Vancouver Sun Backgrounder on carbon taxes

A good 2 page review of the carbon tax concept from the July 3 2006 Vancouver Sun: "Properly Designed Carbon Tax Could Help Canada Battle Global Warming" by Jon Kesselman, a Simon Fraser University prof. Discusses taxing all energy produced in Canada versus taxing only domestically-used energy; the Quebec "carbon tax" (and whether or not its really designed as a carbon tax), using carbon taxes revenues to lower income taxes, and the alternative of cap and trade emissions trading.

Link
Link to Jon Kesselman bio

My comments: One point I appreciate is that Quebec is going against the goal of a carbon tax by insisting that cost increases from our new tax shouldn't be passed to the consumer. If the increase isn't passed on, then consumers don't change their behaviour, and keep on burning the same amounts of GHG. An assertion he makes about cap and trade systems is that they end up "stifling efficient growth by handicapping new and dynamic firms". But how? I'll email and ask; will post any results.

UPDATE January 30: Jon Kesselman wrote back like lightning, very appreciated. Here is his response in full:
"My statement was based on the most common method used/proposed for these systems. They allocate initial rights to emit based on the individual firm's historic emission rate (or some proportion less than 100% of that rate; some systems may allocate based on other criteria, such as production level). Hence, a firm newly entering the industry (or considering entry) has no entitlement to emit, meaning that it faces a competitive disadvantage vis-a-vis the incumbent firms in that industry (it has to purchase permits to emit for all of its production, not just a small part of its production). Similarly, a firm that (for whatever reason) is positioned to grow more quickly than its existing competitors in the industry will also face higher production costs due to the need to purchase permits to emit on a larger share of its production. Conceivably, one could design a system to obviate these problems, but I have not yet heard of anything that would do that effectively, efficiently, and equitably."