability of large groups of people to shut off the delivery and the movement of coal through strong unions. That was very much related to the form of energy being used, so I think when we’re looking at a politics of oil, we have to consider different options.

Kate:                                     We have to think about our options in a very material way. It’s not just enough to say, “Oh, we just need to organize into these better institutions,” or we just need to have higher class consciousness. You have to think about what we’re organizing around, and how that can be an opportunity. I think oil lends itself very well to a politics of blockading, and to a politics of sabotage. Of these policy options, which are for what it’s worth, for the most part all pretty much varying degrees of reformist politics. You’ve probably heard a lot more about the carbon tax, or the carbon levy, or the carbon dividend, than you have heard about any of the supply-side climate policies than we just mentioned.

Amir:                                     That’s probably because demand-side ones are if you want to keep [to around 00:16:56], won’t do anything effective, so that’s why it’s probably the political safer policies to impose, and that’s why we hear probably a lot about them. Supply-side regards more political will, and more willing to piss off people with big wallets. I think that’s why we probably listen, hear a lot about demand-side climate policies.

Kate:                                     Yeah. In Canada, most of the climate policies we talk about are carbon pricing plans.

Will:                                       With the exception of Quebec that introduced a cap and trade program in 2013, and Ontario that had it for a matter of a few months before Doug Ford repealed it, the carbon tax has been really the talked about environmental policy. BC I believe being the first one in 2008, first in North America, introducing the carbon tax, which was initially set at $10 per ton, and has risen to $35 by 2018. Increases of $5 per ton will occur annually until 2021 when it reaches $50 per ton in line with the federal plan.

Kate:                                     Here in Alberta, so we have a carbon levy. The aim of the carbon levy is quite lofty. It is to end pollution from coal generated electricity by 2030, develop more renewable energy, put a price on greenhouse gas emissions, cap oil sands emissions to 100 megatons a year, and reduce methane emissions by 45% by 2025. The policy mechanism they have chosen to do all of that is to have an industrial levy of $20 per ton of carbon in 2017, which rose to $30 this year.

Will:                                       One of the funny things about the Alberta plan, is that they are setting a cap on oil sands operation’s emissions at 100 megatons per year, but the average is 70 megatons per year.

Kate:                                     Now, I’m no climate scientist, but I’m pretty sure that in order to fight climate change, our emissions have to go down and not up. You all heard of this?

Will:                                       I’d say that’s correct.

Bodie:                                   It’s a good intuition I’d say.

Kate:                                     Now, there is like one good thing about Alberta’s climate leadership plan, and that is that it does have a redistributive mechanism within it. There are rebates for single Albertans who make less than 47,500, and families who earn less than 95,000 who receive the full rebate. That’s $300 for the first adult, and then your spouse, your equivalent, is 150, each child is $45 to the max of four. I know I received the carbon tax rebate. I imagine no one in this room was making over $47000 a year, so you all receive it as well.

Bodie:                                   The plan is that eventually $5.3 billion will be spent on “climate leader initiatives.” That includes the rebates, like we were just talking about, energy efficiency programs, public transit, support for coal communities, etc …

Kate:                                     Yeah. I do think that is one of the better parts of carbon taxes, is that they can be redistributive. Right? You can tax rich people essentially more, by giving poor people a rebate. That’s always good, to tax rich people more.

Will:                                       It’s estimated that it’s about 60% of Albertans will receive either partial or full rebates. What that also means is that 40% who are wealthier Albertans, are paying for these investments in public transit, and energy efficiency programs, whatever that means, and renewable energy projects, which is the way that it should work, is that it’s not revenue neutral, and we have wealthier people paying for these projects.

Kate:                                     Yeah, fuck rich people. They killed the planet, and now they can pay to fix it.

Bodie:                                   Every time I get on the train I whisper under my breath, thank you W. Brett Wilson.

Kate:                                     I thank the bus driver, and W. Brett Wilson at the end of every journey.

