2017 Predictions

On our Year End Episode (Ep 14) Ian and I discussed what we were watching in the up coming year. Below is an expanded list of what I will be keeping an eye on and what I predict will happen.  Attached to each prediction is a confidence level, expressed in percentage terms. If my confidence is properly calibrated it should match the odds of the prediction coming true. In other words, if I make ten 60% prediction then 6 of them should happen. At the end of the 2017 I will score these to see how many I got right.

1. Star Wars Episode VIII will set a new box office record. 90%
2. Moonlight will win Best Picture 60%
3. Rouge One will win a Technical Oscar 55%
4. Jon Snow, Daenerys and Cersei Lannister will be alive at the end of the upcoming Game of Thrones season 55%
5. 2016 sucked jokes will stop being funny after Jan 20th 95%
6. At least one Trump cabinet pick will not be confirmed 70%
6. A) Contingent on #6 the reason will be close ties to Russia 80%
7. Trump’s pick to replace Justice Scalia will be confirmed 90%
8. There will not be a second SCOTUS vacancy 80%
9. Trump will have a major (defined as dominating the media for a period greater than 7 days or a drop of 5 percentage points in approval rating) scandal within 3 months of taking office 80%
10. Trump will have a scandal involving his business interests and the emoluments clause within 6 months 90%
11. There will be one serious call by the democrats for impeachment within 6 months 60%
11. A) Contingent on #11 House Republicans will vote down such measures 80%
12. Democrats will succumb to infighting rather than present a united front against Trump 60%
13. A secession movement in the pacific states will not reach or surpass 10% popular support 90%
14. There will be a major diplomatic incident in the first 3 months of the Trump administration 50%
15. There will be a major diplomatic incident in the first 6 months of the Trump administration 65%
16. There will be a major diplomatic incident in the first year of the Trump administration 80%
17. Relations between Trump and House/Senate Republicans will sour 60%
18. Relations between Trump and House/Senate Republicans will not sour to the point where the GOP congressmen vote to impeach 85%
19. Trump will not develop a serious health problem 80%
20. Mike Pence will not become the 46th President 90%
21. Trump will attempt to renegotiate NAFTA 80%
22. The US-Canada trade relationship will not significantly change 60%
23. Trudeau’s popularity will drop below that of 19 Oct 2015 70%
24. No legislation to enact electoral reform or initiate a referendum on the matter will be passed by parliament 70%
25. There will be changes to Canadian federal political finance laws 70%
26. The 2017 Federal budget will have a larger deficit than the 2016 budget projected 55%
27. Kinder Morgan gets stalled in court and no significant construction takes place 80%
28. There will be a federal cabinet shuffle 80%
28. A) Contingent on #28 Maryam Monsef will be removed from cabinet 90%
29. Nathan Cullen will become the NDP Leader 55%
30. NDP does not adopt the LEAP Manifesto 55%
31. CPC Leadership is too uncertain but rough odds are: Andrew Scheer 40%, Maxime Bernier 30%, Michael Chong 30%
32. Kevin O’Leary does not enter the CPC leadership race 60%
33. Christy Clark will win reelection 60%
34. The BC Green Party will increase its seat count 60%
35. Kathleen Wynne does not resign 60%
36. Britain does not invoke Article 50 60%
37. Angela Merkel remains Chancellor of Germany 70%
38. No other EU country will announce plans to leave 70%
39. Far Right/Alt Right does better than expected in at least on European election 60%
40. China does not have political turmoil on par with or surpassing Tiananmen Square 90%
41. North Korea’s regime will remain in place. 90%
42. Assad remains President of Syria 95%
43. ISIS remains a functioning organization 85%
44. ISIS losses territory 80%
45. There will be no terror attack with >100 casualties in the USA 95%
46. There will be no terror attack with >100 casualties in Canada 95%
47. There will be no terror attack with >100 casualties in EU 80%
48. No major intifada in Israel this year ( >250 Israeli deaths) 80%
49. No major Israeli military operation against its neighbors (>500 casualties) 80%
50. US will not get involved in any new major war with death toll of > 100 US soldiers 55%
51. No major war (>100 military casualties) in Asia 90%
52. Canadian Forces does not deploy a battle group size force to a new theatre 55%
53. Canadian Forces deploys a force smaller than a battle group to a new theatre 60%
54. There will be a cyber-attack attributed (but not confirmed) to a state actor on a NATO country 70%
55. Global extreme poverty will decrease 90%
56. Average global life expectancy will increase 90%
57. Vancouver Housing prices will drop 60%
58. House Prices will not drop >20% 70%
59. Broadway subway to UBC will receive funding 55%
60. Vancouver implements congestion pricing 55%
61. There will be no major changes to Vancouver land use policy 90%
62. Massey Tunnel replacement will face at least one delay 65%
63. Queen Elizabeth will pass away 55%
64. A Republican movement does not gain traction in Canada 90%
65. The Alt Right does not gain a foothold in Canada, defined as an affiliated party gaining a seat or a candidate winning a leadership race in an established party at any level 90%
66. S&P 500 will close lower at the end of 2017 than 2016 (2,238.83) 55%
67. Oil will closer higher at the end of 2017 than 2016 (WTI Crude $53.72) 70%
68. US Federal Reserve will raise interest rates 70%
69. Bank of Canada will raise interest rate 60%
70. Canadian GDP will grow less than 2.1% 55%
71. Canada’s per capita carbon emissions will fall 80%
72. America’s per capita carbon emissions will fall 60%
73. Alberta’s per capita carbon emissions will fall 60%
74. Tesla will announce a delay for the model 3 60%
75. SpaceX will successfully relaunch a previously used rocket 70%
76. SpaceX will launch, recover and re-launch a rocket within two weeks 50%
77. The US announces a major new manned space initiative 50%
78. Controversy over the EM drive is resolved 50%
79. The US will install more renewable electricity generating capacity than non-renewable 80%
80. Canada has at least one record setting extreme weather event 80%
81. BC has at least one record setting extreme weather event 50%
82. A weather related natural disaster in Canada causes at least $1B in damage 50%
83. The Cascadia subduction zone does not have an Earthquake of 9.0 or greater 98%
84. Canucks win the Stanley Cup. A wildly optimistic 90%

