Sunday, April 19, 2009

B.C. Election - the NDP and the carbon tax

The first poll in the B.C. Election campaign came from the Mustel group and it gives the Liberals a 17 point lead - 52% for the Liberals to 35% for the NDP and 12% for the Greens. The result naturally would be a large Liberal majority, but the campaign is still in its early stages and much can change. The poll also asks a series of questions about which party would best handle various policy issues. The NDP's difficulties can be put into perspective by looking at the numbers.

The poll doesn't specifically measure the reputation of the parties but they are clear to see from the results. The Liberals outpoll the NDP on the economy 63-23, the key issue with a recession just getting underway. A year from now the Liberal advantage would evaporate - in the likely event that the downturn will continue. The Liberals also outpoint the NDP on crime 49-25, an issue of some albeit secondary importance given the recent spate of high profile murders on the lower mainland.

The NDP maintains its traditional advantage in health and education but take a look at the issue of the environment - the advantage here lies with the Greens at 51%; the NDP trails far behind 21%, while the Liberals, despite Gordon Campbell's initiatives on climate change, poll just 16%.

The environment was traditionally an asset for the NDP, and one can see a small residue of that in the numbers. However, in opposing Campbell's carbon tax (and Dion's last fall for that matter), and thereby drawing fire from the likes of David Suzuki, the NDP may be risking long term possibly catastrophic damage to its reputation. The short term political calculus is probably right: more votes among lower income voters upset at a consumption tax but key to some swing ridings compared to the loss of more green leaning voters in either safe NDP or Liberal constituencies. It likely won't make much difference to the outcome of this election.

But reputations are made with every small step a party takes - think of Stanley Knowles rising in the House again and again to press for better pensions. It is wrong for the NDP to assume the fallout on this one can be safely ignored.

There is a good analysis of the issues involved by Economist Marc Lee in a posting to the Relentlessly Progressive Economics blog. As he notes "Rightly or wrongly, the carbon tax has become a litmus test for seriousness on climate change to the great detriment of the NDP. " Lee also goes on to point out that the NDP's "budget platform essentially endorses the rest of the BC government’s climate action plan and does make some improvements...". However, there is a fundamental difference between the NDP opposing the carbon tax when first proposed, and now saying they would abandon it. Along with the federal NDP (and various provincial governments) they endorse cap-and-trade as an alternative. In fact, one can easily do both - carbon taxes can be implemented much faster and we remain years away from any working cap-and-trade system because of the complex negotiations involved. For average consumers the impact would be the same - the price of goods and services will rise to reflect the increased cost of carbon. But these downstream price effects are less obvious to the electorate. That is what makes cap-and-trade currently popular with parties that want to be seen as environmentally friendly without taking political risks.

The short to medium term preoccupation with recession will inevitably give way to growing worry about global warming, simply because the problem isn't going away (2008 was tied for the eighth warmest year on record). Ratcheting back even weak initiatives such as Campbell's carbon tax is simply the wrong way to go. As Lee states "one major problem with the NDP’s proposal to scrap the tax is that the tax could be used to finance those good things ... that need a public boost. Instead, the NDP would have to borrow the money for those investments, and with the BC budget in a sea of red ink, the bias will be towards doing too little." Better to keep the tax and use it to fund alternate energy and conservation programs, even if the price effects on consumption from a small tax are weak. One way or the other the BC NDP needs to something to demonstrate its bona fides on the issue.

Eventually climate change will come to dominate all politics, and the individual choices made by parties over time will contribute one way or another to their reputation on this issue - even the specific short run choices that will be soon forgotten. The 2009 BC election will eventually fade from our consciousness, but the debate over how to deal with too much carbon in the atmosphere won't.

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