Will:                                       As part of the federal environmental plan, essentially the federal government put it on the provinces to come up with their own … they have the choice between a carbon tax, or a cap and trade system. They had to essentially meet certain requirements in order for a federal levy to not be imposed upon them. What we have is Saskatchewan, Ontario, New Brunswick, and Manitoba having them … this federal levy imposed on them in April of 2019. The rest of the provinces have their own. This federal levy is $20 on every ton of greenhouse gas emissions, starting in 2019, and rising by $10 each year to $50 a ton in 2022.

Will:                                       The interesting thing about the federal plan is that as opposed to the Alberta plan, it’s revenue neutral. All of the revenue that they will be receiving through these carbon taxes that are imposed on at least a number of the provinces, that is 100% coming back in federal rebates, but these federal rebates are not dependent on income again, like the Alberta rebate plan. It’s just dependent upon the province, so the provinces needs in their energy sectors, and whatever have you, and the number of people in your household.

Kate:                                     Not good.

Will:                                       Not good at all.

Kate:                                     Not great, Bob. The issue with this is that where the Alberta climate plan basically sees a role for the state, and seems to at least in some ways see the carbon tax as kind of a starting point to make public investments, and to think about the way the economy is structured. The federal carbon plan is literally just a way of kind of slight tinkering with the economy in hopes that the market will then magically sort itself out. It’s also worth pointing out once again, that the federal levy is $20 on every ton of greenhouse gas emissions starting in 2019, and it’s supposed to rise by $10 a year, and it’s going to hit 50 bucks a ton in 2022.

Kate:                                     When we were talking about the prices that are needed to actually make a carbon tax have any sort of impact on the market, earlier in the episode, we were talking about over $200 a ton in terms of a carbon tax. This federal levy is not anywhere close to that, and neither is the provincial one.

Bodie:                                   Now I’m truly mystified, because what is the point then?

Will:                                       The point is for the invisible hand just to take-

Kate:                                     It’s going to create a bunch of price signals in the market.

Amir:                                     The point is that okay, I think it is that you cannot just enact climate change now. That just makes you crank, or it just makes you someone on the list in Alberta, which I guess Alberta’s full of cranks. In general, it’s not politically viable outside Alberta, and lord Trump empire to actually deny climate change. If you assume climate change is real, then you have to put some policies in place, so which one is the most toothless policy you can put in, so that you don’t step on everyone’s toes. You can just have some symbolic carbon pricing, and then you’re not denying climate change, but-

Kate:                                     It’s also worth pointing out that the carbon tax is basically a conservative idea. This might seem kind of counter intuitive, because as ghouls keep getting elected across Canada, think Pallister, Ford, maybe Kenney in 2019, resistance to the carbon tax, as that Maclean’s cover so wonderfully put it, is growing in a really significant way. They don’t have like actual viable alternatives to the carbon tax. Right? Just saying I don’t like the carbon tax is not a climate policy of its own. What’s interesting to me about this is that conservatives are supposed to value good governance, and free markets, and limited government. Then a carbon tax is the conservative solution to climate change. Right?

Kate:                                     If you believe climate change is real, and we need to do something about it, and you want a solution that isn’t nationalization, or a proletarian dictatorship, then supporting a carbon tax makes sense, because it is a market mechanism for addressing climate change.

Amir:                                     Well, that’s why a lot of conservative cranks actually deny climate change, because if you believe climate change, you have to do something about it, so it’s better to say, no, it’s like a Chinese conspiracy or something, rather than something real. That’s what’s actually what’s happening within the U.S. for a while.

Kate:                                     I just really want to drive home the point that a federal carbon pricing plan, like the federal liberals, is a conservative carbon tax. It is a revenue neutral price on carbon that does not increase taxes, or shift them, where revenue gained from the tax is used to reduce taxes in other areas. It’s just assigning an imaginary price to carbon, with the hopes that the price signals and the invisible hand of the market will sort things out. I know it’s shooting fish in a barrel to point out that conservatives are hypocrites, but I’m doing it anyway because it really, really is very galling to hear Tories in this country talk about carbon pricing.