Feel free to post yours in the comments.

Michael Chong’s Campaign Stop in Vancouver


CPC Leadership Candidate Michael Chong

This past Friday I attended a meet and greet for Conservative Party leadership candidate Michael Chong, hosted by the Vancouver-Centre EDA.

As listeners to the podcast know Michael Chong has piqued my interest by breaking with some of the more orthodox big “C” Conservative positions on climate change, carbon pricing and advocacy for major democratic reforms in how Parliament functions.

I recorded the speech and following Q&A segment. Apologies  for the poor sound quality. The event was held in a loud bar with bad acoustics and I recorded on my phone.

I asked Michael Chong the question I had brought up in episode 6 on the short term fiscal impact of his carbon tax plan. His plan calls for $18 billion in tax cuts to offset the new carbon tax. The tax cuts take effect in 2020 but the carbon tax gets phased in over 10 years. I wanted to know how he reconciled that with his pledge to keep a balanced budget. Unfortunately the audio is unusable from when I spoke with him after the Q&A had finished. He answered that yes there would be some short term fiscal stress but it was both manageable and there would be a stimulus effect from such a massive tax cut. Their internal models show up to $7 billion in additional federal revenue from such a stimulus but this was left out of the policy paper in order to be conservative about the fiscal situation.

Please give these a listen, there were a lot of interesting questions asked from his stance on LGBTQ issues, to ISIS to free movement between Australia, New Zealand and Canada.

Don’t (Carbon) Tax Me Bro!

In the six days since Episode 2 of PolitiCoast: Green Shift 2.0 Shift Harder was released the feedback we received on Facebook can at best be described as “mixed”.  It turns out Carbon Taxes are controversial. Who would have thought?

