Global Warming/Climate Change Super Thread

[CougarKing]

Somehow I feel this is just going to be dismissed again as another product of the "MSM-backed global warming conspiracy" discussed on this thread.  :

http://www.msnbc.msn.com/id/34392959/ns/us_news-environment/?GT1=43001

Review: Climate e-mails petty, not fraudulent
Climate experts, AP reporters go through 1,000 exchanges
By Seth Borenstein, Raphael Satter and Malcolm Ritter
The Associated Press
updated 9:18 a.m. PT, Sat., Dec . 12, 2009
LONDON - E-mails stolen from climate scientists show they stonewalled skeptics and discussed hiding data — but the messages don't support claims that the science of global warming was faked, according to an exhaustive review by The Associated Press.

The 1,073 e-mails examined by the AP show that scientists harbored private doubts, however slight and fleeting, even as they told the world they were certain about climate change. However, the exchanges don't undercut the vast body of evidence showing the world is warming because of man-made greenhouse gas emissions.
The scientists were keenly aware of how their work would be viewed and used, and, just like politicians, went to great pains to shape their message. Sometimes, they sounded more like schoolyard taunts than scientific tenets.

The scientists were so convinced by their own science and so driven by a cause "that unless you're with them, you're against them," said Mark Frankel, director of scientific freedom, responsibility and law at the American Association for the Advancement of Science. He also reviewed the communications.

Frankel saw "no evidence of falsification or fabrication of data, although concerns could be raised about some instances of very 'generous interpretations.'"

Some e-mails expressed doubts about the quality of individual temperature records or why models and data didn't quite match. Part of this is the normal give-and-take of research, but skeptics challenged how reliable certain data was.

The e-mails were stolen from the computer network server of the climate research unit at the University of East Anglia in southeast England, an influential source of climate science, and were posted online last month. The university shut down the server and contacted the police.

Million words reviewed
The AP studied all the e-mails for context, with five reporters reading and rereading them — about 1 million words in total.

One of the most disturbing elements suggests an effort to avoid sharing scientific data with critics skeptical of global warming. It is not clear if any data was destroyed; two U.S. researchers denied it.

The e-mails show that several mainstream scientists repeatedly suggested keeping their research materials away from opponents who sought it under American and British public records law. It raises a science ethics question because free access to data is important so others can repeat experiments as part of the scientific method. The University of East Anglia is investigating the blocking of information requests.
"I believe none of us should submit to these 'requests,'" declared the university's Keith Briffa in one e-mail. The center's chief, Phil Jones, e-mailed: "Data is covered by all the agreements we sign with people, so I will be hiding behind them."

When one skeptic kept filing Freedom of Information Act requests, Jones, who didn't return AP requests for comment, told another scientist, Michael Mann: "You can delete this attachment if you want. Keep this quiet also, but this is the person who is putting FOI requests for all e-mails Keith (Briffa) and Tim (Osborn) have written."

Mann, a researcher at Penn State University, told The Associated Press: "I didn't delete any e-mails as Phil asked me to. I don't believe anybody else did."

The e-mails also show how professional attacks turned very personal. When former London financial trader Douglas J. Keenan combed through the data used in a 1990 research paper Jones had co-authored, Keenan claimed to have found evidence of fakery by Jones' co-author. Keenan threatened to have the FBI arrest University at Albany scientist Wei-Chyung Wang for fraud. (A university investigation later cleared him of any wrongdoing.)

"I do now wish I'd never sent them the data after their FOIA request!" Jones wrote in June 2007.

In another case after initially balking on releasing data to a skeptic because it was already public, Lawrence Livermore National Lab scientist Ben Santer wrote that he then opted to release everything the skeptic wanted — and more. Santer said in a telephone interview that he and others are inundated by frivolous requests from skeptics that are designed to "tie-up government-funded scientists."

Contempt for contrarians
The e-mails also showed a stunning disdain for global warming skeptics.