Bodie:                                   One of our favorite characters on this podcast, one Preston Manning, is actually in support of the carbon tax. Obviously what Kate was saying earlier is that, it is a fundamentally conservative position because it falls short of complete climate change denial, but it also accepts … its methodology is completely compatible with conservatism. You have the market mechanism, limited government, all that stuff that Kate already mentioned.

Kate:                                     Yeah. Manning says that himself. He says that a market based solution to reducing emissions is preferable to what he calls micro regulation by the government. That would be the supply-side climate policies we chatted about earlier.

Amir:                                     I don’t know if you’re like a little bit more cynical like me, it’s not so much that only it’s conservative, because it’s adjacent to doctrines of the free market, but literally it’s a way to do a symbolic gesture because you believe climate change is real, and you’re doing something about it, but you’re not doing anything. You know? Because if you actually did something, you’ll have to piss off Mr. Moneybags. Nobody wants to piss off Mr. Moneybags in government I guess.

Kate:                                     However, despite carbon pricing being the policy du jour in Canada, there are some pretty fundamental flaws with using this type of policy to seriously curb greenhouse gas emissions. For starters, these type of market based mechanisms have not actually been shown to reduce greenhouse gas emissions.

Amir:                                     An interesting thing is that the Kyoto Protocol happened in 1997. 1997 I think was the beginning of this sort of market based mechanisms for curbing carbon emissions. The first one that emerged that was market based is in Europe. That’s where the cap and trade mechanism works. What’s cap and trade? Cap and trade is basically you enforce a limit on emissions, and from that limit of emissions, you create all these permits for … Let’s say like you get the permit to be able to release a ton of carbon or something, but you can also speculate with experiments, and trade them, and sell them. Also, what also happens is that … This is called the ETS, the Emissions Trading Scheme, the ETS, which is in the European Union. It’s also connected to the clean developing mechanism where what happens is that literally if you are Mr. Moneybags, and you’re investing in green technology, you get more carbon credits that you can use to meet.

Amir:                                     It’s offsetting, so in the sense like it balances out. Let’s say you create a renewable energy industries on some crazy accounting mechanism that is actually still quite obscure to me, you can be like, okay, now because this is negative carbon emissions, you can emit carbon somewhere else. In Europe, I think it has … There’s not that much evidence that it has worked. This was introduced since the Kyoto Protocols, which was 1997. This is one of the more robust empirical evidence we have on market mechanisms, and emissions have not actually been reduced. Some country seems to reduce emissions actually due to crisis and recessions, not actually through the policy.

Will:                                       A more local example in BC when they introduced their carbon tax, we have not actually seen a reduction in emissions, except for in 2008 to 2009, when there was a reduction, which obviously we can speculate had to do with the economic crisis, rather than the actual carbon tax, ’cause otherwise the emissions have actually been increasing.

Bodie:                                   Not only are carbon taxes not socialist, they don’t work.

Amir:                                     I kind of think it’s another mechanism. The interesting part of all these mechanisms, the carbon taxes in Canada, and the cap and trade mechanisms, which they were also in Canada, I think Ontario had them briefly, and Europe, is that none … or all of this are about avoiding the issue. If you want to reduce carbon emissions, just enforce reduction. You’ve just got to assert. Instead it’s all this round about way of using the market as this problem solving mechanisms in an indirect way. Instead of … you know, you [trace 00:31:19] a straight path from A to B, you [trace 00:31:22] this convoluted path that’s really squiggly, and hope you reach your destination. You know what [crosstalk 00:31:27]?

Bodie:                                   The squiggle does not work.

Amir:                                     Yeah, exactly. It’s based on this insane speculative and uncertain thinking. For example, how the hell do you even … There’s not like real price for carbon that will offset … that will reduce its production because it’s cheap, then you have to make up a fake price. How do you do that? I guess you get together a … You create this crazy layer of NGOs and academics that just come up with speculative models, so like I guess if you come up with this weird number for a price, we’ll magically reduce emissions in 20 years. How the hell do you even start calculating that?

