Converting to a low carbon…

Converting to a low carbon economy will be much harder for some than for others. Those with less money will be particularly hard hit as they don't have the capital to invest in higher efficiency devices. The cap and trade program was supposed to help address this. Given that the PC government has repeatedly stated that they are working for the 'people' I would expect they would be advocating for programs that help the 'people' save money in the long term. To be clear, I believe cancelling the cap and trade program is a bad idea.

The government has said repeatedly that the elimination of the cap and trade program will SAVE me $260 per year. Since cancelling the cap and trade program appears to be entirely about alleged cost savings I will defer any environment argument here. My argument against cancelling the cap and trade program is that it give a very small short term financial gain at the behest of a much more significant long term savings. I propose that using the funds collected through a cap and trade program to help me invest in high efficiency items will save me much more than that. Lets use a simple example to illustrate the point:

I drive about 25,000km per year. At $0.10/L my savings from removal of the Cap and Trade funds would be about $312.50/year, this would mean over 6.4 years my savings would be $2,000 (6.4 years is the typical amount of time new cars are kept after purchase) . If the government gave me this money up front, to help pay for a new, more fuel efficient car, I could then save approximately 32% on my fuel costs every year (based on average fuel use as reported by fulley.com for a Toyota Camry vs a Chevrolet Volt Hybrid) for 6.4 years. At 25,000 km/year and $1.25/L for gas that would be a net present value of $6,400 in fuel savings alone, plus the higher asset value. Note that this is money NOT spent, it is not taxed money given to me or money given to the gas companies. I would then pump all of those savings back into the economy. The same example could be used for providing a pool of funding for making any number of Ontarians' lives more cost effective and efficient. With each investment, less is spent on overhead costs and more can be spent on growing the economy. It is very plain to see that dangling the carrot of saving $0.10/L on gas is a short term, political stunt that will simply work to enslave low income 'people' to the oil and gas industry for longer, rather than help them reduce gas savings by 3x that amount (or more) by purchasing more expensive, high efficiency vehicles (hybrids for instance).

It could be argued that I should buy a hybrid with no incentive to effect the fuel savings, however, I, as with most Ontarians, don't have the money lying around so adding the incentive upfront helps make the decision much easier. Also important to mention here is that the vast majority of Ontarians don't really know the benefits and potential savings of Hybrid vehicles, a program like this would help to highlight to customers how much they would save on gas. History has shown incentives work to help consumers make smarter buying decisions as the market often seeks to obscure these products in favour of higher profit versions.

A further financial argument is quite simply that companies who have suffered a loss due to the cancellation of the Cap and Trade program in such a disorganized manner WILL seek damages and WILL win in court. The notwithstanding clause will not shelter the government from damages on the order of $2-3 billion. The reality is that the next provincial government, if not the federal government in the interim, will enact a carbon costing solution, so this is all wasted money.

Finally, it is worth noting, that the above example does not account for the obvious environmental benefits of a cap and trade (or other carbon costing solution). I sincerely hope that the Ministry of the Environment does not need to be reminded that their mandate is to advocate for a clean -climate change free- future for the people of Ontario. To hear the Minister of the ENVIRONMENT openly and happily talk about rescinding the cap and trade system is utterly disappointing.

~Concerned Citizen of Ontario.