One scientist practically celebrates the news of the death of one critic, saying, "In an odd way this is cheering news!" Another bemoans that the only way to deal with skeptics is "continuing to publish quality work in quality journals (or calling in a Mafia hit.)" And a third scientist said the next time he sees a certain skeptic at a scientific meeting, "I'll be tempted to beat the crap out of him. Very tempted."

And they compared contrarians to communist-baiting Sen. Joseph McCarthy and Somali pirates. They also called them out-and-out frauds.


Santer, who received death threats after his work on climate change in 1996, said Thursday: "I'm not surprised that things are said in the heat of the moment between professional colleagues. These things are taken out of context."
When the journal, Climate Research, published a skeptical study that turned out to be partly funded by the American Petroleum Institute, Penn State scientist Mann discussed retribution this way: "Perhaps we should encourage our colleagues in the climate research community to no longer submit to, or cite papers in, this journal."

The most provocative e-mails are usually about one aspect of climate science: research from a decade ago that studied how warm or cold it was centuries ago through analysis of tree rings, ice cores and glacial melt. And most of those e-mails, which stretch from 1996 to last month, are from about a handful of scientists in dozens of e-mails.

Still, such research has been a key element in measuring climate change over long periods.

As part of the AP review, summaries of the e-mails that raised issues from the potential manipulation of data to intensely personal attacks were sent to seven experts in research ethics, climate science and science policy.

"This is normal science politics, but on the extreme end, though still within bounds," said Dan Sarewitz, a science policy professor at Arizona State University. "We talk about science as this pure ideal and the scientific method as if it is something out of a cookbook, but research is a social and human activity full of all the failings of society and humans, and this reality gets totally magnified by the high political stakes here."

In the past three weeks since the e-mails were posted, longtime opponents of mainstream climate science have repeatedly quoted excerpts of about a dozen e-mails. Republican congressmen and former vice presidential candidate Sarah Palin have called for either independent investigations, a delay in U.S. Environmental Protection Agency regulation of greenhouse gases or outright boycotts of the Copenhagen international climate talks. They cited a "culture of corruption" that the e-mails appeared to show.
'Trick' reference explained
That is not what the AP found. There were signs of trying to present the data as convincingly as possible.

One e-mail that skeptics have been citing often since the messages were posted online is from Jones. He says: "I've just completed Mike's (Mann) trick of adding in the real temps to each series for the last 20 years (from 1981 onward) and from 1961 for Keith's to hide the decline."

Jones was referring to tree ring data that indicated temperatures after the 1950s weren't as warm as scientists had determined.

The "trick" that Jones said he was borrowing from Mann was to add the real temperatures, not what the tree rings showed. And the decline he talked of hiding was not in real temperatures, but in the tree ring data that was misleading, Mann explained.

Sometimes the data didn't line up as perfectly as scientists wanted.

David Rind told colleagues about inconsistent figures in the work for a giant international report: "As this continuing exchange has clarified, what's in Chapter 6 is inconsistent with what is in Chapter 2 (and Chapter 9 is caught in the middle!). Worse yet, we've managed to make global warming go away! (Maybe it really is that easy...)."

But in the end, global warming didn't go away, according to the vast body of research over the years.


None of the e-mails flagged by the AP and sent to three climate scientists viewed as moderates in the field changed their view that global warming is man-made and a threat. Nor did it alter their support of the conclusions of the Intergovernmental Panel on Climate Change, which some of the scientists helped write.

"My overall interpretation of the scientific basis for (man-made) global warming is unaltered by the contents of these e-mails," said Gabriel Vecchi, a National Oceanic and Atmospheric Administration scientist.

Gerald North, a climate scientist at Texas A&M University, headed a National Academy of Sciences study that looked at — and upheld as valid — Mann's earlier studies that found the 1990s were the hottest years in centuries.

"In my opinion the meaning is much more innocent than might be perceived by others taken out of context. Much of this is overblown," North said.

