Tuesday, May 29, 2012

Any smart business person would have made those changes anyways. Why? Because doing them increases profits, and saves them money!


It didn’t take long for the prompter of yesterday’s blog post, “The carbon tax was really nothing more than a tax grab, designed as a phoney green initiative, and the government knew that from the start”, to pose a follow-up question to me.

The response was:
That isn’t completely true. Initial design of tax was to have monies available for companies  to access for Research and Development etc

I noted their wording of the response, which included … “isn’t completely true” … and ‘initial design of tax’. 

So how much of what I said, did this person think was true?  I’m not sure, but hey, let’s take a look at just some of the grants, given to businesses in BC, by the Pacific carbon Trust.  And remember … this is money that has in large part come from each one of us, through the carbon tax, which we pay to the government.
Encana Corporation has reduced its greenhouse gas emissions by 85 per cent at a drilling program in northeastern British Columbia by conserving gas during drilling and reducing flaring. The system safely and reliably recovers up to 80 percent of the natural gas produced during a typical underbalanced drilling operation. This method reduces greenhouse gas emissions by about 1,000 tonnes of carbon dioxide equivalent per well drilled.
IF they are now recovering 80% of what was previously lost, was it not to their benefit to do this anyway.  This recovery process provides them with more natural gas they can sell, so why was a freebie give-away from the government necessary?
Pacific Carbon Trust has invested in an Improved Forest Management project that will result in the conservation of select old growth stands on TimberWest's private land. This is the first forest project to use BC’s Forest Carbon Offset Protocol (FCOP). The project is located on a 26,000 ha of Timberwest’s old growth forest free-hold property on Vancouver Island.
Just in case you missed it in news reports sometime back, TimberWest had announced they were not going to harvest this wood, as they had determined it would be too expensive to do so.
PCT has contracted to purchase offsets generated from Randhawa Farms Ltd.’s greenhouse project. The greenhouse operator installed insulating curtains at its three greenhouse locations in Abbotsford to reduce the amount of natural gas used as a heat source. These offset activities reduce annual operating greenhouse gas (GHG) emissions relative to the natural gas baseline.
Let’s see … they add the insulating curtains, and that then reduces the amount of natural gas they had previously required.  Seems like it should have been a project they would have undertaken in the first place, to reduce their production costs.
This facility has installed the Embala Power Networks Hybrid Heating system. This long term care facility with has a capacity of 218 complex care resident units, and has reduced more than 20 tonnes of carbon emissions each month since the new heating system was installed.

“The new system has improved the distribution of heat within the facility, creating greater comfort for our elderly residents, particularly during cold weather,” said Peter Kafka, Louis Brier Home and Hospital Chief Executive Officer. “The energy dollars we save each year, along with the carbon rebates, go directly into improving and enhancing care programs, services and the quality of life for all our residents.”
Sorry if this seems crass, but was the comfort of residents not a top priority for this care facility in the first place?  Again I also have to ask, would it not have made good economic sense, regardless of this grant, to have upgraded their heating system to reduce what they had been paying for heating costs?
This facility (Four Season Hotel, Vancouver) has installed the Embala Power Networks Hybrid Heating system - a patent-pending technology that reduces emissions, heating costs and energy consumption by determining automatically the best time to switch between fossil-fuel based energy and electricity in a 24-hour cycle.
Seems like a no-brainer cost saver to me again.  That said, why did they need a grant if installing this system provided them with a significant cost savings in the first place?
The mill (Neucel) has reduced – and intends to eliminate over time – its use of oil for fuel. Instead, it is using hog fuel, a wood waste product from lumber processing. This has required substantial changes to production equipment, as well as new standards, training and operating procedures for employees.  Prior to mill upgrades, hog fuel was significantly more difficult to work with to maintain consistent output – and therefore less likely to be used as a fuel of choice.
I know I’ll sound like a broken record, but again they would have seen production cost savings by doing this upgrade regardless.
The ground-breaking Darkwoods Carbon pilot project is North America’s largest private forest carbon project to date. Through the use of a new methodology and third-party validation and verification, the Nature Conservancy of Canada (NCC) has carefully quantified the carbon stored in the forests of Darkwoods – a 136,000 acre (55,000 hectare) project area in southeastern BC. Pacific Carbon Trust has purchased 450,000 tonnes of carbon offsets from the carbon sequestered during the years 2008-2010.

NCC carries out the stewardship of Darkwoods, resulting carbon being sequestered over time in addition to what would have happened in the absence of NCC’s conservation efforts. Had NCC not purchased the property, it likely would have been developed or logged at an intensive, “liquidation harvest,” level.
So, if I own a forest, I can get the government to essentially pay for my purchase, by giving me free money from the Pacific Carbon Trust.  Perhaps what is worth noting is that this is a charitable organization that already gives individuals tax receipts for land / moneys donated to it by individuals and groups.  And now this charitable organization should receive a double tax benefit by getting paid for these carbon offsets?

