December 2020
With the recent announcement that Justin Trudeau plans to hike carbon taxes to $130 a tonne by 2030, resulting in around a $0.37 per litre increase in gasoline, maybe it’s time to get honest about some things.
Trudeau, like his environmental activist buddies, believes that paying carbon taxes is the best way to save us from the “climate emergency.”
Firstly, let’s get one thing straight: everyone wants a clean environment. Not so long ago, we burned fossil fuels with no filters or emission controls. We dumped industrial waste in lakes and rivers, with little care for the damage it did.
In 1969, Cleveland’s Cuyahoga River, with its oil slicks, bloated bodies of dead rats and serious health concerns for anyone who fell in it, caught on fire. It wasn’t the first time. The river previously caught fire, as recorded, in 1868, 1883, 1887, 1912, 1922, 1936, 1941, 1948 and 1952. The 1969 fire, which happened despite considerable effort to clean up the Cuyahoga River, was seen by many as a turning point and is one of the events that directly led to the establishment of the U.S. Environmental Protection Agency.
We’ve seen the damage that can be done by not having strict environmental standards, and I can’t see anyone tolerating reversing those standards. What comes out of car tailpipes, factory smokestacks and gets dumped into rivers and lakes today is cleaner than it’s ever been and getting better through technological advances. We’re not perfect, but we’re trying. The appetite for allowing industry to pollute without consequences is simply not there.
Environmentalists changed all that, and that’s a very good thing. Now we’re in danger of going too far the other way. The current belief is that we must get rid of everything powered by fossil fuels in favour of everything electric, with the power coming from only renewable forms of power generation.
Electric cars
In some environmentalist circles, electric cars are the silver bullet when it comes to our transportation needs. I’m certainly not against electric cars. I’ve driven hybrid cars and they are really nice to drive. By having a gas-powered engine to keep the battery charged on long trips, the issue of range limitations and availability of charging stations is addressed, something that is a major concern for skeptics of electric cars.
However, there are some serious downsides that proponents of abandoning everything oil seem to forget.
One very inconvenient truth about electric cars is that the battery is made using cobalt, a rare-earth mineral mainly found in the Congo, which is carbon intensive to mine. Further, will we be able to properly dispose of or recycle these lithium-ion batteries by the time they reach the end of their life-cycle?
Also, the carbon intensity of producing the batteries can be very high. Two researchers from the Fraser Institute, Elmira Aliakbari and Ashley Steadman, wrote, “Building a car battery for a sport-utility vehicle (1,100 lbs) could emit up to 74% more CO2 than producing an efficient conventional gas-powered car if the battery is manufactured in a coal-powered factory.”
Are we just trading one problem (emissions out the tailpipe) for another problem?
Additionally, with prices starting in the range of around $43, 000 for a Tesla Model 3, it’s hard to convince some to fork over the money when a (gas-powered) Toyota Corolla starts at around $19, 000.
Hyundai Kona, the second most popular electric vehicle, costs around $45, 000; compared to a regular Hyundai at around $21, 000.
The replacement cost of the battery varies, but can be a significant cost; some equal to the cost of a good down-payment on gas-powered car.
Well, what about government-paid vehicle subsidies to stimulate the electric vehicle market, you say? Some of the principles of a free-market economy are consumer sovereignty (consumer preferences determine the production of goods and services) and limited government involvement. If people really wanted electric cars, they would buy them.
Now, it’s arguable that those who are willing to pay the price of electric vehicle cars don’t really need a subsidy, but when Doug Ford’s government cancelled the $14, 000 per vehicle subsidy program, set up by Kathleen Wynne government, in 2018, sales dropped more than 55% from the same time the previous year, according to Electric Mobility Canada.
Automakers like General Motors have announced future plans to stop producing gas-powered vehicles, but are they really behind the concept of electric vehicles or are they simply trying to get ahead of any government-mandated bans on gas-powered vehicles? California has already announced plans to ban the sale of gas-powered vehicles by 2035.
What will happen if consumers continue to shun electric vehicles, or more importantly, auto manufactures find they simply aren’t profitable?