Mann contends he always has been upfront about uncertainties, pointing to the title of his 1999 study: "Northern Hemisphere Temperatures During the Past Millennium: Inferences, Uncertainties and Limitations."Several scientists found themselves tailoring their figures or retooling their arguments to answer online arguments — even as they claimed not to care what was being posted online.

"I don't read the blogs that regularly," Jonathan Overpeck of the University of Arizona wrote in 2005. "But I guess the skeptics are making hay of their (sic) being a global warm (sic) event around 1450AD."

'Good faith,' says one critic
One person singled out for criticism in the e-mails is Steve McIntyre, who maintains Climate Audit. The blog focuses on statistical issues with scientists' attempts to recreate the climate in ancient times.

"We find that the authors are overreaching in the conclusions that they're trying to draw from the data that they have," McIntyre said in a telephone interview.

McIntyre, 62, of Toronto, was trained in math and economics and says he is "substantially retired" from the mineral exploration industry, which produces greenhouse gases.

Some e-mails said McIntyre's attempts to get original data from scientists are frivolous and meant more for harassment than doing good science. There are allegations that he would distort and misuse data given to him.

McIntyre disagreed with how he is portrayed. "Everything that I've done in this, I've done in good faith," he said.

He also said he has avoided editorializing on the leaked e-mails. "Anything I say," he said, "is liable to be piling on."

The skeptics started the name-calling, said Mann, who called McIntyre a "bozo," a "fraud" and a "moron" in various e-mails.

"We're human," Mann said. "We've been under attack unfairly by these people who have been attempting to dismiss us as frauds as liars."



URL: http://www.msnbc.msn.com/id/34392959/ns/us_news-environment/?GT1=43001

 

[Dennis Ruhl]

Somehow I feel this is just going to be dismissed again as another product of the "MSM-backed global warming conspiracy" discussed on this thread.  :

http://www.msnbc.msn.com/id/34392959/ns/us_news-environment/?GT1=43001

Associated Press merely exemplifies the established press's desire to manage the news rather than report it.

I need a "Hide the Decline" T-shirt.  When tree-ring data does not correlate well with recent temperatures, most scientists would doubt its validity for historical purposes.  Instead the CRU accepted it for historical purposes, possibly understating historical temperatures and completely eliminating the medieval warm period.  The use of real measured temperatures for recent data indicates a sudden temperature increase in recent years.  By changing the base of measurement a situation akin to changing from Celcius to Fahrenheit degrees is created.

A scientist should be aiming for the truth.  Anyone can prove anything by ignoring half the evidence.  This is simply a case of academic fraud driven by deep personal belief and tens of millions in grant money.  As they say "its always about the money" or "follow the money."

 

[Rifleman62]

Off topic, but follows previous post:

Number of "factcheckers assigned by AP to Sarah Palin's book - 11
Number of "factcheckers" assigned by AP to President Obama's two books - 0

AP assigns 11 “factcheckers” to Sarah Palin’s book – and they still get it wrong

Mark Steyn, in a must-read, laughingly calls them the “Rogue Eleven”: http://www.steynonline.com/content/view/2644/99/

AP writers Matt Apuzzo, Sharon Theimer, Tom Raum, Rita Beamish, Beth Fouhy, H. Josef Hebert, Justin D. Pritchard, Garance Burke, Dan Joling and Lewis Shaine contributed to this report.

Wow. That’s ten “AP writers” plus Calvin Woodward, the AP writer whose twinkling pen honed the above contributions into the turgid sludge of the actual report. That’s 11 writers for a 695-word report. What on? Obamacare? The Iranian nuke program? The upcoming trial of Khalid Sheikh Mohammed?

No, the Associated Press assigned 11 writers to “fact-check” Sarah Palin’s new book, and in return the 11 fact-checkers triumphantly unearthed six errors. That’s 1.8333333 writers for each error. What earth-shattering misstatements did they uncover for this impressive investment?