Dozens of additional examples, just like these, can be found on the website for the Pacific Carbon Trust.  What you won’t see however; are grants going to the individual taxpayers of BC.  No, instead, we’re coughing up money to the Pacific Carbon Trust so they can give grants to business and industry to upgrade their systems. 

Any smart business person would have made those changes anyways.  Why?  Because doing them increases profits, and saves them money!

Oh, by the way, here's what it costs to operate the Pacific Carbon TrustThe following is a summary of expenditures by type from the Annual Financial Report for the Pacific Carbon Trust (2010 / 2011). These expenses are for the 12 month period ending March 31, 2011
  • Salaries and Benefits ………………………  1,900,339.00 
  • Operating and Administration Expenses …  3,722,517.00 
  • Professional Services ………………………     828,473.00 
  • Rent ………………………………………..       178,699.00 
  • Amortization ……………………………….        53,257.00
Total Expenses: $6,683,285.00 

And one final note.  The money handed out, by the Pacific Carbon Trust, isn’t just coming from the carbon tax you and I are paying every single day.  Our schools, hospitals, government offices, universities, etc are all having money taken from their budgets, in the form of a carbon tax, which they are forced to direct to the Pacific Carbon Trust.

I'm outraged ... are you?

I’m Alan Forseth in Kamloops … with the thoughts of one conservative.

4 comments:

HB2cents said...

Hi Alan. I see you've joined the #BCCo2 conversation on twitter - welcome :)

I just wanted to share one tid bit of info with you that you might consider - the Carbon Tax is revenue neutral, and the PCT doesn't get a cent of it. Tax payers get income tax breaks as a result of the tax (that's why it is revenue neutral, i.e. government doesn't keep the money).

The tax was implemented to price carbon so that people would give thought to using less. If you do use less, you benefit even more - by saving on fuel and income tax.

Just wanted to make that point of clarification.

You should also know that Carbon Neutral Government (the reason why public sector pays for offsets to the PCT) is an incentive for those organizations to reduce carbon so they pay less in offsets. As a result of this, busy hospital CEOs and the like have actually paid more attention to their energy use because they are required to measure their CO2 output. This forces them to see the opportunities to reduce energy use - and they are doing it.

Like you point out in your article, you would think that if there is the potential for a business or school to save money by investing in new technology or simply turning down the heat, they would. The sad truth is people see cost (new curtains in a greenhouse, solar hot water heaters) and they turn the other way... unless there is a discount or incentive or law.

Alternatively, when people show leadership and demonstrate the benefits of investing, you can get others to follow - that is another kind of incentive. Now that carbon pricing has been in effect for a few years, and there are some good demonstrations of reducing emissions and saving money, I think we'll see more change by "carrot" than by "stick".

Just my 2 cents :)

@HB2cents

Unknown said...

Thanks for your comments HB2cents ... they are appreciated.

I, and many others, still fail to understand how something that is revenue neutral can all all of a sudden create a $1+ billion dollar hole in the governments revenues if it is removed.

Another problem, I think, is the tax reduction itself. As I mentioned, for those in larger urban centres, public transportation is more readily available, to more locations, and more often. In the interior and the north that is not necessarily the case. Those who work in the resource sector also aren't able to hope on a city transit bus to head out in the bush or the job site.

So ... we end up with those outside urban centres, paying for the tax break people in larger centres are receiving.

I for one agree we should be seeing hospitals / schools looking at ways to reduce their energy usage -- so why not take the money pillaged from their budgets to implement a series of planfull building improvements?

Instead the money is pulled from budgets they have already received, returned to the government, and then government gives it back when the announce a "NEW" government project complete with photo op for the premier and associated cabinet ministers.

Last night I drove by the Provincial Law Courts in Kamloops just after 9pm. The building was closed -- but 50% of the lights were on scattered throughout various parts of the building. It seems to me the government itself should perhaps look into seeing "the opportunities to reduce energy use"

In my honest opinion this program was poorly thought out, poorly implemented, and it definitely unfairly impacts the people of BC depending on where they live.

I believe the Carbon Tax allowed for a new source of tax revenue for the government, under the guide of a green initiative that is questionable at best.

Take care ... and thanks again for taking the time to express your thoughts.

Unknown said...

Excellent post, I am regular visitor of this blog, keep on writing these great posts, and I will be a regular visitor for a long time.
Waynebaxtrom

Unknown said...

Thanks Wayne ... appreciated