The provincial government’s new levy on fossil fuels is even lower than one proposed by the Canadian Association of Petroleum Producers.
A Vancouver climate-change activist is pleased the provincial government has introduced a carbon tax but argues that the levy is too low to make much of a difference.
Kevin Washbrook, director of Voters Taking Action on Climate Change, told the Georgia Straight that Finance Minister Carole Taylor’s budget announcement on February 19 of a revenue-neutral tax to be levied on virtually all fossil fuels—including gasoline, diesel, natural gas, coal, propane, and home-heating fuel—is “good news”.
“The only downside, I would say, is that it is set too low to really have an impact,” Washbrook said. “I think what a lot of economists would say is you need a carbon tax of $30 a tonne, now, to start having an impact on behaviour.”
The province’s carbon tax is set at a base rate of $10 per tonne of associated carbon (or carbon-equivalent) emissions. It comes into effect July 1, subject to approval in the legislature. The tax is scheduled to reach $30 per tonne by 2012.
“That is four years from now, and that is when most economists say it really begins to kick in to have a noticeable effect on people’s behaviour,” Washbrook said. “That [$30] was not a number that was pulled out of the sky. It is based on conversations we [VTACC] had with economists like Mark Jaccard. No, obviously the government is setting a bar they hope people can jump over.”
The rate should satisfy the Calgary-based Canadian Association of Petroleum Producers. In an interview with the Straight last December, CAPP senior climate-change-policy adviser Rich Hyndman noted: “The carbon tax, levy, or whatever you want to call it, is the better way to go.”
In materials for an April 2007 presentation to CIBC World Markets, Hyndman argued that a tax of $15 per tonne of carbon dioxide—50 percent higher than the one Taylor has unveiled—would provide clear direction and give emitters time to adjust.
“Start with something that you can manage as a first step,” he said by phone. “Then ratchet it up when you understand the consequences and have dealt with all the details.”
Taylor echoed these sentiments in her budget speech.
“The carbon tax will start as a relatively low rate to give us all—businesses and individuals—time to adjust,” Taylor said. “As it rises, it will underline the fact that there is, indeed, a cost attached to generating greenhouse gases.”
According to Washbrook, the new carbon tax will not assist Premier Gordon Campbell’s stated policy of a 33-percent reduction in greenhouse-gas emission by 2020.
“We are going to be only eight years away from that target [when the carbon tax reaches $30 per tonne],” he said. “I’d prefer to see it start higher and ramp up more quickly.”
Bill Rees, originator of the ecological-footprint concept and professor of community and regional planning at UBC, was headed to Lethbridge for the 45th annual Alberta Soil Science Workshop when he spoke to the Straight prior to the budget announcement. He had a number of preliminary concerns.
“They will try to make it revenue-neutral, but you wind up with that not having any effect on people’s pocketbooks,” Rees said. “So if I have to spend a little bit more over here because I save a little bit over here—because they give a little back in the form of lower income tax—then you may well neutralize the effect of the carbon tax, in that people go and spend the money on something else that may not be fossil fuel. But look, the problem here is that we have turned climate change into a fetish. It is not the only problem, right? Shifting expenditures around may not necessarily solve the problem.”
Rees emphasized repeatedly the fact that fossil-fuel-based consumption must radically decrease to avert climate-change-induced disasters.
“We should generally be oriented toward shrinking our ecological footprint in Canada by 80 percent,” he said. “So 80 percent is the reduction in consumption, particularly of fossil energy and many materials related to it. That is the rule for the rich countries and it is also what the [UN’s] IPCC [Intergovernmental Panel on Climate Change] says. So if this [tax] does not have the effect of very significant reductions in consumption, it won’t have done its job.”
To offset the cost of the tax, lower-income British Columbians will receive an annual credit of $100 per adult and $30 per child, to be paid quarterly with the GST credit.