 

[Kirkhill]

Specific to AP and Global Warming Reporting - Link

 

[Dennis Ruhl]

Last night the temperature at Edmonton International airport was - 46.  The previous low for the day was - 36.  It's only one day but my anecdotal guess is that it's part of the decline in world temperatures that started in 1998 and confounded climate scientists to the point of dishonesty to maintain the upward trend started toward the end of the last century.

 

[Edward Campbell]

If, and it’s a big IF, CO2 emissions need to be cut for the good of the planet/humanity then human behaviour must change.

Economics can drive human behaviour: make something more expensive and people will demand less of it - they will find cheap(er) alternatives.

The law of supply and demand is iron and immutable: when the cost of a product (supply) rises demand for that product falls; when costs go down demand goes up – it always works, everywhere.

Cap and trade systems are designed, by politicians, to disguise the workings of the market, to make people forget the law of supply and demand. The theory is that business – competition, actually - will, somehow, or other shield consumers/voters from the real costs of cap and trade – forcing investors to pay the bill. The theory, probably correct, is that consumers/voters are too stupid to understand that they, always, pay for everything, one way or another, and they will pay for cap and trade, too – mainly in a lower standard of living. Investors will not pay, they will move their money elsewhere. Canadians will lose jobs.

The one and only economic tool to change CO2 demand is a tax – applied once, to the individual consumer, at the final point of sale: the gas pump, the heating bill, the price of almost everything that is grown or manufactured anywhere in the whole world. Businesses, which are corporate, not individual, consumers would not pay those taxes.

When gasoline costs $10.00/litre Canadian drivers will use less and less of it; when the plastic packaging costs more than the item inside Canadian consumers will buy fewer and fewer of those items; when it costs three times as much as now to air condition a home Canadians will discover fans; when the price of home heating triples Canadians will reinvent the woollen sweater – domestic wool will be cheaper than petroleum based synthetic fibres; and so on. Costs will rise, people will adapt; new solutions will create jobs and wealth and Canadians will, broadly, live better.

Stéphane Dion’s Green Shaft Shift was silly because he, too, wanted to try to mitigate the wholly predictable economic effects of a carbon tax, but his basic idea was right: a consumption tax. Obama is wrong and Stephen Harper should tell him that and he should tell him we are not harmonizing with the USA. Some will claim that our economy will be disrupted unless we do what America does. Not so. Actually, if we ensure that only individual consumers pay the carbon tax, our goods and services will be cheaper to export and imported goods will be more expensive to buy – creating jobs for Canadians. Additionally, we can, if we wish, impose a carbon tax on e.g. petroleum at the point of export, making life more expensive for our American and Chinese customers – who will not stop buying because we are one of the few stable, honest countries in the whole world with large reserves of petroleum. (Generally, I oppose punitive taxes.)

If CO2 is the problem then a clear, simple carbon tax – applied at the final point of sale to individual consumers – is the answer.

If consumers do not pay, in cash, up front, then they will pay through unemployment and a lower standard of living, but pay they will. There is no one else. Canadians should grow up and smarten up.


Edit: spelling

 

[Dennis Ruhl]

I agree whole-heartedly.  "Cap and trade" might as well be called "smoke and mirrors."  The whole point to most of the countries of the world seems to be to snag a chunk of world wealth without investing in their people or economies.  I suspect a lot of tanks, aircraft, yachts, and Swiss bank accounts will be the result in the third world.

The only solution is to directly tax the CO2 creation that goes into a product.  Pain is involved for the consumer but destroying the western economies through the back door of cap and trade is not painless.  I realize that in the world of politics, nothing is ever revenue neutral but perhaps personal income taxes could be severely curtailed or eliminated. 