The responses can be broken down into four general but over lapping categories.  First climate change doesn’t exist. Second carbon taxes do not work. Third carbon pricing raises the cost of living and hurts families. Finally there is a moral responsibility for corporations not people to pay for the damage of climate change. I am not going to devote much space to the first point because if decades of scientific research and an overwhelming consensus among scientists isn’t enough to convince you of reality of climate change some guy with a politics blog certainly isn’t going to.  The remainder of the responses are worth examining.

The claim that carbon taxes are ineffective was a common critique. If true it would certainly be a solid reason to oppose Trudeau’s plan. However this claim does not stand up to scrutiny on either theoretical or empirical grounds. The economic theory underpinning carbon taxes is pretty simple. It is based on two premises; prices convey information and people respond to incentives. Currently in jurisdictions without carbon prices there is no effective way to convey to people making economic decisions the costs, in terms of environmental damage, of their carbon emissions. A carbon price conveys that information by placing an approximated dollar amount on the damage a tonne of carbon causes to the environment. With that knowledge being transmitted to people via prices they can then assess if the benefits they gain from emitting that carbon are worth the damage inflicted. Perhaps most importantly that evaluation of the tradeoffs cannot be avoided. Because people generally respond to incentives and tend to opt for the lower priced goods or services, people will generally opt for lower carbon emitting options due to the lower relative price. The least marginally beneficial uses of carbon will decrease as the economic calculus no longer makes sense. This will result in reduced carbon emissions. There are well established market mechanisms by which carbon taxes work. Mechanisms, which those on the right ought to accept but often don’t. But that is a topic for a follow up post.

As for the empirical question, it was frequently claimed in our comments section that British Columbia’s carbon emissions had increased since the carbon tax was introduced in 2008.  The data published by the Government of British Columbia shows a decreases of total emissions from 66.8MT to 64.5MT as well as per capita and per dollar of GDP.  Unlike other provinces which have seen a decrease from phasing out coal electricity the composition of the BC electrical grid (predominantly hydroelectric) has remained largely unchanged.

Another frequently raised concern was carbon taxes would raise the cost of living. And that this would be especially hard on the poor and to a lesser extent the middle class. This has been the federal Conservative’s favourite line of attack. While these are reasonable concerns they are neither unaddressable nor sufficiently serious to out weigh the benefits of carbon pricing. The increase cost of many everyday goods and services can be addressed by following the BC model of a revenue neutral carbon tax. Under the BC model the revenue generated by the carbon tax is used to cut other taxes. The net tax burden remains the same however the tax burden is concentrated on those areas of the economy with the highest carbon output. For a family with a low carbon foot print they can come out ahead because their income taxes have been reduced. And for the poor, who have little disposable income and are hardest hit by increases in the cost of living a rebate can be issued to offset the new costs. Perhaps most importantly this increase may be temporary as businesses are incentivized to develop less carbon intensive (and therefore cheaper) ways to provide goods and services. In a competitive market those savings are passed onto the consumer.

The final point raised was that morally the burden of paying for the cost of climate change should fall on corporations, who have profited from carbon emissions rather than on people. However this misses a couple of key points. These business only exist because there is demand from the average citizen for their goods. If people didn’t want oil and products for which oil is a feedstock there would be no Exxon, no Suncor and no BP.  There would be no money to be made because no one would buy their product. Ultimately the huge corporate structure that exists is there to meet the demands people have for goods and services. It is meeting those demands which have resulted in the environmental damage we are trying to address. People should bare the costs associated with their consumption behavior. Without having to bare those costs people will lack the incentive to adjust their consumption.

Furthermore there is the implicit assumption in this argument that an economic agent (in this case a corporation) merely will bare a cost imposed on it without changing behavior or passing that cost onto other parties. Focusing solely on corporations will merely result in them passing the increased cost of doing business onto their customers. It is the same as a tax on consumers, just one that is better hidden.

Carbon taxes are undoubtedly going to be a controversial topic in the coming months and years. It is important for such a critical issue as dealing with climate change that the best arguments are presented and there is no misunderstanding about the benefits and costs of carbon pricing.