Wednesday, February 20, 2008

The ins and outs of the carbon tax

The Liberals' carbon tax took quick fire from a lot of different directions.
Within a few hours of the announcement, the Canadian Taxpayers' Federation, the B.C. Government Employees Union and the B.C. Green Party had all zipped off press releases complaining about the carbon-tax plan.
Which means it's at least an interesting idea. If right, left and enviros are united in skepticism, the tax has made an impact.
Of course, there was a lot of praise too, from a wide range of sources too.
I don't think you can argue against the principle. The government, reflecting the views of most British Columbians, has decided greenhouse-gas emissions must be reduced dramatically to slow global warming.
That means, fundamentally, burning fewer fossil fuels - gas and coal and oil.
There are other approaches. You can plant trees and can claim you're creating a carbon sink to offset some of the gas you burn in your drive to work. You could pay somebody else to reduce their emissions and count that as your contribution.
But really, meaningful action means emission reductions. That means changes in the way we live - car pooling or insulating our walls or at least walking to the store sometimes.
And while some people will start taking the bus just to help reduce their greenhouse-gas emissions, many more will park their cars if gas prices hit a painful point.
That's the principle behind the carbon tax. The government figured out how much greenhouse gas each fuel produced when burned. (Diesel is worse than gas in cars; oil is worse than natural gas for home heating.) Then it calculated a tax that was intended to work out to $10 per tonne of greenhouse gases produced this year, rising to $30 a tonne by 2012.
So the gas tax will start at 2.4 cents a litre this year and rise 1.2 cents a litre each year after. By 2012, it will be 7.2 cents a litre.
That's one problem with the plan. Gas prices are about 10 cents higher than they were a year ago - in Victoria they jumped six cents in hours this week - but not many people have changed their driving patterns.
And if people haven't considered it worthwhile to put in a more efficient gas furnace, it doesn't seem likely that a one-per-cent tax on natural gas - perhaps an extra dollar week in heating costs - will be move them.
But you've got to start somewhere.
The tax could influence business decisions. But that's a little worrying. Will an energy-dependent company install a more efficient power source or expand into Alberta or Idaho, where there is no carbon tax?
Or will not much of anything change? Les Leyne, the Times Colonist columnist, raised that point with Taylor in the press conference.
B.C. emits about 66 million tonnes of greenhouse gas a year. The government has passed a law saying that has to be cut by one-third by 2020. Without changes, the growth in our population and energy appetite would probably take emissions to more than 80 million tonnes by then.
In 2020, emissions will have to be cut by 22 million tonnes from today's level. But Leyne noted, the carbon tax is only projected to reduce emissions by three million tonnes.
At best, that's 14 per cent of the way to the goal.
There are lots of measures still to come. It sounds odd, but capturing the methane gas from dumps and burning it for heat or power makes a big difference.
The cap and trade system, while still to come, will theoretically encourage companies to reduce their emissions. If they come in under their cap, they can sell the credits to less-successful companies.
But not much will happen when the value of emissions is $10 per tonne. The province plans to charge itself $25 a tonne to cover its carbon emissions. The money will go into its Pacific Carbon Trust, which will use the money to reduce greenhouse gases. (The idea that Gordon Campbell can give the trust $4 to erase the emissions from a round-trip between Vancouver and Victoria is odd.)
Strange days and wild waters. But British Columbians wanted their government to do something about climate change. And it's taken the first steps into the unknown.


Gazetteer said...

"And while some people will start taking the bus just to help reduce their greenhouse-gas emissions, many more will park their cars if gas prices hit a painful point."

Or if taking the bus becomes the more efficient, reliable and cheaper option.

That's why, from a true difference engine POV, I still don't understand the revenue neutral aspect of the thing. Why not use the money to really do stuff that will make a difference?

Regardless, thanks for expanding on your views on the matter Paul - I guess if I were to really to follow Ms. Taylor's lead and slip on a pair of green shoes* like, apparently, the Suzuki Foundation has done, I could concede the point that 'at least it's a start'.

Just wish it had been a bigger, better and bolder one.

*walking shoes, not pumps mind you.

Anonymous said...

This is the government that is working to get more coal out of the ground, wants more oil drilling on and off shore. Wants a Natural Gas port in the straights which means shipping the stuff here then to ship the stuff to the US. They are spending little on transit improvements on Vancouver island. Electric power is clean but they are allowing BC Hydro to increase the cost as well. The ferry system keeps raising the rates so anything shipped of on on the island will be costing more. Gordo went green trolling for votes. I wonder what his vision will be next month?

Anonymous said...

It is a good, albeit modest start. And by starting first, Campbell gives BC more time for a more gradual adjustment that won't cause as much economic & social pain, which will benefit us all (unlike the dinosaurs in Ottawa and Washington, whose folly will hurt us all).

But I agree that it won't change behaviour, even when fully implemented - most of us arealready too far out in front of government for this to make a difference. Those who can make changes without too much pain by taking the bus, buying hybrids & insulating homes have already done so. Those who haven't need a lot more incentive. Some are holding out for those incentives (if my jalopy can hold out another couple years, why not wait for the price of hybrids to come down, plus a nice extra green rebate? Same for the drafty old house. An extra $50 a year isn't nearly enough to make that $50,000 car or reno look any more attractive)

This budget shows us the stick, but most people will need to see a big juicy carrot before they do very much to change deeply ingrained habits.