There would have to be discrimination between energy sources to make it work.  Nuclear power would have a very low rate of tax while coal fired power would be taxed dearly.  Manufactured goods from countries that are 100 % nuclear would be taxed much less than those  from countries that are primarily coal fired.  The trick would be to identify how much CO2 was created in manufacturing a product and taxing each kilogram at a certain rate to encourage discrimination between products. 

The main problem in implementation would be an additional accounting for weight of CO2 on top of dollars but any accounting system could handle it although point-of-sale terminals would probably need rejigging.  It is not totally unusual for organizations to record non-monetary units in their books.

The reality, as I see, is that CO2 induced global warming is a fraud but if the politicians are forced to attack it, let them do it through the front door.

 

[a_majoor]

Using armed guards to stop reporters asking questions, hiding raw data, methodology and algorithems and now "dissapearing" publicly available data down the memory hole are all useful tools for building trust. I would like to see the Canadian delegation refuse to discuss or sign anything at Copenhagen until the raw data and other information is publicly released:

http://wattsupwiththat.com/2009/12/14/whats-going-on-cru-takes-down-briffa-tree-ring-data-and-more/

What’s going on? CRU takes down Briffa Tree Ring Data and more

Odd things are going on at the Climate Research Unit at the University of East Anglia.

Widely available data, existing in the public view for years,  is now disappearing from public view.


Google shows the link was once valid

For example this link to Keith Briffa’s Yamal data:

http://www.cru.uea.ac.uk/cru/people/briffa/yamal2009/

Now redirects to a generic page of UEA. Try it yourself.

Now here is what that page says:

Climatic Research Unit

Due to the present high volume of visitors to this page, you will shortly be directed to the latest news about CRU on the main University of East Anglia website, or you can go there immediately by clicking on this link.

http://www.cru.uea.ac.uk/cru/people/briffa/

[Screenshot of formerly valid link]
The cached page at Google is still available here, though none of the links to data or papers works there either.

I’ll point out that if indeed “traffic” is a concern, redirecting to another page on the UEA server system doesn’t do much for the load, it just moves it around. The data files are mostly text, and not that large, they don’t have that much more impact that some wab pages with graphics.

The news page that you get redirected to hasn’t much to say, and has not been updated since December 3rd.

And it’s not just subfolders with data, it is the entire Climate Research Unit website that is shielded from public view. Try the main link which has been functional for years:

[color=]http://www.cru.uea.ac.uk[/color]

In the last press release issued by UEA we read:

Professor Edward Acton, Vice-Chancellor said: “The reputation and integrity of UEA is of the upmost importance to us all.

So now apparently, in this newly pledged period of “openness and transparency”, with the promise of releasing new data access, such as the Met office has done here:

http://www.metoffice.gov.uk/climatechange/science/monitoring/subsets.html

The access to  important CRU data is simply denied?

That’s a hell of a way to build public trust.

 

[Bass ackwards]

As much as I hate the thought of disagreeing with Mr. Campbell, my personal belief is that when the cost of heating ones home triples, there are going to be far too many Canadians -people who are already no strangers to wool sweaters- are either going to have to resort to crime or they're simply going to freeze to death. Call me a racist, but I don't see where you have to be a nonwhite immigrant living in Toronto to be "marginalized".

A couple of winters ago, while scanning CNEWS, I ran across two articles on the same day.
The first was the latest gloom and doom from the global warming crowd at their latest meeting. That particular one was in Honolulu Hawaii.
Somehow, I doubt they all sailed there for that meeting.

The second article concerned people living in Cape Breton who were at the point of having to choose between buying food or stove oil.

Even taking into account the plethora of things that the press routinely leaves out of their articles -maybe some of the folks in CB are spending money on things they oughtn't- the fact remains that
a) some parts of this country get awfully g-damned cold.
b) the cost of heating ones home in some parts of this country are already atrocious.