Kate:                                     Yeah. Current carbon pricing schemes use what is, I’m going to charitably call, arbitrary pricing for a ton of carbon. $10, $20, it goes up 10 bucks a year, it’s going to be 50 bucks in 2022, but some economists work from what is called the social cost of carbon, which is supposed to be a way of measuring in dollars, the long term damage done by a ton of CO2 emissions in any given year. Although this is still like a very kind of complex and obtuse way of pricing carbon, it’s worth pointing out that the social cost of carbon is much, much higher than current carbon prices. While they are still like a form of kind of market based climate policy, implementing them would still have a massive impact on oil sands development.

Kate:                                     Take Alberta for an example, new oil sands projects are unlikely to be viable, even under more optimistic price forecasts, if a large share of this social cost of carbon was actually borne by the producers who derive capital accumulation from it.

Amir:                                     If the social cost has to be big enough so that companies stop producing oil, that’s still like using the state in a round about way to curtail the production of fossil fuel. Why [crosstalk 00:33:31]-

Bodie:                                   Right. We want production to reduce, to go to zero preferably, net zero emissions. They’re saying, “Oh, well let’s just put a price on it.” Just fucking, I mean-

Kate:                                     Put a price on it so high they go out of business. This to me is just so neo liberal brain, because it’s like they’re ascribing a moral value to the private market doing something, instead of just the public and the state doing it. Why is it morally better for the market to drive oil sands like [inaudible 00:34:03] out of business by making their projects marginal with the carbon price, when it’s bad for the government to just nationalize it, and then be like, fuck you, it’s over.

Bodie:                                   We don’t do that, because we live in hell world, Kate. That’s why.

Kate:                                     That’s correct, Bodie.

Amir:                                     Okay, I’m going to put my cynical hat. The reason is that, okay, yeah sure, in an imaginary Alice of Wonderland world where you put like a million dollars per carbon ton, people will stop producing carbon obviously, because it’s not economically viable anymore. Of course, like duh, but the reason why I think people love this mechanism is you can put some arbitrary token price that doesn’t do anything, because of course, yeah, okay, I’ll be pro market based mechanism is they put like one million dollars per carbon ton, and I’ll be convinced. I’m just saying.

Kate:                                     One of the other things too is that even when there is a redistributive mechanism to carbon taxes as in Alberta, we’ve said this before, I’ll say it again, it is a regressive form of taxation, and the burden of it falls heavily on the working class. In my opinion, climate policy really needs to appeal to the material interest of working people, which means we need to make demands that will appeal directly to workers, to indigenous communities, to world communities. Using the carbon tax as like your flagship policy is I think a mistake, not only of economics, but also a mistake of messaging, and of communications, because I really don’t see how you can get people to rally around it.

Kate:                                     They said, well you can get people to rally around job guarantees, or like green infrastructure, or all of these types of things that would lead to real material improvements in people’s lives.

Will:                                       But Kate, how could we possibly respond to people’s material needs while also avoiding climate crisis?

Bodie:                                   I have an idea, full communism, baby.

Kate:                                     It’s just like getting really enmeshed in climate wonkery is not sexy. It is not … You can’t put it on a placard. I know this is something that climate wonks love to say, like if you can put it on a protest sign, it’s not good policy. I would actually reverse that. I would say if it can’t fit into the what do we want, when do we want it, chant, it’s bad policy. It should be that simple, and that easy to explain to people.

Bodie:                                   That’s why people are so disengaged from the debate, and it just leads people to climate change denialism really.

Kate:                                     Yeah, because liberalism has made in so many ways, climate politics about knowledge, about the belief or denial in kind of this science, and less about class struggle, about material control and material power. I think that is a huge mistake because it creates these huge barriers to entry, when I don’t need to be a climate scientist to know that my life would be better with a green jobs guarantee, and more public transit, and working people don’t need to be climate scientists to look at policy that would improve their lives, and recognize that.

