Former Liberal leadership candidate and front-bench MP, Martha Hall-Findlay, was notably quoted as saying that “the effectiveness of Stephane Dion’s carbon tax could not be predicted, or even measured after the fact.” That set off a firestorm of controversy and comment on blogs across Canada. After all, why would Canadians agree to pay a huge new tax if they had no measure of its effect on the environment before or afterwards?
Earlier this week, she tried to clarify those comments by personally writing to one of Canada’s premier bloggers, Steve Janke. In her note, Ms. Hall-Findlay linked the effectiveness of Stéphane Dion’s carbon tax to the oil crisis of the 1970’s.
“It has been demonstrated repeatedly, around the world, that adding to market forces is the most effective way to affect behaviour. Those of us old enough remember significant fuel-reduction behaviour due to the 1970s oil crisis. There will be reductions in emissions from the Green Shift because we know that people will change their consumption patterns if polluting behaviours cost more.
My point is that both increased market oil prices and the imposition of a price on the burning of other fossil fuels, when working together, will reduce green-house gas emissions even further. It will, however, be difficult to determine the exact proportions of the reduction attributable to each.“
Here is what Ms. Hall-Findlay is clearly proposing: The Liberal carbon tax plan involves “adding to” the skyrocketing market price of fuel so that gas price increases “working together” with a Liberal carbon tax will cause people to “change their consumption patterns” thereby reducing emissions. The precedent that she cited for the dynamics required to “affect behaviour” was the “significant fuel-reduction behaviour due to the 1970’s oil crisis.”
Ms. Hall-Findlay is a lawyer and has stated her case clearly and with precedent. It is simple to research the facts surrounding the 1970’s oil crisis. When you do so, you will find that the events of the 1973 and 1979 oil crisis did in fact significantly affect consumption of carbon fuels.
“October 16, 1973 —Saudi Arabia, Iran, Iraq, Abu Dhabi, Kuwait, and Qatar unilaterally raise posted prices …and announce production cuts. Daily consumption dropped by 6.1% from September to February, and by 7% during summer of 1974, as the United States suffered its first fuel shortage since the Second World War. The large automobiles of the 1950s and 1960s were replaced by far more compact and energy efficient models.
The energy crisis led to greater interest in renewable energy and spurred research in solar power and wind power. It also led to …increased interest in mass transit.
In July 1979, President Jimmy Carter outlined his plans to reduce oil imports and improve energy efficiency in his “Crisis of Confidence” speech. During the speech, Carter wore a cardigan and encouraged citizens to do what they could to reduce their use of energy. He also installed solar power panels on the roof of the White House and a wood-burning stove in the living quarters.”
From a consumption point of view the oil crisis was a resounding success. There were however some less flattering effects of these crises:
“In the industrialized countries, especially the United States, the crisis caused the most hardship to the unemployed, the marginalized social groups, certain categories of aging workers, and increasingly, by younger workers. Schools and offices in the U.S. often closed down to save on heating oil; and factories cut production and laid off workers. In France, the oil crisis ended the Trente Glorieuses, 30 years of very high economic growth, and began the ensuing decades of permanent unemployment. In Australia, heating oil ceased being considered an appropriate winter heating fuel.
In Canada the industrial east suffered many of the same problems of the United States. The federal government attempted to correct this imbalance through the creation of the government-owned Petro-Canada and later the National Energy Program. These efforts produced a great deal of anger in the west producing a sentiment of alienation that has remained a central element of Canadian politics to this day. Overall the oil embargo had a sharply negative effect on the Canadian economy. The economic malaise in the United States easily crossed the border and increases in unemployment, and stagflation hit Canada as hard as the United States despite Canadian fuel reserves.”
This is what the Liberals are willing to accept in order to force Canadians to reduce consumption. That is not the worst of the news however. If Ms. Hall-Findlay is going to point to the crisis of the 1970’s as a model for reducing consumption, it is legitimate to ask “How much did the price have to rise in order to effect ’significant fuel-reduction behaviour’?” Here is what the historical record says:
“Since oil demand falls little with price rises, prices had to rise dramatically to reduce demand to the new lower level of supply. …The effects of the embargo were immediate. OPEC forced the oil companies to increase payments drastically. The price of oil quadrupled.“
“The Carter administration began a phased decontrol of oil prices on 5 April when the average price of crude oil was US$15.85… The world price of oil, …reached a peak in 1979 during the 1979 energy crisis, at more than US$80 per barrel.“
In 1973, the price of oil quadrupled. That is an increase of 400%! In 1979, the price of oil went from $15.85/barrel to more than $80/barrel. That is an increase of 500%!
What is the Liberal plan to “put a price on carbon” in Canada? Not only do they plan to do nothing about high fuel prices, they want to “add to” that cost so that their carbon tax “working together” with market forces will produce results like the 1970’s oil crisis. Clearly their initial tax targets are much too low to “change consumption patterns” and effect “fuel-reduction behaviour.”
If they really want to reduce carbon emissions like the 1970’s, the only way they can do it is by raising gas prices 400-500% and producing the economic devastation that was felt througout Canada, the US, France and Australia. Is this the Liberals hidden agenda that they will foist on Canadians once they get back to power? If not, then why are leading Liberals promoting their new carbon tax with exactly this type of justification?