I'm lucky. I personally am in good shape for now. I make good money and I live in a small box of an apartment which is heated by nice cheap Manitoba electricity.
But Saturday morning, we had minus 56 windchills when I headed off to work (they're down to minus 40 now, thank God!) and if I was some poor bugger not making a big fat union wage, and I'd read about Barack Obama cranking the thermostat in the oval office, and a week later read David Suzuki writing a puff piece about how great Obama was for the environment (both of these occurred last winter), and it was suggested that all this was somehow going to make me "live better"...

Umm...no. 


 

 

[Edward Campbell]

I'm not disputing that there will be pain - or worse - IF we decide that we must reduce CO2 in order to save the world/humanity. What I am saying is that IF we must reduce CO2 then we should choose the economic lever that will work: a consumption tax aimed, solely and exclusively, at the individual end consumer - you, me and the poor people.

 

[Bass ackwards]

I picked up on the large "ifs" the first time around and I honestly don't think you're advocating the rape of the Canadian public.

I guess this is where my density factor comes to light because I fail to see the end difference in where the tax is targeted: either way it's going to be you, me and the poor people ultimately getting bent over the table while our betters (you'll find many of them in Copenhagen right now) carry on as if they were normal. 

 

[Edward Campbell]

The principle is that digging up oil or running an airline or making useless plastic thingys does not harm. The harm occurs when the oil is consumed or people fly on airplanes, etc. Tax the beejezus out of airline tickets and, bloody quickly, planes will stop flying; put a hefty tax on gas and people will use less so less will be mined; and so on. The consumers' choices (demand) drive everything else.

 

[mellian]

The principle is that digging up oil or running an airline or making useless plastic thingys does not harm. The harm occurs when the oil is consumed or people fly on airplanes, etc. Tax the beejezus out of airline tickets and, bloody quickly, planes will stop flying; put a hefty tax on gas and people will use less so less will be mined; and so on. The consumers' choices (demand) drive everything else.

Canadian Airline tickets as enough fees as is, taxing them even more would be ridiculous. Just to go to Las Vegas with a Canadian airline would cost me between 800 to 1000 dollars return trip from Montreal, while a hour jaunt to Burlington Vermont only cost me like 320.

Just for fun, checked the prices for going to Vancouver from Montreal one time in comparison to from Burlington VT or to Seattle and ride the bus up to Vancouver. For most of the dates I checked for, would have been cheaper.

So no, taxing airline tickets even more is not going to work, especially in the end tax money will be used to bail out the Canadian Airlines anyway.   

 

[Dennis Ruhl]

To repeat an earlier post Canada is not a heavily industrialized country and much of our high use of energy is simply to keep us alive at -40 and provide transportation between our distant cities.  Cutting back energy consumption will cripple our economy or freeze our backsides.  Whichever government puts teeth in laws that actually reduce CO2 will be quickly thrown out.  I suspect we can only expect lip service because only the NDP would willingly destroy the economy for ideals.  People may say they want reduced CO2 but the only way it can be accomplished is with brutal taxation.  Half measures will accomplish nothing.

 

[Bass ackwards]

The principle is that digging up oil or running an airline or making useless plastic thingys does not harm. The harm occurs when the oil is consumed or people fly on airplanes, etc. Tax the beejezus out of airline tickets and, bloody quickly, planes will stop flying; put a hefty tax on gas and people will use less so less will be mined; and so on. The consumers' choices (demand) drive everything else.

OK. After much staring at this and feeling stupid because I "just don't get it", I think I see where you're coming from.
And yes, whatever you tax the hell out of will be reduced in demand.
Great.
Personally I have no desire to fly anywhere. Nor would it kill me to not drive my jeep out to the lake on weekends.
On the other hand, I'm enjoying this "prairie windchill warning" that Environment Canada had been yakking about, and heating my home is simply not a "luxury" to be cut down on.
I'm not wandering around here wearing nothing but a thong -I've got lots of wool and  flannel happening. I'm just trying to stay warm.
So taxing the hell out of whatever I choose to heat with isn't going to reduce my demand.
It might make me give up a toy or two -and that's fine too. But once the toys are gone (and I don't have many) ... and I'm still freezing to death...then what ?
 

