Wednesday, April 15, 2009

US black liquor gives Canadians headaches

A change in the US tax code subsidizing black liquor is threatening to open up discord between the US and Canada. And the industry that's doing the squealing is not Canadian whiskey, but Canadian pulp.


Blogger DeanO said...

Instead of subsidising biofuels I think a carbon tax is a much better solution. Unfortunately a global carbon tax would be very hard to implement. In the mean time, perhaps a revenue-neutral tax would be the best solution (although I do not believe that big government is the most efficient allocator of tax revenue)

From what I have seen, government subsidies do not encourage the best alternative solution, especially when it comes to biofuels. A carbon tax is a much better incentive for alternative fuel development because it allows for market forces to produce the most efficient outcome.

I know I have weak "economic language" (I am a mechanical engineer but very interested in economics) but the essential philosophy behind my claim is that free market systems will produce the best results, not government.

Penny for your thoughts, J.B.?

8:38 AM  

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