Saturday, January 28, 2012

An Alternate Economic Strategy

It has become clear that the Harper government is all about exploiting resources. In particular, there is a large push to shrink government, curtail government programs, and aggressively expand natural resource exploitation even at the risk of alienating a large segment of the population - which they are willing to brand as radicals or even enemies of the state.

It's also clear that Canada's sustainability indicators, perhaps meant to demonstrate sustainability in terms of our so-called sustainable development strategy, are a joke. Sustainability is not simply about pollution levels. Sadly, Environment Canada is now simply a department meant to foster resource development.


We know that there are three or four high probability scenarios that will have large economic consequences on the world economy:
  • Reduced petrocarbon availability.
  • Global climate change.
  • Systemic economic dependency and fragility.
  • Stratification of economic participation
Based on these issues, and the need to better integrate input from all sectors of Canadian society, the following strategies have been constructed.

Constructive Carbon Policy
It's clear that our dependence on oil and gas will eventually consume available reserves and have destructive effects on the climate in the progress. We must find a way to break our addiction to oil while working towards protecting ourselves from catastrophic climatic shifts.

Canada should implement a National Energy Tax (NET). This tax would impose an additional cost to the consumption of gas, oil and electricity. Basically, all of our high-energy products have a well defined sales path that would make it easy to calculate the amount of energy consumed and allow taxation at a relatively low rate, such as $1/barrel of oil equivalent.

Energy producers selling non-carbon based renewable energy resources would apply to be granted tax collection exemptions based on the percentage of energy provided from renewable sources.

Monies collected by this tax would be earmarked specifically for the development and promotion of sustainability practices and policies. These would include scientific research, experimental pilot projects, promotion of energy conservation, and promotion of sustainable practices. Such a program would fund and encourage sustainable energy practices until such a time as carbon based energy sources were no longer a major percentage of our energy consumption. 

A reasonable tax rate, applied to all consumers, would have an insignificant direct impact on current energy suppliers but it would exert a subtle pressure on all consumers towards a preference for renewable energy sources. This is a responsible way to move towards reduced petrocarbon reliance and reduced impact on our climate.

Systemic Dependencies
The recent global financial crisis demonstrates how interdependent the world's economies have become. It is clear that we must trade with partners but it is also clear that we must be able to protect ourselves from the risks involved in doing so.

Canada should create a department of Systemic Risk Research (SRR). This department will study and report on risks to Canada originating from economic sectors such as global finance, agriculture, and resource depletion.

Risk, when realized, has a very large cost. Risk reduction, often thought of as hedging in the business word, is a prudent way to manage risks. The SRR department will be responsible for publishing policy proposals in terms of protecting the public good for consideration by the general public as well as world economists. In particular, the concept of public good and the governments role in determining how it can be protected are vital to the public decision making process.

First Peoples Consultancy
Our First Peoples have a long history of living from the land and respecting nature. Canada should, as a strategy, connect with this history and provide incentives for the development of Native Canadian ability to promote sustainable land use within Canada and internationally.

At a rough guess making available unlimited higher education in history, economics, business, politics and environmental issues would be a good start. Western society speaks in terms of money, technology, business and politics -- we can't hear anything else.

This isn't an attempt to bring anything to Native Canadians, participation is obviously voluntary, but it is instead an attempt to bring the knowledge of Native Canadians to both Canada and the world. Finding a way to inject their philosophies in term of environmental stewardship into our western discourse could have a striking effect on the long term course of humanity which, quite frankly, faces a challenging future.

Economic Opportunities
We need to understand that economic opportunities, and in particular widespread economic participation, are the basis for a healthy and happy society. We also need to understand that there are always taxes, laws and regulations in a civilized society. However, in recent years lobbyists and corporate interests have been able to direct government activity specifically to their benefit with respect to tax breaks, legal changes and relaxed regulations.

Canada should create a taxation policy that favors the working class. Taxes on wage income should be at the lowest possible rate. Taxes on corporate profits and capital gains should be at a higher rate as it is blatantly obvious that lower income workers direct all their income back into the economy while higher income entities do not.

Canada should create a department of Economic Mobility and Participation (EMP). This department will develop policies and programs to enable Canadians to re-enter the education system or retrain for higher demand positions at any stage of life. Working with accredited education institutions in all regions of the nation EMP will provide and administer a nationally recognized exemption exam policy which will allow all Canadians to acquire university credits for courses through experience and independent study.

EMP will provide guidance to government at the community and regional levels with respect to removing the obstacles to economic reintegration faced by lower income citizens. In particular, this may involve dealing with existing debt levels, housing costs, educational costs, child care and other items that make it difficult to take the time needed to develop skills and education needed for an improved economic outcome.

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