 

[mariomike]

put a hefty tax on gas and people will use less so less will be mined;

The experts say it will save lives. They calculated that 2,600 Americans are saved by a 20% increase in gas prices. ( Doesn't say if the fatality figure includes pedestrians struck, or motorists only ).  Also fewer injuries and better air quality:
http://journals.lww.com/joem/Abstract/2008/03000/High_Gasoline_Prices_and_Mortality_From_Motor.2.aspx

My apologies if this has already been mentioned in the thread. :

 

[a_majoor]

Regardless of what we think, 300 million Americans voting with their wallets either through a tax or Cap and Trade will change our way of life as well. Since most of the tax or Cap and Trade dollars will be flowing towards American political rent seekers, this won't be to our benefit at all.

Of course market capitalism works two ways, increase the cost and demand will drop, but other, lower cost substitutes will emerge. (By lower cost, I mean relative to what is being priced out of the market).

In fact, if you read the A scary strategic problem - no oil thread, you will find many solutions which may become cost effective under these new conditions.

 

[Kirkhill]

Interesting to me that under the Cap and Trade system it is recommended that the Oil sands companies buy credits from the Forestry companies because the oil companies produce CO2 and the forestry companies consume CO2.

Most industries that I know of pay their suppliers for their inputs.  Under the new model it seems that the forestry companies will be paid to consume CO2 and grow trees.

Other places that used to be caused a subsidy.

 

[Edward Campbell]

... But once the toys are gone (and I don't have many) ... and I'm still freezing to death...then what ?

The theory Experience says that people, being people - greedy and inventive - will find new, cheaper ways to heat your home. You'll still pay, as much as they - whoever develops the alternative - can wring out of you, but you will use less CO2 (which is our stated aim, after all - saving the planet and all that) and you will therefore pay lower CO2 taxes. If/when enough people drive fewer kms, and do so in e.g. electric vehicles, fly less often, heat their homes differently and use less plastic packaging and so on there will be less oil taken out of the ground because there will be no one to buy it.

Even in cap and trade, etc, the individual consumer pays, eventually, 100% of the costs - but partly, and insidiously, in lower standards of living: including in reduced life span.

 

[Edward Campbell]

Here is an opinion by two retired senior officials, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s Globe and Mail:

http://www.theglobeandmail.com/news/opinions/a-credible-budget-will-have-to-include-tax-increases/article1400092/

A credible budget will have to include tax increases
Hoping for the best is not an option when dealing with deficit

C. Scott Clark and Peter DeVries

From Tuesday's Globe and Mail,

Dec. 15, 2009 3:31AM EST

The Minister of Finance has once again repeated what he and the Prime Minister have said many times before: They'll never raise taxes or cut transfers to provinces or to individuals to balance the budget. Instead, they will rely on economic growth – and if this is not enough, they'll cut “other programs.” In other words, they'll hope for the best.

A federal deficit is something that can't be wished away, and if Canada continues its course, we'll have a heavy one to carry. The Parliamentary Budget Officer estimates that by 2013-14, the government will have a deficit of $19-billion, and it could reach $26-billion if the economy performs worse than assumed. More important, the PBO has concluded, the deficit has a significant structural component equal to about 1 per cent of GDP. Without cutting spending or raising taxes, the deficit won't go away.

It's not surprising there's a structural deficit. The potential growth of the economy will decline dramatically in the coming years, significantly restraining the growth of government revenues. Both Liberal and Conservative governments, meanwhile, have cut taxes dramatically over the past nine years, while increasing spending. The Conservative government alone has cut taxes by more than $100-billion since the 2006 budget. The cuts in the GST have cost the federal treasury $12-billion a year.

The Minister of Finance seems determined to close his eyes and hope things improve. The last federal budget contained a five-year forecast showing that, by 2013-14, the budget would be in surplus. In September, this was revised to a deficit of just over $11-billion. The only certain thing about a five-year forecast is that it will be wrong.