Kate:                                     That brings me to one of the other flaws that there really is with the carbon tax, which is how can we accurately and ethically put a cost on environmental and climate crisis. Climate change makes Bangladesh unlivable, and it floods creating millions of refugees, and killing millions of people. What is the price of that? What is the social cost you can put on the carbon that led to that? I think it becomes this question of who matters, whose lives are worth it, what cost do we put on the destruction of species forever. I think there’s just no real ethical way to price those things.

Bodie:                                   We’ve been saying a lot that people aren’t interested in climate policy wonkery, and I don’t think it’s because people are too stupid to understand it, I just think that they don’t care, and they don’t have enough faith in “the system” to do anything about it. The more the people suffer immediate consequences due to climate change, like you said, walking downtown Vancouver and you’re smoking a pack of cigarettes through the air, that is a huge problem, and people will start to care, and hopefully they care before it’s too late, but this is obviously a huge political opportunity for those of us on the left who want a better world, that is not a hell world that we live in currently.

Kate:                                     Yeah. Climate change is going to be a public crisis that will require public solutions, because the earth is held in common for all of us to share. The atmosphere, and the climate system, and the coastlines, those are the commons and they belong to all of us. In order to adequately face the challenges of climate crisis, we are going to need public solutions. I’d like to point out that our modern fossil fuel infrastructure, dams, highways, rural electrification, that was a product of public works. It’s not like this is something that hasn’t been done before. I think we need to do it on a larger scale. I think we need to do it faster, but it’s been done before.

Kate:                                     If those things were the product of public works, and of state investment, then the new green economy can be the product of those things too.

Bodie:                                   Yeah, so we talk about the New Green Deal, and I think it’s worth noting that this is a reference to Franklin Delano Roosevelt’s New Deal, which was started during the Great Depression in America, and what he did was one of the big factors in it was that he made the Public Works Administration, which was a huge works … public infrastructure program building public buildings, a lot of the highways in America nowadays. This is like the momentum that brought the golden age of capitalism in America, in the late ’40s and ’50s. What if we … Obviously I don’t entirely agree with it, but that’s like a starting point that we can rally people around. Just imagine the possibilities with that.

Kate:                                     Yeah, it’s for certain a better way to talk about it, and a better frame to use. You hear Rachel Notley talk to say like the Steel Workers Union about TMX pipeline, and you would think listening to her talk that the only thing on the planet that is made out of steel is the TMX pipeline. But it’s like, steel workers can build houses, they can retro fit infrastructure, they can build wildlife crossings that will stabilize wildlife populations in Banff, right? A lot of the people who work in jobs that are induced from the oil sands in Alberta, so that’s things like construction, and steel work, there are other things that can be done in our society.

Kate:                                     You only have to look around at our society to see that. There are schools in Alberta that are crumbling. There is not enough public transportation in Calgary to fill the demand of kids going to school. There is absolutely things that could be done, if they were directed by a strong public state.

Amir:                                     I’m going to channel a little bit of my inner Albertan engineer, chemical engineer, because I think when you mention that to a lot of people in oil industries, they always actually turn that argument and say, “We get so much money from oil that …” For example, Calgary, I think the median household income is like 90000 a year or something ridiculous, and I think that’s actually one of the … At least in not outside all producing provinces. You know what in all provinces to me, that’s in opinion the biggest obstacle, how do you convince people who are making all this money off oil. An opinion, it’s obviously like that stuff has a deadline, right? They will have to halt it either right now, or in couple of the case when the world is hell.

Amir:                                     I think that’s my answer to you, but that’s always been the thing that I always [inaudible 00:42:27], how do you sell this to people that think 100 thousand a year in the [patch 00:42:34].

Bodie:                                   The question is do you want to transition that ai just, and we’ll build a better world, or do you just want to wait until it all blows up? Dare I say it comrades, socialism or barbarism.

