What’s your opinion about carbon taxes?

Ian Bruce
Climate-change specialist

“We’d love to have more green alternatives available, but one of the reasons we don’t is because we haven’t had the carbon tax to date. The carbon tax is one of the essential tools that actually make green technologies more affordable, and it gets them out into use. Had we had a carbon tax in place as long as countries in Europe have done, we’d likely be building the cars of the future instead of cars of the past.”

Maureen Bader
B.C. director, Canadian Taxpayers Federation

“The carbon tax is an attempt by politicians to utilize the environmental issue to bring support to them, but if they had taken a look at how the carbon tax has affected economies in Europe, they might have thought twice about bringing this. In the U.K., between 2000 and 2005, carbon-dioxide emissions went up four percent but manufacturing jobs dropped 20 percent. People respond effectively to pricing.”

Meena Wong
COPE city-council candidate

“I’ve always believed that if you want to draw people to do something that is good and constructive, you must first have an alternative in place that is convenient. You just can’t bring in the tax but not put in the infrastructure for improved public transportation. Carbon taxes benefit people with money and punish people who are under extreme financial burdens. It doesn’t matter to people who are driving Hummers. My understanding is that a cap-and-trade system works better.”

Jon Kesselman
SFU professor in public finance

“Generally, we respond as consumers if the price of a particular good goes up. We tend to buy less and conserve on that or find substitutes. Energy prices have risen so sharply in the market that it is doing a lot of the same thing. Relative to those [price] changes”¦the carbon tax in B.C. on fuel is relatively small. Even if it has fairly little effect on greenhouse-gas emissions”¦there is something to be said for it.”

Carbon taxes are old news in Europe. In Canada, provincial and federal politicians are wrangling about the cost of reducing greenhouse-gas emissions in order to abate global warming.

On July 1, Premier Gordon Campbell’s B.C. Liberal government is bringing in a tax of $10 per tonne on associated carbon (or carbon-equivalent) emissions; the tax will reach $30 in 2012. It’s a policy that the provincial NDP claims will burden ordinary consumers and allow big polluters off the hook.

Federal Liberal leader Stéphane Dion recently unveiled his “Green Shift” plan that features a carbon tax rising from $10 per tonne to $40 per tonne over a four-year period. This has drawn fire from both the federal Conservatives and NDP as a proposal that will only raise the cost of living for Canadians.

Then there’s the Green Party of B.C.’s long-standing suggestion of a flat $50 tax per tonne.

According to a briefing paper by the David Suzuki Foundation, European countries like Germany, Norway, Sweden, and the United Kingdom have put a price on their greenhouse-gas emissions in the form of carbon taxes. The paper also states that these countries have seen a decrease in their emissions as a result of such levies.

The NDP’s Shane Simpson, Vancouver-Hastings MLA and environment critic, pointed out that the difference between the Campbell and Dion carbon-tax plans is that the latter doesn’t tax fuel at the pumps.

“He’s [Dion] proposing a tax that’s more aimed at large polluters,” Simpson told the Straight. “That is where there is similarity [with the provincial NDP]. Our argument is that we need to be at source as well.”

According to the Dion plan, gas at the pump is “already taxed at 10 cents per litre, which is equivalent to $42 [tax] per tonne of greenhouse-gas emissions”. It likewise states that the 700 “worst polluters in Canada”, mostly heavy industry and power plants, will account for a big chunk of the more than $15 billion in revenues estimated to be generated.

Based on the revised rates released by the B.C. Ministry of Finance on June 18, the carbon tax on gasoline effective July 1 will be 2.34 cents per litre.

Simpson explained that the provincial carbon tax will have reduced emissions by only 2.8 percent by 2020. He argued that a cap-and-trade system instead would do the job of achieving the provincial target of a 33-percent reduction by 2020 by setting actual limits on emissions from big polluters.

Bill Rees, a UBC professor of community and regional planning, pointed out that North Americans are paying prices way too low compared with those in Europe, and that has led to wasteful consumption.

“Europeans use far less oil than we do,” Rees told the Straight. “All I’m saying is the tax replaces what the market wasn’t doing. We were paying much too little for oil and gasoline. We’re pissing it away on inefficient houses and inefficient vehicles.”

Rees, who originated the “ecological footprint” concept, also said that once market prices reflect the “true social cost of using oil, then the taxes become unnecessary”.

The carbon tax is only one tool to reduce emissions, and it has to be complemented by other measures, like energy-efficiency standards and investments in public transit, according to Marc Lee, senior economist with the B.C. office of the Canadian Centre for Policy Alternatives.

“The good thing about a carbon tax is it raises money, and you can channel some of that money back to low-income people,” Lee told the Straight. “The problem with just prices going up because the oil companies are increasing prices is that people are going to be hit by that, and no one’s taking back that money and recycling it back to consumers’ pockets.”

SFU professor Mark Jaccard, an expert on climate change, noted that without a carbon tax, prevailing high oil prices will lead not to
a decline in emissions but rather the opposite.

“And the reason is because then we start to make more and more oil or oil substitutes from things like coal, oil sands, oil shale, and these are all things that all lead to higher emissions,” Jaccard told the Straight. “So you have to have a carbon tax. You can’t escape it.”

Carbon tax by the numbers

> If implemented in 2006, a $50 per tonne carbon tax would have trimmed 0.090 percent from Canada’s economic output in 2010 but would have boosted the economy by 0.004 percent in 2020.

> A $50 per tonne tax is equivalent to 12 cents per litre of gasoline.

> If the same tax is applied when producing a barrel of oil from Alberta’s oil sands, that translates to $3 to $5 per barrel.

> Norway’s carbon tax ranges from $16 to $63 per tonne of greenhouse-gas emissions.

> Emission growth in Norway would be 15 percent to 20 percent higher had it not introduced the tax in 1990.

> Canada’s greenhouse-gas emissions are 25.3 percent above 1990 levels.

> B.C.’s emissions have risen by 30.2 percent since 1990.

Source: David Suzuki Foundation and Pembina Institute briefing papers