The coming budget must address the structural deficit. Moreover, the global and domestic economies will not behave nicely, and there will be unexpected policy pressures. The budget, therefore, should include a contingency reserve of 0.5 per cent of GDP. In total, the budget would need to find about $30-billion by 2014-15.

Measures should be phased in, so as not to threaten the early years of recovery. Indeed, a credible budget, one that would eliminate the deficit, pay down debt and allow for policy and economic uncertainties, would create confidence and reduce risk premiums on long-term bonds. This would strengthen investment and the recovery.

Can cutting “other programs” find $30-billion of savings? Excluding major transfers to other levels of government and individuals eliminates more than half of total program spending from restraint. Cutting spending on agriculture, aboriginals, international assistance, research, student assistance, certain Crown agencies and defence would be extremely difficult, given existing pressures.

Based on our experience, we estimate that the amount of program expenses that realistically could be subject to restraint is $55-billion, or 25 per cent of total program expenses. A 5-per-cent reduction to this base should be achievable but would yield under $3-billion in annual savings.

Any credible budget will have to include tax increases. The answer lies in taxing consumption. Simply phasing in a two-percentage-point increase in the GST would eliminate most of the structural deficit. This could be combined with an increase in the high-income tax rate, resulting in a more progressive tax system.

On the corporate side, our tax rate is already below the U.S. rate. It would be reasonable to freeze the corporate tax rate at 18 per cent. Finally, the number of “special interest” tax credits introduced since the 2006 budget should be re-evaluated.

This budget would eliminate the structural deficit and begin to pay down the federal debt. Program expenses and federal tax revenues, as a share of the economy, would remain well below their historical averages. The income tax system would be more progressive and supportive of economic growth.

We believe that the principles of realism, responsibility and prudence that underlie our budget should be used to judge the credibility of the government's coming budget.

The Prime Minister and the Minister of Finance are right to point out how much better Canada's financial situation is than in other G7 countries. But they must not forget that we didn't get to be the best by hoping for the best.

C. Scott Clark served as associate deputy minister of finance (1994-1997) and deputy minister of finance (1997-2000). Peter DeVries was director of fiscal policy (1990-2005) at the Department of Finance.

I agree with Clark and DeVries that:

• A federal deficit is something that can't be wished away;

• The Conservative government has cut taxes by more than $100-billion since the 2006 budget;

• The Minister of Finance seems determined to close his eyes and hope things improve;

• The budget will need to find about $30-billion by 2014-15;

• Cutting spending on agriculture, aboriginals, international assistance, research, student assistance, certain Crown agencies and defence will be difficult;

• Any credible budget will have to include tax increases; and

• The answer lies in taxing consumption.

I disagree that returning the GST to 7% is the right or even a good answer. A also disagree that raising income taxes is a good idea.

The GST is too easy for governments. Cutting the GST constrains the sorts of wasteful, ill planned social programmes that characterized e.g. the Trudeau years. Brining it (the GST) back opens the door for more of that damage. It will take generations to wring Trudeau’s damage out of the fabric of Canadian society even with constraints on spending; making social spending easier will just delay necessary, fiscally driven social reforms.

The income tax is, essentially, a tax on success and a tax on job creation – the savings (excess wealth) of the ‘rich’ (always a debatable term) are invested in companies that grow and hire new employees.

So, yes, a consumption tax, but: What consumption tax?

Well, how about a carbon tax? Even though I guess reducing CO2 is not going to save the planet/humanity, I also guess it (less CO2) cannot be a bad idea. Taxing carbon consumption, simply – at one, single point of sale: the individual consumer (not the company) – will raise billions and billions. Some of those billions and billions can should must be used to take millions of low income Canadians off the tax rolls, completely, thus making e.g. home heating less onerous while we wait for ‘better’ solutions.