Kate:                                     Bodie is right. We can have a just transition, or we can have an unjust transition, but we are going to have to transition away. You get one or the other. Here’s the thing, I want a just transition because I want to pursue climate change policies that prioritize the people who are A, most impacted by climate change, and B, most impacted by the transition away from an extractive economy. That aligns with my values. I think if you talk to a lot of people, you’ll find that that aligns with their values as well.

Will:                                       There is an ideological kind of barrier where, yeah, we have the proof right now, and we’re even experiencing it. I remember as a kid, we didn’t experience thick smoke every single summer from forest fires. It’s still treated as, oh wow, this has been really, really weird. Like, there’s been a whole bunch of forest fires lately. Isn’t this just crazy? The weather these days. We still kind of have to get past that, but that having a green jobs guarantee I think would do wonders for kind of bypassing this kind of ideological barrier if you want to call it that.

Kate:                                     Yeah. You have to have a vision of the future, and in my opinion you have to have a utopian vision of the future, because no one’s going to be inspired or interested in a talk that is all about decline, or about jobs going away, or about your community shuttering, but people are interested in talking about transitioning into things. You just have to know what you’re transitioning into. That’s why I think socialism is so powerful when we talk about climate change, because it provides us with a way to think about the world we’re building, and the world we want to live in.

Amir:                                     This is what I believe the connection of socialism to climate change. In my opinion, socialism is about being like a conscious society that solves its problems in the name of social needs. What do I mean by conscious? Instead of letting these stochastic forces of the market that nobody can control fully, you know because … like the way companies work is that firms are actually legal planning institutions, that they plan against the market. It’s not that they create the market necessarily, they are just planning and trying to shape it.

Amir:                                     Instead of having this crazy ass invisible hand that doesn’t do what everybody wants it to do in this situation, is to kind of just let’s build our own hand, and control our own hand, instead of … That to me is one of the biggest messages of socialism. The climate change is clearly showing that we need to start thinking about social need, because [inaudible 00:45:35] it could be that in some cases the market sometimes solves certain problems in a ad hoc manner, that’s always the defense. For example, in the history of capital is one of the things it did is that for competition, it created all these crazy technologies that didn’t exist before.

Amir:                                     Just because it will solve certain problems in very efficient manners, because you have to wait for the invisible hand to do the thing you want it to do, that doesn’t mean that it can solve all problems. We have to build our own hand. To me, honestly, if we cannot convince people about socialism with climate change, I feel we deserve to go to a dust bin of history. I don’t know, this is like a problem that … You have these guys that have 10 PhDs from Harvard, and Cambridge, coming up with this crazy fake prices, and these are like the intelligence of the world. Just because they are subject to [inaudible 00:46:35] ideology, or loyal to those institutions, if that’s the most it can offer, what the hell. We’re smarter than that, I’m saying.

Kate:                                     Confronting climate change is fundamentally an internationalist project of class struggle. You cannot change my mind.

Will:                                       I wasn’t going to try to.

Bodie:                                   I wasn’t, yeah.

Kate:                                     I think that internationalist perspective too on climate change is like really important because climate change is basically a criminal atrocity that is perpetuated by a very small minority of people who are living in core countries in the global north. It is primarily perpetuated on people living in periphery countries in the global south. Solving climate change is going to have to be an internationalist project in order to be successful, and in order to be worth anything.

Amir:                                     I think just putting my scientist hat on the internationalism issue, even just because of the law of physics, it becomes internationalist. Just because you … When you meet greenhouse gases, you’re not just heating your city, you’re dumping into the whole planet. What ends up happening is that if someone dumps carbon across the planet, everybody’s going to feel it. It’s not just like their city, and that’s one of the things why it makes it so difficult for the Korean Capitalist Social Order based on the nation state, because you’re basically trying to herd all these cats, all these nation states that are competing against each other, are conniving against each other because that’s how capitalism works, the survival of the fittest.

Amir:                                     At the same time, in order to save the planet, they have to do things that makes them less competitive in capitalist terms. To me, that shows that … I don’t know, I’m a crank, and I believe in socialist world government. I don’t know how to get there, but I think that’s a solution because if you are able to herd all these cats to do that, you’re already imposing a government, like some sort of sovereign above them.