An analysis by Moody’s found that, “automakers are currently losing about $7,000 to $10,000 per vehicle and they will keep losing some amount on them for the next few years.” So, it would seem that electric cars are currently nothing more than a virtue signaling exercise for the auto manufacturers. Obviously, they hope that someday electric cars will be profitable, but how long are they willing to lose money for their shareholders? Are the auto manufacturers hoping that governments will eventually start covering these losses if electric vehicles never prove to be profitable?
The second quarter of 2019 saw a sales drop to 2933 from 7110 in the same period in 2018.
In all of 2018, only 2.1% of car sales were electric vehicle. Sales in the first quarter of 2019 were an insignificant 0.6%, a number some might consider a rounding error. Does that sound like a recipe for profitability any time soon?
As it stands now, electric vehicles just aren’t as popular as their proponents have hoped. That’s not to say they never will be, but we certainly aren’t there yet.
Further down the line, what happens when sales of all fossil fuels fall, and the governments start missing the gas tax revenue that they generate? Will the cost of hydro, and the taxes on hydro, be raised to compensate for the lost revenue?
By the way, for proponents of everything non-oil to use electricity generated by anything other than renewable power would be hypocritical, so have fun charging your electric vehicles and heating your home during the periods when renewables can’t keep up with base load demand.
Same with things made with plastic components, like your cell phone, or nylon, what the tents that the eco-warriors use when blockading pipeline projects are made of, but I digress.
For me, the primary issue is freedom of choice. Drive an electric vehicle if you want, or don’t. Use solar panels to power your home, or don’t. Heat your home using electric power, or don’t. In a democracy, we should always have the freedom of choice within the bounds of reasonable laws.
Freedom of choice should also extent to things like carbon taxes. For those who truly believe that paying carbon taxes is the only way to save the planet, may I suggest you send a cheque directly to the government every month and leave the rest of us alone.
Besides the fact that Canada’s emissions is around a paltry 1.6% of world-wide emissions; besides the fact that carbon taxes are a wealth redistribution scheme that have been shown to have no impact on emissions and raise the price of everything; and besides the fact that unless the rest of the world adopts our carbon taxes and emission standards, especially high emitters like China and India, we are simply crippling our economy for little over-all gain.
Of course, some taxes, or fees, can indeed have a positive effect, as with the success of Ontario’s Drive Clean program, a program that required car owners to pass an emission standards test before they could re-new their vehicle permit. Drive Clean was criticized by many as simply a tax-grab, especially since owners could get a conditional pass by making minimal repairs to their vehicle (so as to not overburden owners financially). However, in the end, Drive Clean succeeded in reducing emissions by forcing the old, inefficient, oil-burners off the road.
It should also be noted that Doug Ford’s government canceled Drive Clean when it became apparent that it was no longer necessary; when it had actually become an unnecessary tax-grab, something that rarely happens with governments. Is it possible when we finally achieve the environmental utopia of a carbon-free world (something that would be bad for photosynthesis, but I digress), that the governments of the day will cancel their carbon taxes? I won’t be holding my breath, although seeing as our exhalations also contain carbon dioxide, which isn’t a pollutant by the way, all living creatures may have to do just that to achieve a carbon-free world, but I digress again.
Now, I’m not saying that we should never look for alternatives to fossil fuels. What I am saying is that abandoning something that is inexpensive for consumers and low-emitting, or made low-emitting through technology, without having a replacement that is economically viable and without environmentally destructive side-effects, is economic suicide and simply madness.
Maybe some day we will come across an economically viable fuel source that is 100% environmentally friendly and plentiful enough to power the needs of a modern society, but we aren’t there yet. As it stands now, the world is simply not transitioning off oil, despite what anti-oil activists will have you believe.
We should also remember that despite what Greta thinks, humanity is not a threat and we can very much be a part of the solution.
Sources: https://www.cbc.ca/news/politics/carbon-tax-hike-new-climate-plan-1.5837709, https://www.hickmanmills.org/cms/lib3/MO01001730/Centricity/Domain/794/Characteristics%20of%20a%20Market%20Economy.htm, https://www.smithsonianmag.com/history/cuyahoga-river-caught-fire-least-dozen-times-no-one-cared-until-1969-180972444, https://www.nbcnews.com/business/autos/gm-going-all-electric-will-ditch-gas-diesel-powered-cars-n806806, https://www.washingtonpost.com, https://www.wsj.com/articles/california-to-ban-sales-of-new-gas-powered-cars-starting-in-2035-11600882738.