Kate:                                     Might as well be like a worker’s government.

Amir:                                     Exactly.

Bodie:                                   Capitalism both as an era in history, and also as a set of ideas, an ideology, it’s completely incapable of dealing with this issue, because it’s an international issue, it’s a planetary issue. Also, I would like to add on to what Amir was saying about building a world government, or internationalist struggle, or whatever, that’s fine, I totally agree with that, but we also have to rethink the strategy around that because when people think of international policy, or international bureaucracy or whatever, they’re thinking of the UN, and things like that.

Amir:                                     Or they’re right wing, of like antisemitic conspiracies or something.

Bodie:                                   Right, and that’s obviously not what we want. We want more worker participation and production, both locally and internationally. It has to be more democratic institutions have to be built, and the UN, and whatever else is already existing.

Amir:                                     Or the IMF.

Bodie:                                   Yeah.

Amir:                                     Actually capitalists have like internationalist institutions. They have the IMF, they have the World Bank.

Bodie:                                   And the suck ass.

Amir:                                     Yeah, [crosstalk 00:49:58].

Kate:                                     They do. We have to strengthen democracy where it exists, we have to embolden democratic institutions where they exist, and then introduce them where they don’t. We have to democratize the commanding heights of the economy.

Bodie:                                   Democratize?

Kate:                                     I’m very worked up.

Bodie:                                   Yes.

Amir:                                     World plan economy, baby. I just want to say that, world plan economy.

Kate:                                     There are many different ways of addressing climate change, and many different policies that are built to address climate change. There are the demand and supply-side policies we talked about earlier, and there are a lot of market based policies. We spent a lot of the episode kind of going over a lot of the flaw with these market based policies, of which is that it is an unaccountable market, and this shadow bureaucracy of NGOs, and wonks, and think tanks that try to get from A to B by, as Amir said, drawing this really, really squiggly line. When we need to get from A to B like five years ago, and we need to do it immediately now or we are going to be very, very fucked up.

Amir:                                     The IPC is not like a French group, right? It’s the most important climate change scientific organization. They said that literally we have like a window of around 10 years if we want to be at hell world, so I don’t know, you’re still pushing for policies that are squiggly lines, instead of straight lines. That to me is insane.

Kate:                                     Yeah. I think it is a gross abdication of the responsibility we have to one another to fight for a better, fairer, more just world. The policy options that are currently in place in Canada, whether it’s the Alberta carbon levy, or the federal one, are wildly inadequate to deal with the problems we are facing when it comes to climate change. We’re talking about $50 a ton carbon taxes when we know we need $200 a ton carbon taxes to do anything, and that even that carbon tax is not going to be enough to win us the world we need, and the world we deserve, because it is not going to bolster a public sector. It is not going to bolster the workers. It is not going to bolster the global south.

Kate:                                     The people who should be in control of and leading the just transition away from our carbon extractive economy, into a green economy. In conclusion, all we need to do is build socialist power, and overthrow all of the governments, and establish a socialist world government built on planning for social need.

Bodie:                                   You heard it here first at the Alberta Advantage.

Kate:                                     On behalf of everyone here at Team Advantage, have a good one out there!

Bodie:                                   Bye.

Will:                                       Bye.

Amir:                                     Bye.

Song:                                     (singing)

Intro Speaker:                   Hey folks, did you know that the Alberta Advantage is part of a loose affiliation of left podcasts hosted at the bilingual, public interest, journalism media collective Ricochet? You can check them out at Ricochet.media. Our podcast is also on Patreon, and we just wanted to say thank you to everyone who has supported us so far. In the future, we have plans to dabble in sending Team Advantage members to report on location, and we might even invest in some downtown real estate. Check us out at Patreon.com/AlbertaAdvantage. We can’t wait to see you there, and thanks for listening.

Song:                                     (singing)

 

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